“Pay extra on the principal balance as well, in order to pay the loan off faster. “Put that money in an account and only use it to make the payments (on time) for the loan,” says Wright. Erik Wright, creator of the blog Real Life Investor Couple, recommends taking out a small personal loan from a local bank, even if you don’t really need the money. Similar to opening a credit card, taking out a loan and being responsible with repayment can help you establish a credit profile. When using a credit card to start building your credit profile, know that one card is plenty to establish repayment history, says Huynh. “Therefore, some history is required, and most preferably, that history comes in the form of how well you have repaid debt.” “Credit scores are all about assessing your level of financial responsibility,” says Freddie Huynh, vice president of data optimization for Freedom Financial Network. Opening this type of account can be a great first step on your credit building journey. For this reason, secured credit cards are far easier to obtain than standard credit cards if you have little to no established credit history. These types of cards require an upfront cash deposit to open, which acts as collateral giving the credit card issuer a bit of security should you fail to make payments. One of the best ways to do this if you’re just starting out is to open a secured credit card. In case this isn't obvious: You must use credit in order to build credit. “Knowing these factors and how they impact your score will help you on your journey to improving your credit,” says Brittney Castro, a CFP with Mint. There are five major contributing categories: payment history (paying on time) credit utilization (how much you owe against the credit line available) length of credit history (how long you have had the credit line open) types of credit (how many different types of credit lines you have, such as mortgage, car loans, student loans, and credit cards) and new credit (whether you’ve applied for a new loan or other credit recently). Understand the factors that contribute to your credit scoreīefore you start building your credit profile, it’s important to understand each of the factors that play into the overall score. To help demystify the process, we asked McCreary and other leading credit industry voices to share their top tips for developing and maintaining a stellar credit profile. "Knowing which levers to pull can help put you on the right path to improving and maintaining your scores." "Because credit is so complex, building it takes time and patience, especially if you're trying to rebuild bad credit," says Colleen McCreary, chief people officer and financial advocate for Credit Karma. But that's merely one of the steps involved. In order to have a solid credit profile, one that earns you the most competitive interest rates on applications, you must establish lines of credit and have a history of responsible use. Building credit (or resurrecting a damaged credit profile) is not something that happens overnight or without effort.