If you want to build or rebuild credit, certain credit cards are available specifically for people with no credit history or poor credit. Opening a credit card could help fill out your credit report and improve your credit score, as long as you practice responsible financial behavior.
Here are CNBC Select's best credit cards for building or rebuilding credit based on security deposit minimums, fees, rewards programs, APR and more. (See our methodology for more information on how we made this list).
Best credit cards to build credit
- Best for average credit: Capital One Platinum Credit Card
- Best for students: Discover it® Student Cash Back
- Best secured card: Discover it® Secured Credit Card
- Best low deposit: Capital One Platinum Secured Credit Card
- Best for cash back: U.S. Bank Cash+® Visa® Secured Card
- Best for no fees: Petal® 2 "Cash Back, No Fees" Visa® Credit Card
- Best for travel rewards: U.S. Bank Altitude® Go Visa® Secured Card
- Best for small businesses: Bank of America Business Advantage Unlimited Cash Rewards Secured credit card
- Best for Chase customers: Chase Freedom Rise℠
Best for average credit
Capital One Platinum Credit Card
Rewards
None
Welcome bonus
None
Annual fee
$0
Intro APR
None
Regular APR
29.99% variable
Balance transfer fee
$0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
Foreign transaction fee
None
Credit needed
Fair/Good
Terms apply.
Pros
- No annual fee
- No fee charged on purchases made outside the U.S.
- Automatically considered for a higher credit line in as little as 6 months
Cons
- High variable APR
- No rewards program
Who's this for? If you have average credit and are looking to build up to a good or excellent credit score, it's a good idea to consider a credit card designed for average credit applicants, such as the Capital One Platinum Credit Card.
Standout benefits: This card has travel benefits that can save you money and protect you against unexpected issues. These benefits include no foreign transaction fees, *Emergency Card Services, Mastercard ID Theft Protection™, and Fraud Coverage.
Minimum deposit: N/A
Best for students
Discover it® Student Cash Back
Rewards
Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases-automatically.
Welcome bonus
Discover will match all the cash back earned for all new cardmembers at the end of your first year
Annual fee
$0
Intro APR
0% for 6 months on purchases
Regular APR
18.24% - 27.24% Variable
Balance transfer fee
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Foreign transaction fee
None
Credit needed
Fair / New to Credit
*See rates and fees, terms apply.
Pros
- Cash-back program
- Generous welcome bonus
Cons
- Cash-back categories must be activated each quarter
- Cash-back program limits earnings: Enroll every quarter to earn 5% cash back in various categories on up to $1,500 in quarterly purchases, then 1%
- You must be a U.S. citizen and college student to apply for this card
Who's this for? The Discover it® Student Cash Back is our top pick for students looking to build good credit while attending college. You must be over 18 and a U.S. citizen to apply.
Standout benefits: This card provides a generous cash-back program and welcome bonus. It also has no foreign transaction fees, so you can study abroad or vacation outside the U.S. without worrying about paying the typical 3% fee other cards charge. In addition, there's a helpful 0% intro APR for the first six months on new purchases (after, 18.24% to 27.24% variable).
Minimum deposit: N/A
Best secured card
Discover it® Secured Credit Card
Rewards
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.
Welcome bonus
Discover will match all the cash back you've earned at the end of your first year
Annual fee
$0
Intro APR
N/A on purchases
Regular APR
28.24% Variable
Balance transfer fee
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Foreign transaction fee
None
Credit needed
New / Rebuilding
*See rates and fees, terms apply.
Pros
- Cash-back program
- Generous welcome bonus
- Starting at seven months from account opening, Discover will automatically review your credit card account to see if you can transition to an unsecured line of credit and return your deposit
Cons
- Cash-back program limits earnings: 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%
- Low credit line prevents cardholders from charging high-cost items or many expenses
Who's this for? The Discover it® Secured Credit Card is ideal for those looking for a secured card with many of the same perks as a standard card, such as a robust cash-back program, no annual fee and no foreign transaction fees.
Standout benefits: You'll earn cash back on all everyday spending, including elevated returns for gas station and restaurant spending. Plus, starting seven months from account opening, Discover will automatically review your credit card account to see if you can transition to an unsecured line of credit and return your deposit.
Minimum deposit: You must put down a minimum deposit of $200 to open a Discover it® Secured Credit Card, or as much as $2,500. Your credit limit is equal to your deposit.
Best low deposit
Capital One Platinum Secured Credit Card
Rewards
None
Welcome bonus
No current offer
Annual fee
$0
Intro APR
N/A for purchases and balance transfers
Regular APR
29.99% variable
Balance transfer fee
$0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
Foreign transaction fee
None
Credit needed
No credit history
Terms apply.
Pros
- No annual fee
- $49, $99 or $200 refundable deposit
- No fee charged on purchases made outside the U.S.
- Flexibility to change your payment due date
Cons
- High variable APR
- No rewards program
Who's this for? If you're looking for a secured card, but can't afford the typical $200 deposit, look at the Capital One Platinum Secured Credit Card.
Standout benefits: In addition to lower security deposits, Capital One will automatically consider you for a higher credit line in as little as six months with no additional deposit needed.
Minimum deposit: This card has varying minimum security deposits starting as low as $49, $99 or $200 — based on your creditworthiness. If you qualify, you can access a $200 credit limit while only depositing $49 or $99.
Best for cash back
U.S. Bank Cash+® Visa® Secured Card
Rewards
5% cash back on your first $2,000 in combined eligible purchases each quarter in two categories you choose, 2% cash back on eligible purchases in your choice of one everyday category (like gas stations, grocery stores and restaurants) and 1% cash back on all other eligible purchases
Welcome bonus
None
Annual fee
$0
Intro APR
None
Regular APR
29.99% variable
Balance transfer fee
Either 3% of the amount of each transfer or $5 minimum, whichever is greater.
Foreign transaction fees
3%
Credit needed
Poor/None
Pros
- No annual fee
- You can earn cash-back for everyday spending, a rare feature for a secured credit card
- Opportunity to upgrade to an unsecured card if you pay your bills on time and stay within your credit limit
Cons
- No welcome offer
- High APR
- 3% fee charged on purchases made outside the U.S.
Who's this for? If you want to build credit while earning cash back, consider the U.S. Bank Cash+® Visa® Secured Card.
Standout benefits: The U.S. Bank Cash+ card offers up to 5% cash back on certain purchases. If you spend within your credit limit and pay your bill when it's due, over time, U.S. Bank could upgrade you to the U.S. Bank Cash+® Visa Signature® Card. Once you're upgraded, your security deposit will be returned.
Minimum deposit: You must put down a deposit of between $300 and $5,000 which acts as your credit line.
Best for no fees
Petal® 2 "Cash Back, No Fees" Visa® Credit Card
Rewards
1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments; 2% to 10% cash back at select merchants
Welcome bonus
None
Annual fee
$0
Intro APR
None
Regular APR
18.24% - 32.24% variable
Balance transfer fee
N/A
Foreign transaction fee
None
Credit needed
Fair, Good, No Credit
Terms apply.
Pros
- No credit history required (if you do have a credit history, that does factor into the credit decision)
- No fees whatsoever
- 1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments; 2% to 10% cash back at select merchants
- Credit limits range from $300 to $10,000
Cons
- Card isn't for rebuilding credit, but it's good for building credit
- No special financing offers
- No welcome bonus
- Estimated rewards earned after 1 year: $249
- Estimated rewards earned after 5 years: $1,577
Who's this for? The Petal 2 "Cash Back, No Fees" Visa Credit Card is ideal if you're an applicant without credit history because it considers a range of other factors such as bank statements and earnings to determine eligibility. However, if you do have a credit history, that does factor into the credit decision.
Standout benefits: The Petal 2 card charges zero fees*: no annual fee, no late payment fee and no foreign transaction fees. It also offers a rewards program with higher returns for those who pay their bills on time.
Minimum deposit: N/A
Best for travel rewards
U.S. Bank Altitude® Go Visa® Secured Card
Rewards
4X points per dollar spent on dining, 2X on streaming services, at grocery stores (discount stores/supercenters and wholesale clubs excluded effective September 9, 2024) and at gas stations/EV charging stations (discount stores/supercenters, grocery stores and wholesale clubs excluded effective September 9, 2024) and 1X points per dollar spent on all other eligible purchases; cardmembers are also eligible for a $15 credit for annual streaming service purchases
Welcome bonus
None
Annual fee
$0
Intro APR
None
Regular APR
29.99% variable
Balance transfer fee
Either 3% of the amount of each transfer or $5 minimum, whichever is greater.
Foreign transaction fees
None
Credit needed
Poor/None
Pros
- No annual fee
- You can earn travel rewards for everyday spending, a rare feature for a secured credit card
- No fee charged on purchases made outside the U.S.
- $15 credit for annual streaming service purchases
Cons
- Requires a $300 to $5,000 deposit to open the card
- No welcome offer
- High APR
Who's this for? The U.S. Bank Altitude® Go Visa® Secured Card is one of the few travel-focused secured credit cards on the market. So if you want to earn travel rewards on your purchases while building your credit, this card may be a great fit for you.
Standout benefits: This card offers generous bonus spending categories that even compete with some non-secured credit cards. You're also eligible for a $15 credit for annual streaming service purchases. In addition, it doesn't have foreign transaction fees, and you can choose the due date for your bill.
Minimum deposit: You must put down a deposit of between $300 and $5,000 which acts as your credit line. If you spend within your credit limit and pay your bill when it's due, over time, U.S. Bank could upgrade you to the U.S. Bank Altitude® Go Visa Signature® Card. Once you're upgraded, your security deposit will be returned.
Best for small businesses
Bank of America Business Advantage Unlimited Cash Rewards Secured credit card
Rewards
Earn unlimited 1.5% cash back on all purchases
Welcome bonus
None
Annual fee
$0
Intro APR
None
Regular APR
28.49% variable
Balance transfer fee
4% of each transaction (minimum $0)
Foreign transaction fee
3%
Credit needed
Poor/No credit history
Terms apply.
Pros
- No annual fee
- Bad credit may qualify
- Opportunity to transition to an unsecured card for qualified cardholders
- Flexible redemption options
Cons
- $1,000 minimum security deposit
- No welcome bonus
- No introductory 0% financing offers for purchases or balance transfers
Who's this for? The Bank of America Business Advantage Unlimited Cash Rewards Secured credit card caters to small business owners who need to strengthen their credit profile.
Standout benefits: This card keeps it simple with 1.5% cash back on every purchase. You don't have to navigate spending categories or worry about capped cash back.
Minimum deposit: To open an account, you need a minimum security deposit of $1,000, and your credit limit is equal to your security deposit.
Best for Chase customers
Chase Freedom Rise℠ Credit Card
Rewards
Earn unlimited 1.5% cash back on every purchase
Welcome bonus
Earn a $25 statement credit after signing up for automatic payments within the first three months of opening your account.
Annual fee
$0
Intro APR
N/A
Regular APR
26.99% variable APR
Balance transfer fee
5% or $5 of each transfer, whichever is greater
Foreign transaction fee
3% of the amount of each transaction in U.S. dollars.
Credit needed
New/Rebuilding
Terms apply. Information about the Chase Freedom Rise℠ Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Pros
- Low/no credit score requirement
- Generous rewards for everyday purchases
Cons
- Foreign transaction fee
- Small welcome offer
Who's this for? The Chase Freedom Rise℠ is geared toward Chase banking customers starting to establish a credit history.
Standout benefits: The Freedom Rise earns 1.5% cash back on every purchase, which is a flat cash-back rate on par with many of the top cash-back cards that require good to excellent credit.
Minimum deposit: N/A
Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.
More on our top credit cards for building credit
Capital One Platinum Credit Card
The Capital One Platinum Credit Card doesn't offer a rewards program, so you don't have the opportunity to earn cash back, points or miles from your everyday spending. But with no annual fee, it can be a good starter card if you want to eventually upgrade to another card in the Capital One family.
Rewards
None
Welcome bonus
None
Annual fee
$0
Notable perks
The Capital One Platinum Credit Card charges no foreign transaction fees. This perk will save you the typical 3% fee many other cards charge on each purchase made outside the U.S. For example, the average American spends $2,154 a year on travel, and depending on how much of that is done abroad, you could potentially save up to $65 with the Platinum Credit Card from Capital One (and even more depending on your travel spending habits).
This card also offers fraud coverage that provides $0 Fraud Liability for unauthorized charges, if your credit card is lost or stolen, you can get an emergency card replacement and a cash advance, subject to available credit and Mastercard ID Theft Protection™ that is available to help should you become the victim of Identity theft- all at no extra cost.
Discover it® Student Cash Back
Financial experts often stress the importance of building credit at a young age, and opening a credit card while you're a student is one of the easiest ways to establish credit. The Discover it® Student Cash Back stands out for being one of the more rewarding student credit cards on the market.
Rewards
- 5% back for up to $1,500 in purchases in rotating quarterly bonus categories you activate (then 1%)
- 1% back on all other purchases
Welcome bonus
Discover will match the cash back you earn during the first year with no minimum spending requirement or cap on the match.
Annual fee
$0
Notable perks
Outside of its cash-back earnings, the Discover it® Student Cash Back offers no annual fee and no foreign transaction fees, so you can study abroad or vacation outside the U.S. without worrying about paying the typical 3% fee other cards charge. There's also a 0% introductory APR for the first six months on new purchases, which is perfect for financing textbooks or dorm room essentials. After the intro period, there's a 18.24% to 27.24% variable APR.
Discover it® Secured Credit Card
The Discover it® Secured Credit Card gives you access to many of the perks and benefits available to people with higher credit scores. You must put down a minimum deposit of $200 to open a Discover it® Secured Credit Card, or as much as $2,500. Your credit limit is equal to your deposit.
Rewards
- 2% back at gas stations and restaurants on up to $1,000 in combined purchases each quarter
- 1% back on all other purchases
Welcome bonus
Discover will match any cash back you earn during the first 12 billing cycles. So, if you have $100 cash back at the end of the first year, Discover will give you an additional $100.
Annual fee
$0
Notable perks
You will enjoy a robust cash-back program, no annual fee and no foreign transaction fees. What makes this card stand out is the ease with which you can transition to an unsecured card. Starting seven months from account opening, Discover will automatically review your credit card account to see if you can transition to an unsecured line of credit and return your deposit. This takes the guesswork out of wondering when you can transition to an unsecured card.
Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Credit Card stands out from other secured cards for offering lower minimum security deposits — either starting as low as $49, $99 or $200, depending on your creditworthiness. If you qualify, you can still access a $200 credit limit while only depositing $49 or $99.
Rewards
None
Welcome bonus
None
Annual fee
$0
Notable perks
Capital One automatically considers you for a higher credit line in as little as six months with no additional deposit needed. This is a great incentive to practice responsible card management. Unfortunately, there is no rewards program or welcome bonus.
U.S. Bank Cash+® Visa® Secured Card
The U.S. Bank Cash+® Visa® Secured Card allows you to build credit while earning cash back. You must put down a deposit of between $300 and $5,000 which acts as your credit line.
Rewards
- 5% back on your first $2,000 in combined eligible purchases each quarter in two categories you choose. Some categories include: TV, internet and streaming, home utilities, cell phone providers, fast food restaurants and movie theatres.
- 2% back on eligible purchases in your choice of one everyday category (like gas stations, grocery stores and restaurants)
- 1% back on all other eligible purchases
Welcome bonus
None
Annual fee
$0
Notable perks
The cashback you earn can be redeemed in one of three ways: a statement credit to your account, direct deposit to your U.S. Bank checking, savings or money market account, or a U.S. Bank rewards card (similar to a Visa gift card). If you spend within your credit limit and pay your bill when it's due, over time, U.S. Bank could upgrade you to the U.S. Bank Cash+® Visa Signature® Card, but unlike some other cards on this list, there's no clear timeline. Once you're upgraded, your security deposit will be returned.
Petal® 2 "Cash Back, No Fees" Visa® Credit Card
The Petal 2 "Cash Back, No Fees" Visa Credit Card, issued by WebBank, is a unique card that takes a different approach to the credit card application process. Instead of judging your creditworthiness solely based on credit history, Petal may ask you to link bank accounts during the application process. Then, WebBank, analyzes your bank statements and other data, such as bill payments and earnings, to determine your eligibility.
Rewards
- 1% cash back on eligible purchases right away, which can increase up to 1.5% cash back after you make 12 on-time monthly payments
- 2% to 10% cash back at select merchants
Welcome bonus
None
Annual fee
$0
Notable perks
The Petal 2 Card charges no annual fee, no late payment fee and no foreign transaction fees. The ability to earn up to 1.5% cash back after making 12 on-time monthly payments is not only a nice perk but a great way to encourage responsible behavior. The card also stands out for consumers trying to build credit because there's no security deposit required.
U.S. Bank Altitude® Go Visa® Secured Card
The U.S. Bank Altitude® Go Visa® Secured Card stands out for being one of the most rewarding secured credit cards on the market. When redeemed, points are valued at 1 cent each, providing you with virtually 1% to 4% back on your purchases. You must put down a deposit of between $300 and $5,000 which acts as your credit line.
Rewards
- 4X points per dollar spent on dining
- 2X points per dollar spent at grocery stores, gas stations and streaming services
- 1X points per dollar spent on all other eligible purchases
Welcome bonus
None
Annual fee
$0
Notable perks
The U.S. Bank Altitude Go Visa Secured Card doesn't have an annual fee or foreign transaction fees, and you can choose the due date for your bill. You're also eligible for a $15 credit for annual streaming service purchases. As your credit improves, you may be given the option to upgrade to the U.S. Bank Altitude Go Visa Signature Card and claim your security deposit.
Bank of America Business Advantage Unlimited Cash Rewards Secured credit card
The Bank of America Business Advantage Unlimited Cash Rewards Secured credit card provides small businesses a path to building credit while earning rewards.
Rewards
- 1.5% cash back on eligible purchases
Welcome bonus
None
Annual fee
$0
Notable perks
This card requires a $1,000 minimum upfront deposit, but Bank of America will occasionally review the account and if your credit has improved you may be able to switch to an unsecured card. Perks include travel accident insurance, rental car insurance, lost luggage assistance and emergency ticket replacement. You can also monitor the progress you're making with your credit through the Bank of America Business Advantage 360 platform, which allows you to view your Dun & Bradstreet business credit score for free.
Chase Freedom Rise℠
With the Chase Freedom Rise℠, you can build credit and have a path to upgrading to more rewarding Chase credit cards in the future.
Rewards
- 5% cash back on Lyft rides through March 31, 2025
- 1.5% cash back on eligible purchases
Welcome bonus
Earn a $25 statement credit after enrolling in automatic payments within the first three months of opening the account.
Annual fee
$0
Notable perks
This card is a good credit-building option for Chase customers because it's easier to qualify for when you have at least $250 deposited into an existing Chase checking account or savings account.
It has a solid list of insurance protections for a no-annual-fee credit-building card, including purchase protection, extended warranty protection and trip cancellation/interruption protection. It offers several straightforward redemption options for your rewards, such as travel, statement credits and gift cards.
There's also a limited-time partner offer to enroll and receive three months of free DoorDash DashPass when activated by Dec. 31, 2024. Once the free months end, you'll automatically be enrolled in DashPass at 50% off for the following nine months.
Best credit cards for building credit
Credit Card | CNBC Select's pick for | Credit needed | Minimum security deposit | Rewards |
---|---|---|---|---|
Capital One Platinum Credit Card | Average credit | Average, fair, limited | None | None |
Discover it® Student Cash Back | Students | Fair or new to credit | None | Cash back |
Discover it® Secured Credit Card | Secured card | New to credit or rebuilding credit | $200 | Cash back |
Capital One Platinum Secured Credit Card | Low deposit | No credit history needed | $49, $99 or $200 based on creditworthiness | None |
U.S. Bank Cash+® Visa® Secured Card | Cash back | Poor credit or no credit | $300 | Cash back |
Petal® 2 "Cash Back, No Fees" Visa® Credit Card | No fees | Fair, good or no credit | None | Cash back |
U.S. Bank Altitude® Go Visa® Secured Card | Travel rewards | Poor credit or no credit | $300 | Points |
Bank of America Business Advantage Unlimited Cash Rewards Secured credit card | Businesses | Poor credit or no credit history | $1,000 | Cash back |
Chase Freedom Rise℠ | Chase customers | New to credit or rebuilding credit | None | Cash back |
How to choose a credit card for building credit
Deciding which credit-building card is best for you depends heavily on your situation and how you plan to use the card.
Know what cards you're eligible for
Your credit score goes a long way in determining what cards you can qualify for. If you're looking to boost your credit score from average to excellent to increase your approval odds for a home loan, an unsecured credit card could work for you. Credit cards for average credit may also have rewards and other benefits for you to take advantage of. If you're new to credit or recovering from bankruptcy, you may need to start with a secured credit card.
Some credit cards offer pre-approval or pre-qualification, which doesn't guarantee you'll be approved for a card, but it can save you from applying for a card you're likely to be rejected for. In some situations, it may make sense to apply for a card issued by the bank where you have checking or savings accounts because that could boost your approval odds.
Understand what matters when building credit
By making on-time payments, credit cards allow you to slowly rebuild your credit score or fill out your personal credit report. When you keep your credit card balance low, or ideally, pay it off fully each month, this also helps boost your credit score. So building good financial habits is more important than finding the most rewarding credit card.
When you want to use a credit card to establish your credit history, think of rewards as icing on the cake. Don't look for lucrative welcome bonuses or overspending to earn rewards on unlock benefits.
How to build credit with a credit card
There are different types of credit scoring models, such as FICO Score and VantageScore, but the most popular scores use the information found on your credit report. They typically use the information available from the three major credit reporting bureaus: Experian, TransUnion and Equifax.
By opening a credit card, you're adding to your credit profile. However, how you use the credit card is what matters the most.
Pay your monthly bill on time
Your payment history is a huge part of your credit score. So it's important to pay your credit card bill on time and consistently. As these payments are documented in your credit report, your credit score is more likely to improve over time.
Keep your balance low
Your total debt also factors heavily into how your credit score is calculated. Having less debt and using a smaller percentage of your available credit (keeping a low credit utilization ratio) will have a positive impact on your credit score.
This makes having a budget in place an important part of building credit. It can be easy to overspend with a credit card and if you find yourself in this situation, it could hurt your credit instead of help it.
Types of cards to look for if you want to build credit
Rewards and travel benefits shouldn't be the priority when building credit. Rather, you should use a credit-building card to establish responsible credit habits. Once you're in a situation where you can consistently pay off your credit cards in full and on time, then you're ready to consider credit cards with larger welcome bonuses and useful benefits.
Secured credit cards
Secured credit cards require an upfront deposit and your credit limit is based on that deposit. Secured credit cards like the Discover it® Secured Credit Card are less risky for card issuers and you can possibly qualify for secured cards with no credit history or if you have a weak credit score.
Unsecured credit cards do not require a security deposit and have a credit limit based on your income, credit history and other factors. There are unsecured credit cards available to those with average or fair credit, but in general, if you have no credit or bad credit, an unsecured credit card will be your best option for moving your credit score forward.
Student credit cards
If you're interested in opening your first credit card, are over 18 years old and are enrolled in an eligible college, consider a student credit card like the Discover it® Student Cash Back. These cards are designed with students in mind and are often available even if you don't have a credit history. Many of these cards also don't require a security deposit and some even offer rewards.
What does it mean to build your credit?
Your credit score is based on the information in your credit report. To build your credit you need activity, like credit card and loan payments, to be reported to credit bureaus. Your credit score is generally based on factors such as payment history, the age of your accounts and total debt. When you open a credit card and pay the balance on time consistently, this improves your credit score and is a signal to creditors that you're a reliable borrower.
However, having a credit card can work both ways. If you miss payments or are late paying, that harms your credit score. Also, if you pay on time, but accumulate debt that can hurt your credit score. Overall, the best way to build credit is to have a long history of positive activity (i.e. paying on time) with creditors such as banks and credit unions.
Tips for building credit
There's no set formula for building credit. Instead, your habits, over time, will move your credit score in one direction or another. However, there are a few tips that can help you get things headed in the right direction.
Understand how credit scores work
Knowing what goes into your credit score is key to building a healthy credit profile. While there are multiple types of credit scores, the most popular credit scoring models are largely based on factors such as:
- Payment history
- Debt
- Types of credit
- Age of accounts
Each of these factors are weighted differently, and your payment history and debt typically are more important. It's important to develop the habit of paying bills on time and creating a plan to stay out of debt or pay down your existing debt if you want to improve your credit score.
Get added as an authorized user
If your lack of credit history is preventing you from getting approved for a credit card or a car loan, it might make sense to get added as an authorized user on someone else's account.
When you're added as an authorized user, the credit history of that account could be added to your credit report. This can be a double-edged sword, so it only makes sense to go this route with someone with a history of paying their credit cards on time and in full.
Monitor your credit
A credit monitoring service can help you maintain an error-free credit report by alerting you when anything changes on your credit report. There are free credit monitoring services that are useful, but if you want to cover all the credit bureaus you may want to opt for a more robust paid service.
PrivacyGuard, named one of CNBC Select's best credit monitoring services, provides the ability to monitor all three major credit bureaus and offers identity protection.
PrivacyGuard®
Cost
$9.99 to $24.99 per month
Credit bureaus monitored
Experian, Equifax and TransUnion
Credit scoring model used
VantageScore
Dark web scan
Yes, for Identity and Total Protection plans
Identity insurance
Yes, up to $1 million for Identity and Total Protection plans
Terms apply.
Use credit-building tools
Some services can help your credit score by allowing you to include additional information on your credit report. Tools like *Experian Boost™ and eCredable Lift® allow you to add payment history for accounts such as utilities, phone, internet and TV services. Experian Boost works with your Experian credit report and eCredable Lift works with TransUnion.
Experian Boost™
Cost
Free
Average credit score increase
13 points, though results vary
Credit report affected
Experian®
Credit scoring model used
FICO® Score
Results will vary. See website for details.
How to sign up for Experian Boost:
- Connect the bank account(s) you use to pay your bills
- Choose and verify the positive payment data you want added to your Experian credit file
- Receive an updated FICO® Score
Learn more about eligible payments and how Experian Boost works.
FAQs
Why is building credit important?
Building a good credit score is necessary for many major financial moves, including taking out a mortgage, opening a credit card, getting car insurance and sometimes even landing your dream job. If you don't have a good or excellent credit score, you may not get approved for a certain financial product or may pay higher interest rates.
What are the benefits of building credit?
Building credit has many benefits because nearly every facet of your financial life is impacted by the strength of your credit score. Building a good credit score helps improve your approval odds for financial products, helps you qualify for lower interest rates and better terms and allows you to to benefit from robust credit card benefits.
Can I get approved for a credit card with no credit history?
It is possible to sign up for a credit card without having a credit history. It's generally easier to get approved for secured credit cards or starter credit cards, which are designed especially for those who are beginning to build their credit.
How do I improve my credit score?
The best way to improve your credit score is by consistently practicing responsible credit behavior, such as paying your bills on time every month and limiting your credit utilization ratio.
Do authorized users build credit?
Becoming an authorized user on someone else's credit card is a great way to build credit. So long as the primary cardholder has good (670 to 799) or excellent credit (800 to 850), it can be relatively low-risk and allows you to build or boost your credit score. However, there are also instances where being an authorized user can harm your credit score, such as if the primary account holder misses a payment.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best credit cards for building credit.
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Our methodology
To determine which cards offer the best value for rebuilding credit CNBC Select analyzed over 250 major credit cards issued through FDIC-insured banks and NCUA-insured credit unions that are widely available in the U.S.
We compared each card on a range of features, including rewards (e.g., cash back, points and miles), annual fees, welcome bonuses, introductory and standard APR and balance transfer fees and foreign transaction fees. We also considered additional perks (e.g., ongoing travel or merchant statement credits), cardholder protections (e.g., purchase protection, $0 liability protection and travel insurance), the application process when available (e.g., is there a credit pull or required credit score) and how easy it is to redeem points (e.g., are rewards are tied to a specific brand; if transferable, to how many/which partners, can you redeem for straight cash back).
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
For the cards that offered a rewards program, we considered consumer spending data forecasts from location intelligence firm Esri to determine where U.S. consumers are spending the most money, like on dining and travel. We used this to help determine what bonus categories are most useful for consumers. Since the value of a point or mile varies based on what they can be redeemed for, we also considered things like transferability and the ability to redeem for cash-back.
When choosing the best credit cards for rebuilding credit, we focused on cards that are available to consumers with lower credit scores or those with no credit history. While rewards and other benefits were also factored into our decisions, these were secondary considerations.
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Petal 2 Visa Credit Card issued by WebBank.
For rates and fees of the Discover it® Student Cash Back, click here.
For rates and fees of the Discover it® Secured Credit Card, click here.
*For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
Information about the U.S. Bank Altitude® Go Visa Signature® Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.