Your credit score is more than just a number—it’s a gateway to financial freedom. Whether you're applying for a loan, renting an apartment, or even job hunting, your credit score affects your opportunities. But if you’re just starting out or trying to rebuild, it can feel like a catch-22: you need credit to build credit. Fortunately, there are proven strategies that can help you build a solid credit history from scratch or improve a low score. This guide outlines the 10 best ways to build credit in the U.S., offering practical steps that are beginner-friendly, effective, and sustainable.

1. Open a Secured Credit Card

One of the easiest ways to start building credit is with a secured credit card. Unlike regular cards, secured cards require a refundable deposit—usually equal to your credit limit. They report to the major credit bureaus (Equifax, Experian, and TransUnion), helping you establish a credit history when used responsibly.

Benefits of Secured Credit Cards:

• Easier approval with no credit or bad credit
• Monthly reporting to credit bureaus
• Low risk of overspending due to low limits
• Many issuers upgrade to unsecured cards over time

2. Become an Authorized User

Another fast and effective way to build credit is by becoming an authorized user on someone else's credit card—preferably a family member or trusted friend with good credit habits. As an authorized user, their payment history will be added to your credit report, boosting your score over time.

Why This Strategy Works:

• Immediate access to a well-established credit line
• No liability for payments (unless agreed upon)
• Builds length of credit history and utilization ratio
• Safe option for beginners to piggyback on good credit

3. Apply for a Credit-Builder Loan

A credit-builder loan is designed specifically to help people build or repair credit. Instead of receiving a lump sum upfront, you make small monthly payments into a savings account. Once you finish, the money is released to you—along with a history of on-time payments reported to the credit bureaus.

Perks of Credit-Builder Loans:

• Low-risk way to build payment history
• Encourages disciplined savings habits
• Offered by credit unions and community banks
• Boosts your credit mix, which affects your score

4. Pay All Bills on Time, Every Time

Your payment history makes up 35% of your FICO credit score, making it the most crucial factor. Whether it’s credit cards, student loans, or utility bills, consistent on-time payments demonstrate financial responsibility and significantly improve your score over time.

Tips to Stay on Schedule:

• Set up automatic payments or reminders
• Use budgeting apps like Mint or YNAB
• Prioritize due dates for all credit accounts
• Contact lenders early if you're at risk of missing a payment

5. Keep Credit Utilization Below 30%

Credit utilization—the ratio of your credit card balance to your credit limit—is the second most important factor in your score. Experts recommend keeping your utilization below 30%, but under 10% is even better for optimizing your score.

How to Improve Utilization:

• Pay off balances before statement closing date
• Spread spending across multiple cards
• Request a credit limit increase (without spending more)
• Use secured cards or multiple accounts strategically

6. Monitor Your Credit Report Regularly

Mistakes on your credit report can drag down your score without your knowledge. Checking your report from all three major bureaus allows you to spot errors, fraud, or outdated information and take quick action.

Ways to Monitor Your Credit:

• Use AnnualCreditReport.com for free reports
• Set up alerts with tools like Credit Karma or Experian
• Dispute inaccuracies directly with bureaus
• Monitor identity theft or suspicious activity

7. Keep Old Accounts Open and Active

The length of your credit history accounts for 15% of your score. Keeping older accounts open—even if you don't use them often—can strengthen your credit profile. Closing accounts shortens your average account age and may increase your credit utilization.

Smart Account Management Tips:

• Keep no-fee accounts open for history
• Use each card occasionally to keep it active
• Set calendar reminders for activity
• Avoid closing accounts unless necessary

8. Diversify Your Credit Mix

Lenders like to see that you can handle different types of credit responsibly. A healthy mix might include a credit card, a car loan, and a student loan. If you only have one kind of credit, consider adding another form to diversify your credit profile.

Examples of Credit Mix Options:

• Credit cards (revolving credit)
• Installment loans (auto, student, personal loans)
• Retail or store cards
• Mortgage loans (for long-term strategy)

9. Use Rent and Utility Reporting Services

Rent and utility payments typically don't appear on your credit report—but some services can help you add them. These tools report consistent payments to the credit bureaus, building your history with bills you're already paying.

Popular Reporting Services:

• Experian Boost (for utilities, phone bills, and streaming)
• RentTrack, LevelCredit, or Esusu (for rent payments)
• PayYourRent or Rental Kharma

10. Limit Hard Inquiries and New Credit Applications

Every time you apply for credit, a hard inquiry is recorded on your report. Too many in a short period can lower your score and make lenders nervous. To protect your score, apply for new credit strategically and sparingly.

Best Practices for Inquiries:

• Only apply for credit when necessary
• Rate shop (mortgages, auto loans) within a 14-day window
• Prequalify using soft inquiries where possible
• Review your credit before applying to improve chances

Conclusion

Building credit in the U.S. is a journey—but with the right strategies, it’s absolutely achievable. From using secured credit cards and paying bills on time to leveraging credit-builder loans and tracking your report, these 10 best practices are designed to help you establish and maintain strong credit health. Whether you're just starting or repairing a damaged score, the key is consistency, education, and discipline.

Your credit score impacts nearly every major financial decision in life—don’t leave it to chance. Start building smart today, and unlock better interest rates, rental opportunities, and financial security for the future.