10 Easy Ways to Build Credit

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Having good credit is very important. The better your credit is, the less your interest rate will be for loans and credit cards. A few years ago, my credit was horrible. Thankfully, I got my act together, and now it’s in the 700’s. If you are young or if you are just now starting out, you might wonder how to build good credit.

It is not too difficult.

In today’s post, I will be giving you ten easy ways to build credit.

Open a Bank Account

If you are young or if you are trying to build credit, the first thing that I would do is to open a bank account. I would open a checking account and start off with $100. You should make sure that your account stays in good standing. Also, try not to get any overdrafts. An overdraft happens when money is withdrawn from your account, and the available balance goes below zero. When you’re building credit, overdrafts don’t look good at all. Your bank will also charge you a fee for those as well. Overdraft fees can be anywhere from $15 to $35. It sucks having to pay those fees.

Take Out a Small Loan

Taking out a small loan is another good tip. A good amount to borrow for the loan is $200 or less. You should pay the loan back in full monthly if possible. Repeat that process a few times. The more you do it, the better it looks to a future lender. A good place to apply for a loan is a credit union or a bank that you have a relationship with. They should be easier to work with.

Check your credit with Credit Sesame today!

Have Good Employment History

Having good employment history is vital. It shows people that you are reliable. Lenders probably will not give you a good interest rate if they see you jumping from job to job or if you have long bouts of unemployment. They are looking for stability. It also shows that you are responsible. If someone is leaving their job every year, the lender may question if you can handle a loan or a credit card.

Get a Credit Card

Getting a credit card is another way to help build credit. Only use this tip if you are mature enough. A lot of people mess their credit up by freely spending money that they really don’t have. My suggestion would be to get a card with a limit of no more than $300. Use it a couple of times for groceries or gas and pay it off in full, monthly. You don’t want to get in over your head with credit card debt. I recently paid mine off in March after carrying some for years. I don’t want you to be in a similar situation.

Don’t Accumulate Debts, Keep Revolving Credit Balances Low

The credit utilization ratio (CUR) is another important number in credit score calculations. These rates are based uniquely on revolving credit, which is basically, your credit cards and lines of credit.

The CUR is calculated by summing up all credit card balances at a particular given time and splitting up that amount by the total credit limit. For instance, if you routinely charge about $1,000 monthly and the total credit limit across all cards of yours is $5,000; your utilization ratio is 20%.

Lenders usually enjoy seeing low ratios of 30% or below. The lesser the CUR, the more lenders will believe you possibly have a knowledge of credit management and that you haven’t exhausted your credit cards. A good credit score = a low CUR.

Don’t Open Too Many Credit Accounts

While opening an account is important, don’t open too many accounts.

Request for and only open new credit accounts as a matter of necessity.

Don’t open accounts with the sole purpose of improving your credit score and having a better credit mix. The probability that you will achieve that is meager. It just might not work.

Needless credit card accounts can have an adverse effect on your credit score. It could give rise to severe scrutiny on your credit report. Negative cash flow and buildup of debts are also not far-fetched.

Monitor and Conflict Any Errors on Your Credit Reports

Be incompatible with any mistake on your credit reports, be it major or just a slip of the pen.

It’s advisable to monitor and check your credits frequently for defects or oversights. Doing this will help you spot any errors there might be before they do damage.

Confirm that the listed accounts on your reports are true. Disagree with errors and get them rectified right away.

Wrong details on credit reports could drag scores all the way down.

Become An Accredited User On Another Person’s Account

Here’s another tip. Become a user on another person’s account.

You can positively influence your credit utilization ratio and improve your credit score when you are a legitimate user on another person’s account. This will tell lenders that you are efficient in managing credits.

But this is only advisable when the account owners are responsible credit users themselves. Else you might end up sending the wrong message to lenders.

Don’t Apply For Excessive New Credit

Putting in applications for too much new credit could result in several inquiries on your credit report.

While opening a new credit card can help boost your credit limit on the whole, the act of putting in applications for credit warrants scrutiny on your credit report. Multiple hard queries and scrutiny can have an adverse effect on your credit score.

Hard queries can last for two years on your credit report.

Pay Your Bills on Time

The final tip is that you should pay your bills on time. Whether it’s a phone bill or your light bill, pay them on time. Lenders and creditors check this information.

When they access your credit report and request a credit score for you, they’re keenly interested in how efficiently you pay your bills. That is because future performance is often considered predictable by past payment performance.

Payment history makes up 35% of your credit score. You don’t want to get behind while you’re trying to build your credit.

In review, the ten easy and efficient ways to build credit are to,

  • Open a bank account,
  • Take out a small loan,
  • Have a good employment history,
  • Get a credit card,
  • Do not accumulate debts,
  • Don’t open too many credit accounts,
  • Monitor and conflict errors on your credit report,
  • Become an accredited user on another person’s account,
  • Don’t appeal for excessive new credit,
  • Pay your bills on time.

All these actions are very attainable. You just have to make it happen. Once you do, you will start building credit in no time.

When did you start building your credit? Did you use any of these easy ways to build credit?




  1. These are some great tips… one thing that I did to build my credit was to every now and then buy something on a card for around $100 and pay half off one month and the other half the next. I only did that a few times after a financial advisor said that it helps with revolving credit

  2. Getting a store credit card is a common strategy for building credit, especially if you have never had a credit card. I’d definitely recommend that as a first step.

    1. You’re right, that’s a good step as well.

  3. Oh wow, I needed this like no other. I am a recent college graduate (okay 2013) and the whole student loans, car payment issues really create some stress. Thanks for the advice!

    1. No problem. I hope things work out for you.

  4. My 19-year old daughter just got her first credit card and we reviewed all of your suggestions with her prior to reading this! I do not carry debt, except my mortgage and car payment, so I am trying my best to teach her the same habits. Good points, for sure.

  5. This is a great article. It is well thought out – with nothing but informed points. A good one to send to anyone who is looking to increase their credit score.

  6. These are great tips to help someone to build or rebuild there credit. Without a good credit history it can make it much more difficult to buy the big things we need such as a car or a new home. It’s good to eliminate or reduce consumer debt whenever and whether possible otherwise it become a burden that can be difficult to manage. 🙂

  7. These are excellent suggestions. I don’t think young people are aware as they should be about how important a good credit history is! Sometimes poor credit can be the very reason you are tuned down for a job! Many employers regard poor credit history as a sign of irresponsible/unreliable behavior that they’d rather not see in an employee.

    1. You’re right. I’ve known a few people who didn’t get the job because of their credit history.

  8. Hi Jason; a good start for people wanting to establish their credit. I didn’t realize that employment history effected your credit. Makes me wonder if medical history also comes into play. thanks for sharing the post, max

  9. Dana Buckmir says:

    My younger brother recently asked me how to build up his credit and he would definitely benefit from reading your advice. I will pass it along to him. He asked me if paying rent would effect his credit and I didn’t know if it did. Do you have any idea?

    1. Paying rent would benefit because you don’t want to have an eviction on your credit report.

  10. Something else to keep in mind when building credit is not to close down credit cards you no longer use. Just don’t use them. When you cancel them all that good credit goes away with them.

  11. Hi Jason – these are great tips. I think there should be a workshop in senior secondary school that addresses these issues. Students starting University here immediately receive a credit card from one of the major banks, which to often looks like easy money to them. Your information may help them avoid problems.

  12. I need to get a credit card like a gas card and then pay it off to show credit. My husband has great credit but I do not have any credit. However, I have always paid my rent on time when living on my own. These are good tips and goals to strive for. Thanks!

  13. What a great article to pass on to young people who are just embarking on their credit careers!

  14. Years ago, ahh so young and free, my husband was adamant about one thing: if we are going to have a credit card, we are going to pay the balance off monthly. Fortunately we’ve been able to live that way for years. Credit card companies are known to call people like us things like “freeloaders.” But we don’t care because we don’t incur interest charges and start clean every month.

    1. Y’all are doing the right way.

  15. Mina Joshi says:

    Really good advice. Very similar to what I tell my younger son. My older son had got carried away spending like there is no tomorrow with his first credit card and we had to help him out – he learnt the hard way. A good credit report is so important when you are just starting out as an adult.

  16. Funny that I was having a conversation with my daughter about building credit. She was telling me the school doesn’t teach all the stuff I was talking to her. Paying off the credit card debts in the right time to avoid paying interest is a big lesson.

  17. Great tips Jason and especially your underlying message with all of these: act responsibly and be mature about it. There is only one way to build credit and that is to use credit… but the reality is that too many people start out with good intentions and pay off their credit cards regularly in the beginning… then one day you find yourself with a HUGE bill and no means to take care of it. So I suggest treating credit cards like cash — don’t spend what you don’t have 🙂

  18. Great tips! I fell victim to the credit card awe when in college. Fortunately I got that card paid off and cut to bits! Fast forward to just a few years ago…my ex-husband and I had filed for bankruptcy. While it ended up being the best decision for us at the time, it made my credit report look like a mine field.

    After much research on the subject, I learned that using no more than 30% of your available credit was the optimum amount for helping credit scores. So, the first step in rebuilding my credit was getting a secured credit card. After 100% of on-time payments of the entire balance and a buy-out from another company, it became and unsecured card. I have since acquired another unsecured card with an even bigger credit line and a ‘store’ credit card.

    I also utilize Credit Karma diligently and have watched my tarnished record slowly begin to shine. It’ll take time I know…but it sure feels good to be on the right path!

    1. I use credit karma as well. They are very helpful.

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