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Guide to Building Credit With No Credit History

By Jennifer Calonia · February 07, 2023 · 7 minute read

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Guide to Building Credit With No Credit History

Credit is often regarded as a catch-22: You have to have credit to access credit products, particularly borrowing opportunities that are more competitive. For example, a positive credit history can help you access consumer loans at a lower interest rate, or qualify for a credit card with a lucrative rewards program. But without an existing credit history, it might be hard to get approved for these opportunities.

However, everyone starts with zero credit history. Building a credit profile doesn’t happen overnight, but learning how to build credit when you have none can help you get there.

Recommended: Apply for a Rewards Credit Card

What Is Established Credit?

Establishing credit means that you have a history of past and currently active credit accounts with which you borrowed money from an entity or financial institution to purchase goods or services.

Lenders and creditors review your established credit to decide whether to extend you new credit. It’s also evaluated by employers, utility companies, and landlords to help them decide whether to accept your application or offer you service.

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Apply and get approved for the SoFi Credit Card. Then open a bank account with qualifying direct deposits. Some things are just better together.

5 Tips to Build Credit With No Credit History

It is possible to build credit even with no credit history. If you have no credit, build credit using one or more of the following strategies.

1. Become an Authorized User

One way to build credit with no credit is to ask a family member or friend who has good credit to add you as an authorized user on their credit card account. Some lenders report card activity to the credit bureaus for both the primary cardholder and any authorized users on the card, so the primary cardholder’s good credit behavior could reflect positively on your credit.

As an authorized user, you aren’t liable to repay the debt on the card. However, the reported data still will reflect on your credit history.

2. Get a Secured Credit Card

Getting a credit card for the first time can be challenging if you immediately apply for an unsecured card that isn’t tied to collateral. A secured card can be easier to obtain when building credit from no credit — just make sure the card issuer reports the account’s activity to the credit bureaus.

Secured cards typically require you to make a small initial deposit into a separate bank fund. The card issuer then gives you a credit card usually with a credit limit that matches your deposit amount. As you use the card and make prompt payments, you can build credit. Once you achieve at least a fair credit score, you may be able to get upgraded to an unsecured credit card.

Recommended: Apply for an Unlimited Cash Back Credit Card

3. Report Your Rent and Utility Payments to Credit Bureaus

To boost your progress in building credit with no credit, you can self-report your on-time rent payments, cell phone payments, and everyday utility bills.

Third-party services, like Piñata and Rental Kharma, give you momentum to develop your credit history using your rental payment track record. Similarly, the credit bureau Experian empowers consumers to establish their credit profile by reporting phone and utility bill payments via Experian Boost.

4. Apply for a Retail Card

Credit cards that you can only use at a specific merchant, like a gas card or department store card, are typically easier for consumers with no credit history to get approved for. Plus, retail cards’ lower credit limit and restricted use makes them a good option if you’re looking to build credit.

Recommended: When Are Credit Card Payments Due?

5. Take Out a Credit-Builder Loan

A credit-builder loan is an installment loan that’s typically for a small amount, like a few hundred dollars. The lender puts this amount into a separate savings account on your behalf, and you’ll make payments to repay that loan.

During this process, the lender will report your account activity to the credit bureaus. And once the loan’s term ends, you’ll get the money that accumulated from your regular payments.

How Long Does It Take to Build Credit for a Beginner?

Establishing your credit can take anywhere from three to six months, and it typically takes at least six months to develop a credit score. Once your credit account is active and there’s borrowing and repayment activity on the account, your lender or card issuer will report the new account and its activity to the credit bureaus.

What Credit Score Should You Start With?

A starting credit score doesn’t start at zero. The baseline, or lowest FICO score you can have, is actually 300. If you are building credit from no credit, however, you simply wouldn’t have a credit profile to your name, meaning you’d have no credit score as opposed to a low credit score.

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Tips for Using a Credit Score to Your Advantage Once You Have It

Once you’ve gone through the necessary motions to build credit, here’s how you can make the most of it:

•   Shop around before opening new credit accounts. Lenders and credit card issuers are competing for your business. Compare product features, interest rates, fees, and terms before moving forward with a new loan or credit card to ensure you get the most competitive option available to you.

•   Apply for credit cards with better rewards. Once you’ve established your credit and are confident that you can borrow responsibly, consider applying for a credit card that offers a rewards program. For example, look into cards that offer cash back, points, or miles — like the cash-back rewards card from SoFi — so you get a little something back from purchases you’d already make.

•   Maintain responsible borrowing habits. After you’ve put in so much work to build your credit score, you don’t want to wreck it. So follow responsible borrowing habits, like not borrowing more than you can afford to pay back based on your monthly expenses and income.

•   Be aware of the factors affecting credit scores. Understand how paying off debt affects your credit score, as well as how your credit utilization, credit age, credit mix, and new accounts influence your score. By knowing what makes up your credit score, you’ll better know how to continue building it.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

There are many ways to build your credit when you have no credit history. However, all of the strategies above take a few months to get your credit record established. Once you have a credit score going, you can access other credit products, like rewards credit cards.

If you’re ready for this next step, the SoFi Credit Card lets you earn cash-back rewards on all eligible purchases. You can then use those rewards to invest, save, or pay down eligible SoFi debt. Plus, SoFi will reward you for good credit behavior by lowering your APR after you make 12 on-time monthly payments of at least the minimum amount due.

For a limited time, new credit card holders† who also sign up for a SoFi Checking and Savings with direct deposit can start earning 3% cash back rewards on all eligible credit card purchases for 365 days*. Offer ends 12/31/23.

Take advantage of this offer by applying for a SoFi credit card today.


How fast can you build credit with no credit?

Generally, if you’re starting with no credit, it can take anywhere from three to six months to build your credit. The exact timeline depends on the credit scoring model that’s used and your lender’s timeframe for reporting new accounts to the credit bureaus.

What is the easiest way to establish a credit history?

The easiest way to establish a credit history is by asking to become an authorized user on a family member or close friend’s credit card account. This approach bypasses having to personally submit your own credit card application. Instead, you’ll piggyback on the primary account holder’s positive borrowing and repayment practices to build your credit record.

What is my credit score if I have no credit?

If your credit profile is nonexistent — meaning you’ve never opened a credit-based account under your name — you won’t have a credit score at all. Having a credit score of 0 is actually a myth; instead of a number, you’re simply considered credit invisible.

How long does it take to build credit from 0 to 700?

The time it takes for consumers who are new to establishing their credit to reach a credit score of 700 varies. However, generally, if you have no credit you could potentially reach a 700 credit score after six months of a reported payment history.

Photo credit: iStock/fizkes

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
1See Rewards Details at SoFi.com/card/rewards.
SoFi cardholders earn 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back rewards when redeemed for a statement credit.1
Members earn 2 rewards points for every dollar spent on eligible purchases. If you elect to redeem points for cash deposited into your SoFi Checking or Savings account, SoFi Money® account, fractional shares or cryptocurrency in your SoFi Active Invest account, or as a payment to your SoFi Personal, Private Student, or Student Loan Refinance, your points will redeem at a rate of 1 cent per every point. If you elect to redeem points as a statement credit to your SoFi Credit Card account, your points will redeem at a rate of 0.5 cents per every point. For more details please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s

†SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS PROSPECTIVELY BASED ON MARKET CONDITIONS AND BORROWER ELIGIBILITY. Your eligibility for a SoFi Credit Card Account or a subsequently offered product or service is subject to the final determination by The Bank of Missouri (“TBOM”) (“Issuer”), as issuer, pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. Please allow up to 30 days from the date of submission to process your application. The card offer referenced in this communication is only available to individuals who are at least 18 years of age (or of legal age in your state of residence), and who reside in the United States.

*You will need to maintain a qualifying Direct Deposit every month with SoFi Checking and Savings in order to continue to receive this promotional cash back rate. Qualifying Direct Deposits are defined as deposits from enrolled member’s employer, payroll, or benefits provider via ACH deposit. Deposits that are not from an employer (such as check deposits; P2P transfers such as from PayPal or Venmo, etc.; merchant transactions such as from PayPal, Stripe, Square, etc.; and bank ACH transfers not from employers) do not qualify for this promotion. A maximum of 36,000 rewards points can be earned from this limited-time offer. After the promotional period ends or once you have earned the maximum points offered by this promotion, your cash back earning rate will revert back to 2%. 36,000 rewards points are worth $360 when redeemed into SoFi Checking and Savings, SoFi Money, SoFi Invest, Crypto, SoFi Personal Loan, SoFi Private Student Loan or Student Loan Refinance and are worth $180 when redeemed as a SoFi Credit Card statement credit.

Promotion Period: The Program will be available from 10/1/22 12:01 AM ET to 12/31/23 11:59PM ET

Eligible Participants: All new members who apply and get approved for the SoFi Credit Card, open a SoFi Checking and Savings account, and set up Direct Deposit transactions (“Direct Deposit”) into their SoFi Checking and Savings account during the promotion period are eligible. All existing SoFi Credit Card members who set up Direct Deposit into a SoFi Checking & Savings account during the promotion period are eligible. All existing SoFi members who have already enrolled in Direct Deposit into a SoFi Checking & Savings account prior to the promotion period, and who apply and get approved for a SoFi Credit Card during the promotion period are eligible. Existing SoFi members who already have the SoFi Credit Card and previously set up Direct Deposit through SoFi Money or SoFi Checking & Savings are not eligible for this promotion.


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