Skip to content

How to Build Your Credit Score in 6 Easy Steps

Business woman holding a credit card.

When you don’t have a credit score, life can be pretty challenging. We live in a world that works largely on credit. If you don’t have a positive credit history, you’re going to struggle to achieve financial independence. But how can you build up your credit score when you don’t have much of a credit history? In this article, we reveal how to build your credit score in 6 easy steps.

What Is a Good Credit Score?

A credit score is a numerical representation indicating a person’s creditworthiness. Different countries use a range of methodologies to calculate a person’s credit score. In the United States, the most popularly used method is the FICO score. It was developed by and is named after Fair, Isaac and Company, who are in the business of data analytics.

Man checking his credit score online using a mobile phone planning on how to build your credit.
Visit A Free Credit-Scoring Website To Monitor Your Credit Score (Image Source: Shutterstock)

The FICO score runs between 300 and 850. A score of 700 or over is considered to be good. A score over 800 is regarded as excellent. In 2020, the average FICO score in the United States was 710. 

You can and should regularly monitor your credit score. You can do this by visiting a free credit-scoring website. One of the most reliable and popular is Experian Boost

If you are wondering how to build your credit, try following our 6 steps below:

Credit Builder Loan

A credit builder loan is a loan that is designed to help you build your credit limit and achieve financial stability. You do not have to have a good credit score to apply for a credit builder loan. However, you do have to show that you have sufficient income to meet the repayments. These types of loans are usually offered by credit unions and community banks.

Business loan from a bank employee.
One You Paid A Loan, A Positive Report Will Be Sent To A Credit Bureau (Image Source: Shutterstock)

Typically, you do not actually get access to the loan amount. You make monthly repayments and are, in effect, building up your savings as you improve your credit rating. Once you have successfully repaid the loan, a positive report will be sent to a credit bureau.

Make sure to choose a credit loan amount that you can comfortably handle the repayments on. If you miss a payment, the whole plan will backfire. When your loan is paid off, make wise use of your savings. If you can, use it as an emergency fund to ensure that you never miss a monthly payment.

Credit Card

Getting a credit card can help you quickly build up some credit history. However, a credit card is a double-edged sword. If you max it out and don’t pay your minimum monthly amounts, you will be destroying, rather than building, your credit.

Man with credit card and phone in hands doing purchases during online shopping.
Use Your Card To Pay For Small Everyday Purchases And Be Sure To Pay Off Your Monthly (Image Source: Shutterstock)

If you have absolutely no credit history, you will need to apply for a secured credit card. This is where you will be required to pay a security deposit against the credit amount. If you fail to make your payments, the credit card company will take the amount from your deposit.

If you already have some credit history, you will be able to apply for a non-secured credit card. Use your card to pay for small everyday purchases and be sure to pay off your monthly balance on time. This will help to build your credit history. After you have built a history of paying your bill on time over a few months, apply for a credit limit increase. This will help you to build your credit utilization score, which is a factor contributing to your credit score.

Pay Your Bills On Time

The most important thing you need to do in order to get your credit score moving up is to pay your bills on time. If you are late on a payment, it can affect your credit score for as long as seven years. If circumstances just will not allow you to pay a bill before the due date, get in touch with the company immediately. Make arrangements to pay as soon as possible and request that they do not report the missed payment to credit bureaus.

Young woman holding credit card and using laptop making payment online.
If You Are Late On A Payment, It Can Affect Your Credit Score For As Long As Seven Years (Image Source: Shutterstock)

Request to Become an Authorized Credit Card User

You can leverage the good credit score of a friend or relative to help improve your credit card score. Simply ask that person if you can become an authorized user on their credit card. You do not have to be actually making any purchases on their credit card for your credit score to improve. In fact, the account holder doesn’t even have to let you know what the credit card number is! That is a safeguard for them and a big win for you!

Use a Retailer Program

A retailer program is where you borrow money directly through a retailer rather than from a bank. They fund the loan through a bank or finance company. You can build your credit score by taking up these offers and paying them on time. The best strategy is to pay off the loan as quickly as possible rather than just paying the minimum amount each month.

Woman smiling holding so many expenses bills such as electricity bill.
The Best Strategy Is To Pay Off The Loan As Quickly As Possible (Image Source: Shutterstock)

It is often easier to get a loan through a retailer than from a bank. Just make sure the retailer will report your successful payment history to a credit bureau.

Personal Loan

Once you have built up some credit history by way of a credit builder loan, a credit card, and a retailer program card, you are ready to take the next step and apply for a personal loan. This will be an unsecured loan. Making successful payments on an unsecured loan is one of the fastest ways to pump up your credit score. You will pay a higher rate of interest because the lender is taking on a bigger risk. However, paying it back on time will make that extra cost well worth it with the extra bump it will provide to your credit score.


Building your credit score won’t happen overnight, but it will happen. So long as you consistently apply the 6 steps that I’ve outlined in this article, you should be able to add about a hundred points to your score. That will make you a far more inviting credit prospect and remove any financial anxiety!