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Mortgage Answers / Credit & Income
How Can I Build Credit If I Have Little or No Credit History?
A static educational action plan. Read the case that fits your question.
Start here
The Short Answer
Start with an affordable way to show reliable payments, not lots of new accounts. A secured card or credit-builder loan may help if it reports payment history and fits your budget. If you plan to apply for a mortgage soon, ask about your options before opening credit.
I am not applying for a mortgage soon
Compare one manageable credit-building option.
1. Check fees, deposit requirements and reporting before choosing.
2. Borrow only what you can repay and make payments on time.
3. Review the reports later to confirm the information is correct.
I want to apply for a mortgage soon
Ask about mortgage options for limited credit history first.
1. Tell the lender you have limited or no reported credit.
2. Ask what program and payment-history documentation may be considered.
3. Do not open an unnecessary account just to create a score.
I use only debit or prepaid cards
Spending your own money usually does not build a loan-payment record.
1. Understand that prepaid and secured credit cards work differently.
2. Compare costs and reporting before changing products.
3. Keep your spending plan affordable; a new account is not required for everyone.
Frequently Asked Questions
Must I carry card interest to build credit?
No. You do not need to carry an interest-bearing balance for that purpose.
Does a new account guarantee mortgage eligibility?
No. Mortgage options and required documentation vary.