There have never been more ways to establish and build a credit score

The roughly 50 million American consumers who have no or limited credit history are in luck.

In recent years, many financial services companies have launched programs to establish and expand credit for those who find it difficult to access the traditional banking system. There are even ways people can build credit without going into debt.

“There’s never been more ways to build your credit, and that’s a really good thing,” said LendingTree credit card expert Matt Schulz. “Lenders want to find ways to help people build credit.”

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Having a credit rating is important because without it it can be difficult to get loans. Many Americans rely on mortgages, car loans and other debt to build wealth. It is also necessary in many places to have a solid credit score to rent an apartment.

“There is a growing awareness that many people have been locked out of the traditional credit system,” said Ted Rossman, senior industry analyst for

Here’s what consumers need to know about building a credit score the non-traditional way.

Where to start

Before trying to establish and build credit, it’s a good idea to check and make sure you don’t have a credit report from any of the three major reporting companies – TransUnion, Experian and Equifax – said Shulz.

“It’s possible that they have a credit report and they don’t even realize it because they may have been victims of identity theft or fraud,” a- he declared. If you already have a report compiled, it may contain errors that you need to correct.

Of course, having a report on file doesn’t mean you have a credit score – some 21 million consumers don’t have enough information about it to have one. Still, making sure the information is accurate is an important first step that can help you establish a solid score.

Use a credit card or loan

According to Howard Dvorkin, CPA and President of, perhaps the easiest way to get a credit score is to be added as an authorized user on someone’s credit card who already has excellent track record.

Of course, that’s not an option for many Americans. If you still want to have a credit card but don’t qualify because you don’t have a credit history, a good way to start is to use a secured credit card, if you’re someone. one who already has a bank account with savings.

Unlike most traditional credit cards, which are unsecured, a secured card requires you to pay a deposit first. If you have $250 to deposit, you will usually get a $250 line of credit.

Usually it takes you at least six months to see any chances in your credit score no matter what you do.

Kate Hao

founder and CEO of Happy Mango Credit

“It’s a good practice way to both build credit and get comfortable with using a credit card,” Schulz said, adding that secure cards minimize risk factors because money to pay the line is already in the bank.

Likewise, you can opt for a credit builder loan, which is often available at credit unions and smaller banks. These are loans that you will pay in installments and receive at the end. Making timely payments will boost your credit score.

“You make the payments and put some money in to get the process started,” Schulz said.

Pull other payments

There are also services now that allow you to withdraw other monthly payments you make to show your creditworthiness.

In late January, Experian launched a product called Experian Go that allows users to create a credit report and score using any lines of credit already in your name, such as a car or student loan. Additionally, people can use Experian Boost, which allows users to add payments like cell phone bills, utility bills, and streaming services like Netflix and Hulu to their Experian credit report.

“It’s a very quick way for a consumer to not only build a credit profile, but also build a credit score very quickly and instantly,” said Jeff Softley, president of Experian Consumer Business.

Other services also allow you to incorporate your monthly rent payments into your credit report, which could improve your score. Some are paid while others are free, especially if your landlord also uses it.

“For many people, it’s their biggest monthly expense, and it’s usually not flagged on credit reports,” Rossman said.

What to avoid

There’s one key thing to avoid when building credit, whichever route you choose: missing payments.

Although it takes time to get a good credit rating, your progress can be quickly wiped out if you only miss one monthly payment. If you’re using a credit card or other payments to build a score, Dvorkin recommends putting bills on autopay to make sure you don’t miss a thing.

Also, if you’re going to begin the process of building credit, understand that it takes time and discipline, and it pays to have some financial foundations in place, like a solid budget. After six months to a year of on-time payments, you can check your credit report and your scores.

“Usually it takes you at least six months to see any chances in your credit score, no matter what you do,” said Kate Hao, founder and CEO of financial services company Happy Mango Credit. “Be patient; building a credit score takes time.”

Experts also said people should do their research on which path is best for them and look at the free options first. Although there are some programs that improve scores for a fee, such as eCredable Lift which works with Transunion, it is also possible to improve your credit at no cost.

“There’s no reason to pay to set up a credit report or score,” Dvorkin said.

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