How to start a credit history from scratch

Without a history, banks can't see how you pay, so the first products are built on a deposit, on someone else's history or on a small loan you repay to yourself. The goal of the first year is three or four accounts that report to the bureaus every month without a single late payment.

• Secured card. You put down a $200–500 deposit, and it becomes your limit. After 6–12 months of careful payments many banks return the deposit and convert the card to a regular one. Choose a card with no annual fee that reports to all three bureaus.
• Pledge loan (share secured loan). A loan at a credit union secured by your own deposit: you put, say, $500 into a savings account, the union lends you that $500 for 6–12 months, and you repay it on schedule. The payments are reported as an installment loan, the money stays yours and the union takes no risk, so almost everyone is approved. Navy Federal, PenFed and many local unions offer such loans at 2–4% a year.
• Credit builder loan. A similar scheme in reverse: the bank or service holds the loan amount in an account, you make the payments, and at the end of the term you receive the money. You get installment history and small savings.
• Authorized user. A close person with a long-standing clean account adds you as a user, and the account's history appears in your report. Important: the account must be old, with low utilization and no late payments. Such a line can also be added through us — that is a credit boost.
• A store card or a secured card at your own bank. Store cards and regional banks where you already have a checking account approve more readily. The limit will be small, but the history will start.
• Rent and utility payments. Rent reporting services send your rent to the bureaus, and Experian Boost sends your phone and subscriptions. It's not credit, but a plus for your history while there is little of it.

Order of actions. A secured card or pledge loan in the first month, a second product after three months, an application for a regular card after six. One application at a time: each one is a hard inquiry, and a series of denials only makes the picture worse.

Pay in full before the statement date so a low balance goes to the bureaus, and never miss the minimum payment. After 6–12 months of such history, the first real cards with a $1,000–3,000 limit become realistic.