CREDIT STRENGTH SERIES

Building strong credit doesn’t have to be confusing—but it does have to be done right. It also doesn’t happen overnight, so getting started as soon as possible is vital.

In this Credit 201 guide, I’ll walk you through 6 Early Moves to Begin Building Strong Credit. These methods are simple, effective, and designed to help beginners lay a solid credit foundation, opening doors to bigger opportunities down the road while steering clear of common mistakes.

There are even more advanced techniques (and a few major pitfalls to avoid) once you gain momentum, which we’ll cover in the next article—but mastering these early moves is the smartest way to start.

Six Pratical Ways to Begin Building Strong Credit

1. Authorized User (Free)


This is one of the fastest ways to start building credit—if it’s done right.

When someone (usually a parent, spouse, or close friend) adds you as an authorized user on their credit card, their account can show up on your credit report, even though you’re not legally responsible for the debt. You’re not applying for the card, and you’re not a co-applicant (a setup where both borrowers apply together and are equally responsible for the debt). You’re simply being added to the account.

Think of it like getting invited onto a team mid-season—you didn’t play the games, but their stats might boost your standing.

Pros:

You don’t need to use the card, swipe it, or even touch it. Just being added to the account can boost your credit—if the card issuer reports authorized users or if the bureaus treat it as a full account (which happens often).

If the cardholder is responsible, this is a massive win with no effort. It can help you:

• Improve your score through on-time payment history
• Boost your score by lowering your revolving credit usage (utilization)
• Immediately gain credit history on your credit report
• Extend your average account age
• Add a perfectly reporting tradeline to your file

It’s one of those rare “do nothing, gain everything” plays… as long as the cardholder keeps doing everything right.

But here’s the catch: How that account reports depends entirely on the credit card company. Some issuers clearly label it as an authorized user account, and its impact can be minimal. Others—like I’ve seen personally with Amex and Chase—can end up reporting it just like a full co-applicant account.

Cons: When it Backfires

After you’re added, regardless of how the account is being reported, if the cardholder carries a high balance or misses a payment, you will take a hit.

Creditors are more likely to report negative data than positive—especially when they’re trying to collect. Adding a late payment or collection to someone’s credit report often triggers action, because it pressures the borrower(s) to pay.

Personally, as an authorized user, I’ve watched my score drop twice because of high balances—even though I wasn’t responsible for a dollar of it. I had to contact the lenders to have them remove the account from my credit report because it was dragging my score down. The negative impact outweighed the advantage of having it report positively.

If you have deep, well-established credit and have one card with a high balance, typically that is OK. However, when you only have one or two tradelines and they are maxed out, this is not good.

Best-Case Scenario

The ideal setup is to find someone with a credit card that’s been open for years, has a perfect payment history, and carries a very low or zero balance. Have them add you as an authorized user, and then make sure the account stays unused.

For maximum benefit, the credit card company should ideally report you as a co-applicant (even if you’re technically just an authorized user); that will give your score a serious boost.

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2. Become a Co-Applicant on a High-Quality Credit Card

In #1, we covered becoming an authorized user and how that approach can sometimes give you nearly the same benefit as a co-applicant. But if you have someone—like a parent, spouse, or trusted family member—with exceptional credit, becoming a co-applicant (joint account holder) on their credit card is an even stronger move.

Here’s Why This Works So Well:

• Immediate Credit Boost: As a co-applicant, the entire credit limit, payment history, and account age fully and immediately appear on your credit report. This carries significantly more weight than simply being an authorized user.
• High Limit, Low Utilization: Choose a card with a high credit limit and a consistently low (or zero) balance. That high available credit immediately lowers your utilization ratio, potentially giving your credit score a quick and significant lift.

Two Great Ways to Do This:

1. Open a New Card (Co-Applicant): Have someone with excellent credit apply for a new card together with you. The new account immediately appears on your credit report, boosting your available credit and accelerating your credit-building process.
2. Join an Existing Card: If someone already has a long-established card with a strong payment history, high credit limit, and ideally no balance, having them add you as a co-applicant instantly enhances your credit profile by adding significant account age, history, and available credit.

Cons and Important Considerations:

• Equal Responsibility: As a co-applicant, you’re equally liable for the balance. If the other person racks up debt or misses payments, your credit takes the hit too. This account remains on your report for seven years—good or bad.
• Permanent Change: Becoming a co-applicant is a bigger commitment than authorized user status. You can’t easily remove yourself—typically, the account must be closed and paid in full to change the arrangement.

Smart Use:

• Keep the card balance extremely low, ideally paid off monthly.
• Utilize the added available credit primarily as a credit-building tool—not extra spending power.
• Monitor the account monthly to ensure it’s consistently boosting—not harming—your credit.

Bottom Line:

Becoming a co-applicant on a strong, healthy credit card can significantly jump-start your credit-building journey. You immediately gain a high-limit tradeline, strong payment history, and account age, all of which accelerate your path to excellent credit.

This isn’t just another way to build credit—it’s possibly the strongest, fastest, and most impactful method to turbocharge your credit profile, provided you partner with someone you fully trust.

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3. Use a Rent Reporting Service

How It Works

Services like RentReporters act as a middleman between you and the credit bureaus. They help turn rent payments you’re already making into credit-building opportunities.

1. Verification: You give RentReporters permission to verify your identity and monthly rent payments through your landlord or property manager.
2. Reporting: Once verified, RentReporters reports your rent payments to all three major credit bureaus—Equifax, TransUnion, and Experian.
   (If you’re not familiar with those, check out “Credit 101: What School Didn’t Teach You” for a breakdown of how the credit bureaus work.)
3. Impact: Your rent history shows up on your credit report—typically within 5–7 days—and can positively influence your score by adding payment history and account age.

Most competitor services, like LevelCredit or Rental Kharma, only report to one or two bureaus—usually TransUnion and Equifax. Very few include Experian.

Pros: Why This Can Help

• Most landlords don’t report rent payments, so using a service like this lets your rent directly improve your credit score.
• If rent is your biggest monthly bill (as it is for most people), this converts a major expense into a powerful credit-building tool.
• On-time payments build your payment history, which is the #1 factor in your credit score.
• It’s a non-debt tradeline, meaning you’re not taking on risk or interest—just getting credit for what you’re already doing.
• RentReporters can report up to 24 months of past rent payments, providing an instant boost to your credit profile.

Cons: Where It Falls Short

• Fees: RentReporters charges $95 to enroll and $10/month.
  However, after your rent history is reported, you can cancel and the tradeline remains. It won’t update further, but the 24 months of positive history will still benefit your credit report.
• Landlord Cooperation: Successful reporting often requires your landlord’s participation to verify rent payments.
• Credit Score Models: Not all credit scoring models factor in rent payments, so the impact may vary depending on the lender’s scoring system.

Smart Moves for Success:

1. Review your credit reports regularly to ensure everything is being reported accurately.
2. Make sure the service reports to all three bureaus—RentReporters does, while many others don’t.
3. Confirm that they offer backdated rent reporting; this can jumpstart your credit profile, giving you a long-standing tradeline overnight.
4. Before signing up, check if your landlord or property manager is willing to verify payments—some services require their participation.

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This is another basic, beginner-friendly way to get started. A secured credit card works just like a regular one, but you secure your credit line with your own money up front.

How It Works:

You put down a deposit (usually $200–$500), and that becomes your credit limit. Use it for small purchases, pay it off on time, and you’re officially building credit.

PROS: When It Works

• Easy approval—even with little or no credit history
• Builds payment history, which is key to raising your score
• Often free for the first year with no annual fees
• You’re using your own money, so there’s no debt risk
• If managed well, it can lead to an upgrade to an unsecured card

One of the key advantages of using a secured card is that as long as you make payments on time, you’re building credit for free. The only real cost is the opportunity cost of your deposit sitting in the issuer’s hands to secure your account.

CONS: Where It Falls Short

• Not all secured cards report to all three credit bureaus—or sometimes any at all. If they don’t report, it’s worthless.
• Some only report if you’re late—or report infrequently (like every 4–6 months).
• These cards are flagged as “secured” accounts, which carry less weight with lenders.
• While useful, they won’t take you far—they’re just a first step.
• Requires a cash deposit that ties up your money.

The credit bureaus clearly flag this as a secured line of credit. While it still counts, many lenders prefer to see unsecured accounts or lines backed by tangible assets (like a car or home)—not just cash on hold.

Smart Moves for Success:

Tip 1:
Some cards offer introductory promos—like no annual fee for the first year. Use the card during that period. Then, when the renewal comes up, either cancel it or call the issuer. If you’ve shown good usage and payment history, they may convert the card internally to an unsecured version without a fee.
If not? No problem. Close the account—you’ll still retain a paid tradeline with strong history on your credit report.

Tip 2:
Stagger a few of these. Having 1–3 secured cards at once is smart. More tradelines = more depth.
Most lenders (especially banks and dealerships) see any report with fewer than 5 tradelines—paid or active—as a “thin file.” Even if your score is 700+, if you only have one account reporting, you may not qualify for a substantial loan.

It’s not always about your score. It’s about your credit profile.

Secured credit cards aren’t great—but they serve a purpose. Like training wheels, they’re not built for speed—but they’ll keep you upright until you’re ready to ride solo.

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5. Department Store Credit Cards

You’ve probably seen offers at checkout: “Sign up today and save 20%.” Many department stores offer their own branded store credit cards—think Kohl’s, JCPenney, Macy’s, or TJX stores (TJ Maxx, Marshalls, HomeGoods)—and these can be a good option if you’re just starting out.

Unlike Visa, Mastercard, or cards issued by banks like Chase or Citi, many of these store cards are issued directly through the retailer or a retail-branded financial arm (like Synchrony Bank or Comenity Bank). Here’s why that’s good news for beginners:

• Easier Approval: Store cards usually have lower credit score requirements, making them accessible to people with limited or no credit history.
• Credit Building: They report to the major credit bureaus each month, helping you establish consistent and positive payment history.
• Retail Discounts: Cardholders often get exclusive offers, rewards, or discounts—so if you regularly shop there anyway, you can save extra money.

But Be Careful…

There are important drawbacks you should consider carefully:

• High Interest Rates: Store cards typically come with APRs well above 25%. Make a habit of paying in full each month to avoid steep interest charges.
• Limited Use: Usually, these cards can only be used at their family of stores, severely limiting their convenience.
• Small Credit Limits: Often you’ll start with a lower limit ($300–$500), which can be quickly maxed out if you aren’t careful—potentially hurting your credit score by raising your utilization.

Smart Ways to Use Store Cards:

• Get one from a store you already shop at regularly.
• Make small purchases you can comfortably pay off each month.
• Pay in full, on time, every single month to avoid interest and build solid credit.
• After a year of responsible use, consider applying for a general unsecured credit card with better terms.

Department store cards aren’t perfect, but if used responsibly, they’re a solid stepping stone toward better credit options down the road—without the difficulty of qualifying for a major bank-issued card right away.

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6. Credit Unions

Credit Unions: The Hidden Gem for Building Credit

If you’re just starting to build credit, a powerful move you can make is to open an account at a credit union—not a big national bank. Credit unions are member-owned, which means they exist to serve their members, not to maximize profits for shareholders. As a result, they often offer lower fees, better loan options, and more flexible lending standards compared to big-box banks like Bank of America or Wells Fargo.

Why Credit Unions Over Big Banks?

In the past, big banks had an advantage: tons of ATM locations. That mattered when cash was king. But today?

• Mobile apps make depositing checks easy without ever visiting a branch.
• Apple Pay and other services reduce the need for cash.
• ATM access is less critical than it used to be.

Today, the real value lies in building a personal banking relationship—and credit unions shine here. When you have an account at a credit union, you’re not just another number. They’ll often be more willing to work with you when it’s time for loans or credit cards, especially once you have some history with them.

Smart Moves to Get Started:

1. Find a credit union you qualify for.
   You might qualify through a parent’s job, military service, your school district—or simply by living or working nearby! Always check!
2. It’s easier than you think:
   • Pentagon Federal Credit Union (PenFed): Open to anyone nationwide—no military service required.
   • Navy Federal Credit Union (NFCU): Open to military members, veterans, their families, and household members.
   • Clark County Credit Union (Las Vegas): Open to public employees, medical workers, and their family members in Clark County.
   • Redwood Credit Union (Northern California): Open to anyone living or working in select Northern California counties.
3. Confirm Bureau Reporting:
   Most major credit unions—like PenFed and NFCU —report to all three bureaus automatically. But some smaller credit unions might not. Always confirm they report your loan or card payments to Equifax, TransUnion, and Experian to make sure you’re truly building credit.
4. Open a checking or savings account right away.
   Start your relationship early—even if you don’t need a loan yet.
5. Use it for your everyday banking.
   Set up direct deposit, pay bills, and build consistent activity over time.
6. Set up a youth account if you have kids.
   Many credit unions offer youth accounts that teach financial habits, start a banking relationship early, and give your child a head start most adults never had.

The Credit-Boosting Power of Credit Union Loans

One of the biggest advantages of credit unions is their credit-building loans. These are small, low-interest loans designed specifically to help you establish or rebuild credit safely and affordably.

Here’s how it works:

• Borrow a small loan from the credit union.
• Deposit that loan money directly back into your account at the credit union.
• Set up automatic payments from that same account.

Result: consistent on-time payments that build your credit history automatically—without extra effort or risk.

Real-World Example:

• Borrow $5,000 at 6% over 36 months:
  • Payment: ~$152/month
  • Total interest: ~$475 over 3 years

If you keep the $5,000 in a savings account earning ~2% interest, you could recover ~$140 of that cost, making it incredibly cheap to build years of positive credit history.

Better Credit Cards, Too:

Credit unions also tend to offer beginner-friendly unsecured credit cards with:

• Lower interest rates
• Lower or no annual fees
• Easier approval if you already have an account

Bottom Line:

Credit unions are one of the easiest, cheapest, and safest ways to start building strong credit. Open an account early, use their tools smartly, and you’ll build a solid financial foundation without the big-bank headaches.

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Up Next in the Credit Strength Series:

These six early moves can kickstart your credit journey, giving you a strong foundation to build on. But they’re just the beginning. In the next article, I’ll share more strategies to strengthen your credit file—and cover the key pitfalls to steer clear of, so you can build smart credit without setbacks.