Building Credit: How to Build Credit from Scratch

Credit can feel confusing if no one ever explained it to you. But at its core, credit is simply your reputation with borrowed money. Lenders, landlords, and even some employers use it to decide how trustworthy you are.

A higher credit score = more opportunities, lower interest rates, and fewer financial roadblock. The good news? You can start building (or rebuilding) credit safely, even if you’re brand new to it.

Choose a Starter Credit Tool

You need a way to show you can borrow and repay responsibly. Here are beginner-friendly options:

• Secured Credit Card

  You put down a cash deposit (usually $200-$500), and that becomes your spending limit. Use it for one small recurring bill (like Netflix) and set up auto-pay from you bank account.

• Credit-Builder Loan

  Offered by some banks or credit unions, these “loans” hold a small amount of money in a savings account while you make monthly payments. At the end, you get the money back – and a positive credit history.

• Authorized User

  If a trusted person (parent, sibling, partner) close to you has a card in good standing, ask to be added as an authorized user. Their positive history can help boost your score.

Warning: If they miss payments or carry high balances, it can hurt your credit too.

If you are curious about applying for a secured card or interested in exploring credit building loan options, reach out to Emily to discuss the best options for you and she can help you get started.

Use Credit Wisely

Once you have your tool, the key is consistency:

• Always pay on time. Even a few days late can drop your score.

• Keep your usage low. Use less than 30% of your limit (ideally under 10%)

• Stick with one starter account. Don’t apply for lots of cards too fast.

Step 3: Track Your Progress

You don’t have to guess where you stand.

• Check your score regularly with Equity Bank’s credit monitoring tool.

• Review your full report annually at AnnualCreditReport.com.

• If you spot errors, dispute them right away.

Step 4: Avoid Common Traps

Credit cards aren’t free money. Protect yourself by avoiding:

• Maxing out your card “just once”

• Only paying the minimum

• Opening store cards you don’t need for discounts

• Closing your oldest account too soon

How Long Does It Take?

If you’re starting from zero:

• With consistent use, you could reach a 650–700 score in 6–12 months.

• Over time, 750+ is completely possible.

If you’re rebuilding:

• Focus on paying off old debt while using your new tool responsibly.

• Scores can bounce back faster than you think when you create new positive history.

Once you’re building, check out Credit Scores Explained to see how your actions directly impact your score.

Step 1: Pick a Credit-Building Tool

Here are three beginner-friendly ways to get started:

1. Secured credit card

• You “secure” the card with a cash deposit (usually $200–$500). That becomes your credit limit.

• Use it lightly each month (like a subscription or phone bill)

• Pay it off in full every month.

• After 6–12 months, you may be eligible for a regular card.

Best for: true beginners or anyone rebuilding their score.

2. Credit-builder loan

• You “borrow” a small amount (like $300–$1,000), but the lender holds the money in a savings account

• You make monthly payments over 6–12 months

• When you finish, you get the money back (plus a bit of interest) and a credit history to show for it

Best for: people who want to build credit and save at the same time

Authorized user on someone’s card

• A trusted parent, sibling, or partner with good credit can add you to their card.

• Their on-time payments help boost your score, even if you don’t use the card.

Warning: If they miss payments or carry high balances, it can hurt your credit too.

If you are curious about applying for a secured card or interested in exploring credit building loan options, reach out to Emily to discuss the best options for you and she can help you get started.

2. Use credit wisely

This is where most people slip up. Once you’re set up with a credit card or loan, here’s exactly how to use it the right way:

Pay on time. Every single time.

• Your payment history makes up 35% of your credit score. Even being a few days late can hurt your score. Set up auto-pay for the minimum, and pay extra when you can.

Keep your usage low

• Use 10–30% of your credit limit at most. (If your limit is $300, don’t spend more than $90)

Don’t rush into more credit

• Stick with one account until you are confident in managing it.

3. Track Your Score

You don’t need to check daily, but once a month is smart.

• Use Equity Bank’s credit monitoring tool within online banking to track your score, set goals, and see what’s helping or hurting.

• Check your full report once a year at annualcreditreport.com

• If there are errors, dispute them right away.

4. Avoid the Traps

Let’s be real, credit card companies love people who overspend and carry a balance. That’s how they make money. Don’t fall for it.

Avoid:

• Getting multiple credit cards too fast

• Maxing out your card (even “just once”)

• Paying only the minimum long-term

• Opening store cards just for a discounts

Closing your first credit card too soon (length of history matters)

Do:

• Use 1 starter card responsibly

• Treat it like a debit card: don’t spend money you don’t have

• Think long-term: credit is about financial freedom, not just points

How Fast Can You See Results?

Starting from scratch: You could hit a score of 650–700 within 6–12 months of on-time use. With time, and smart habits, 750+ is possible.

Rebuilding after setbacks: Scores can bounce back with consistent effort. The key is paying on time and using credit carefully.

The Takeaway

Credit is like a plant; it grows slowly with steady care. Start small, set it up, and stay consistent. This isn’t about becoming a credit expert. Its about having a system that works in real life. If you’re unsure where to start, know that help is available to talk through each step with you.