How to Build Credit From Scratch: The Path to a 700+ Credit Score
Read Time 5 mins | Written by: Kelly Fleiner
Key Takeaways
- Building credit from scratch typically takes six months to a year of consistent, on-time payments to establish a solid credit history.
- Secured credit cards and share-secured loans are excellent tools for building credit without taking on risky debt.
- Always look for low interest rates, no annual fees, and transparent terms when choosing credit-building products.
- Pay every bill on time and keep your credit utilization below 30% to build a strong credit foundation.
- RMCU offers tools like SavvyMoney credit monitoring and financial counseling to help you stay on track toward your credit goals.
Whether you're a recent high school graduate or a young professional navigating adult life, building credit is one of the most important financial moves you can make.
Think of your credit score as your financial reputation. A score of 700 or above can unlock better interest rates, easier rental approval, and lower insurance premiums. Without any credit history, you're essentially invisible to lenders — which can be just as challenging as having bad credit.
The good news? Learning how to build credit from scratch doesn't have to be complicated — especially when you've got the right partners in your corner. There are plenty of ways to build credit responsibly without putting yourself at financial risk.
Ready to build great credit? Monitor your credit score with Savvy Money, available for all RMCU members.
How Long Does It Take to Build Credit?
Most people can establish a credit history that is scorable within six months of opening their first credit account. Reaching a 700+ score typically takes one to two years of responsible credit use, including on-time payments and maintaining low credit utilization.
The key is patience and persistence. Make every payment on time, keep your credit card balances well below your limit (ideally under 30%), and avoid opening too many accounts at once.
Smart Credit-Building Tools
Secured Credit Cards
If you're wondering how to build credit without a credit card, the truth is that credit cards remain one of the most effective tools for establishing credit history. But you don't need to qualify for a traditional card to get started!
Secured credit cards require a cash deposit that serves as your credit limit. Make a $500 deposit, and that amount will serve as your spending limit. You use the card just like any other credit card, making purchases and paying them off each month. Your deposit minimizes the lender's risk, making it easier to qualify even with no credit history.
As you demonstrate responsible use, many secured cards are converted to unsecured cards, and your deposit is returned.
Traditional Credit Cards
If you qualify, a traditional (unsecured) credit card is one of the most straightforward ways to build credit. Unlike secured cards, these don't require a deposit — your credit limit is based on your creditworthiness.
RMCU offers low-interest Visa credit cards* with no annual fees and rewards options, making them a smart choice when you're ready to take the next step. The key is using the card responsibly: make small purchases, pay off the balance each month, and watch your credit grow!
Share-Secured Loans
Another great option is a share-secured loan, which uses money in your savings account as collateral. RMCU offers share and certificate-secured loans that let you borrow against your own savings.
The interest rates are typically lower than those of unsecured loans, and your payment history gets reported to credit bureaus, helping you build credit while your savings continue earning dividends. For Montanans who value self-sufficiency, you're effectively lending to yourself while building credit.
Student Loans
Already paying on student loans? That's working in your favor! Making on-time payments toward student loans contributes to your credit history and demonstrates your ability to manage installment debt. Keep those payments consistent, and you'll be building good credit habits without taking on additional debt.
Auto Loans with a Co-Signer
If you need a vehicle to get to work or school (essential in Montana), consider an auto loan* with a trusted family member as a co-signer. This can help you qualify for better rates while building your credit history. Just remember — your payment history affects your co-signer's credit score too, so treat every payment as if your reputation depends on it.
What to Look for in Credit-Building Products
Not all credit products are created equal! When you're shopping around, keep these factors in mind:
Low Interest Rates: Credit unions like RMCU typically offer lower rates than big banks because we're member-owned and pass our profits back to you.No Annual Fees: RMCU's Visa credit cards* come with no annual fees, so more money stays in your pocket.
Transparent Terms: Read the fine print. Understand what happens if you miss a payment and how the product reports to credit bureaus. A good financial institution will explain everything clearly.
Best Practices for Managing Your Credit
Once you've got your credit-building tools in place, follow these guidelines:
Pay on time, every time. Payment history is the biggest factor in your credit score. Set up automatic payments so you never miss a due date.Keep balances low. Using less than 30% of your available credit signals to lenders that you're not overextended.
Monitor your credit regularly. RMCU members can use the SavvyMoney tool to track their credit score and catch any errors early.
Don't close old accounts. Length of credit history matters.
Mix it up. Having different types of credit — like a credit card and an installment loan — can boost your score over time.
Want to learn more about building credit? Check out RMCU's Money Mastermind series, which includes lessons on "What is Credit?" and "Using Credit Wisely."
Get Support on Your Credit Journey
Building credit from scratch starts with a single step—whether that's opening a secured credit card, setting up a share-secured loan, or speaking with an expert about your options. RMCU is here to help you build the credit foundation you need for whatever adventures lie ahead.
Building credit is a marathon, not a sprint, and you don't have to figure it out alone! Schedule an appointment with one of RMCU's financial counselors to develop a personalized plan tailored to your goals and budget.
*Some restrictions apply. On approved credit. Must qualify for membership. Each account is privately insured up to $250,000 by American Share Insurance. By members’ choice, this institution is not federally insured.
Kelly Fleiner
elly Fleiner, CUBDP is the Vice President of Brand and Community Engagement at Rocky Mountain Credit Union, where she leads marketing, public relations, and community impact initiatives rooted in Montana values. A strategic storyteller and culture champion, Kelly blends data-driven insight with people-first leadership to strengthen brands, empower teams, and deepen community connections. She is passionate about elevating the credit union movement through bold ideas, meaningful partnerships, and authentic engagement.