Three young women sit on concrete stairwell.

What’s the Best Way to Build Credit?

6 min read

Last Updated: December 2, 2025

Table of contents

Key Takeaways

You can build credit by making on-time payments and keeping credit card debt low.
A student or secured credit card can help you build credit if you have no credit history or a low credit score.
A review of your credit report can help you spot inaccuracies that may hurt your credit.

Your credit history may determine the terms you get on a credit card or a loan. Good credit may get you lower interest rates, for example. But how do you build good credit?

Your credit history is the record of your borrowing and repayment activity. Your credit card company and other lenders report that activity to credit bureaus. Those bureaus record it in your credit report. Your credit report is a full account of your credit history.

Your credit score is a number determined by the information in your credit report. It’s a three-digit number, usually between 300 and 850. Your score shows lenders how likely you are to repay your debts. The higher the number, the more likely you are to make on-time payments and not default on your debts. That’s why a strong credit score can help you qualify for a higher credit limit and lower interest rates. A low credit score has the opposite effect.

Building good credit starts with understanding how credit bureaus calculate your credit score.

Five factors that impact your credit score

Five categories of information influence your credit score: payment history, amounts owed, length of credit history, new credit, and credit mix. You can build or rebuild your credit by addressing each factor. Each affects your score differently.

Here’s a description of each, ranked from most important to least important:

Payment history: Your payment history shows how often you’ve paid your credit card bill and other bills on time. Consistent, timely payments will help your score. Late or missed payments can hurt your score. Consider setting up automatic payments with your credit card issuer. This makes you less likely to miss a due date.
Amounts owed: Your credit utilization ratio is the total amount of debt you owe compared to your total available credit. It includes all your credit accounts. When you keep your credit utilization ratio low, you may be more appealing to lenders. When you pay your credit card balance in full (or as close as possible) each month, your credit utilization will likely remain low. You’ll also avoid credit card debt. Try following a budget or setting up spending alerts on your bank’s mobile app.
Length of credit history: Lenders look at how long you’ve had each credit account. If you close an account, credit agencies eventually remove it from your credit history. If you keep your oldest accounts open, it could help your score. On the other hand, closing an old credit account may negatively impact your credit.
New credit: When lenders request a credit check, credit bureaus may add that check as a new inquiry to your report. That inquiry can stay on your report for two years. Too many inquiries or new accounts in a short time can impact your credit. Be mindful of when and how often you apply for new credit accounts.
Credit mix: Your credit mix is the combination of different types of credit accounts you have. It’s good to have both revolving credit (like credit cards) and installment loans (like a student loan, mortgage, or car loan). If you’ve successfully used different types of credit, a lender may see you as financially responsible.

Secured credit cards may help you build and improve your credit. If you have no credit history and you’re a college student, the Discover it^® Student Cash Back Card can help you build credit with responsible use.¹

Learn More

How to build credit with a credit card

If you use a credit card responsibly by keeping balances low and making payments on time, your credit score may rise. If you don’t have a credit history or you have late payments on your credit report, credit card companies may see you as a risk. In this case, a secured credit card or a student card may be a good option for building credit.

Secured cards and student cards often come with a lower spending limit and a higher interest rate. But these types of cards help you build credit by letting you demonstrate responsible credit use. This can show lenders you can handle debt and open up more borrowing options in the future.

Secured credit card: When you apply for a secured credit card, a credit card issuer will ask if you can make a deposit. You’ll have to deposit a certain amount to be approved for the card. Your credit line will equal your deposit amount, starting at $200 for the Discover Secured Card.² Your deposit acts as collateral.
A secured credit card may also help you get unsecured credit. For example, with Discover, you can upgrade to an unsecured card after 6 consecutive on-time payments and maintaining good status on all your credit accounts.³
Student credit card: A student credit card can help students build credit without a deposit. Credit card companies design student cards to meet the needs of students. For example, there’s no credit score required to apply for a Discover it^® Student credit card.⁴ Student cards may also have more flexible income requirements.
Authorized users: Can’t qualify for a secured card or student credit card? You can still build credit by becoming an authorized user on someone else’s account. You’ll get a credit card with your name on it, but the original account holder will be responsible for paying the bill. If you and the primary cardholder use the card responsibly, you can start building good credit.

Get your credit report and check for errors

Part of building excellent credit is tracking your progress. Your credit report can show you if your credit is improving. Make sure the information on your report is accurate to avoid unwarranted reductions in your credit score.

Did you know?

Everyone can get a free credit report from the three major credit reporting agencies. Under federal law, you can request your credit report once per week at AnnualCreditReport.com.

Check your report regularly for inaccuracies. Take an extra look at your balances and payment history. You can challenge any inaccurate information in your report. You can file a dispute with the credit bureau directly and they may be able to correct the error.

You can also contact the company or lender that reported the negative information and ask them to investigate. If the information is incorrect, they’ll correct it. If the creditor can’t verify that the information is accurate, they’re bound by law to ask the credit bureau to remove it from your credit report.

The bottom line

You can build good credit even if you have no credit history or a poor credit score. How do you build a good credit history? Follow the steps above:

Understand how a credit reporting agency calculates your credit score
Get the right card for your financial situation
Check your credit report regularly

If you’re trying to build a good credit score, start taking these steps today. And remember that there are good credit cards for people with lower credit scores, too.

Important Information >