The BEST way to begin building your Credit Score for FREE (For Beginners)

Here’s exactly how you can begin building your credit score - without paying any interest, for completely free, and in only 20 minutes. Enjoy! Add me on Snapchat/Instagram: GPStephan

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So here’s what you do to build up your credit, and this is how easy it really is:

Step 1: Go to your bank - really doesn’t matter which one - and get what’s called a “secured credit card.” It’s secured because they “secure” the card with your own money which is put as collateral against your credit line. That’s as simple as it is. Now if you can qualify for an unsecured credit card, meaning all you do is apply and they give you a card without a deposit, all the better - this isn’t too common for people just starting out, but it does happen. It’s very important that when you do this, make sure the credit card doesn’t have an annual fee. The goal of this should be to build your credit entirely for free - and annual fees are usually a total waste, anyway, unless you’re receiving big rewards, which isn’t going to happen when you’re just starting out - so avoid anything like that.

Step 2: This is all common sense. But pay off the card on time. Just charge some minimal stuff to it and pay it off when it’s due - ideally pay it off in full. You do not need to carry a balance and pay interest to improve your credit score - this is a myth and it makes zero difference. Again, the goal is this is that it should be free - so don’t give the credit card companies any of your money. Pay off the bill in full. And you don’t need to charge a ton of money to the card, either. I just recommend putting small charges on it - even if it’s only the occasional gas bill when filling up your car, or when you get some dinner - just minor things.

Step 3: Do this for 6-8 months. Charge a few things to the card, then pay it off in full. Super easy. Just repeat this each month and you’ll slowly accumulate some credit history. But this is where it starts getting fun…now that you have some history to show “I’ve paid my bill off on time and in full, and I don’t do stupid things with my credit cards,” other companies will begin trusting you with their cards, as well…so after about 6-8 months, it’s time to graduate from your secured card or a “basic card” to a “Real” credit card. My favorite first unsecured card would probably be the bank of America cash rewards card.

Step 4: Slowly add more cards into the mix. Generally, you can improve your credit score with the more lines of credit you have available to you. It shows banks that you have more access to capital, can handle multiple credit lines successfully, and this makes them more confident when lending you money at a low interest rate. But step 4 is where the fun starts…this is called Credit Card Churning. This is where you’ll get a credit card for the sign up bonus, get the points, and then redeem it for free travel, hotel stays, or really almost anything. If you can get it, I really like the Amex Gold.

Step 5: Just continue paying them all off on time. That’s it. It’s super easy and the entire process of starting shouldn’t take you longer than about 20 minutes of your time. By far this will be the most productive and profitable 20 minutes of your time in your LIFE if you don’t already have a credit card, or aren’t yet old enough to get a card - just do this the week you turn 18 and you’ll be in great ship to later invest in real estate, get the best deals on just about any loan out there, and just be a responsible adult.

Suggested reading:

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[russlea]

He's not kidding about clicking folks. This guy's got reach. I got turned down for a car loan and the letter from the bank actually stated, "Applicant failed to activate the Like icon on a Graham Stephan credit video."

[JordanChua]

Graham, your Credit Cards 101 video helped me build a 720 credit score in 6 months as a 19 year old. I just wanted to say thanks!

[mnmless]

I have to say, you MUST be on top of your credit report - not just your score! I had a missed payment, which led to me owing money. I wasn't aware of this during my search for a mortgage lender. I got a credit report, and to my dismay I recognised what was stopping me from getting approval from a lender. I fixed all issues and instantly got approval and I am writing this from my OWN home!!! It took less than a year to do.

[CommandoMaster]

Basically just treat your credit card like a debit card. Only put something on a credit card if you already have the funds in your bank account to pay it all off every month.

[zedler]

When I was 18, I opened up Discover credit card. I would literally buy anything with it- coffee, dog food, gas, etc. and then pay it off in like a week. And yesterday I saw the function on discover's website where you can check your credit score. I was surprised to find out that I've had the card only for 9 months and my score was 770 :)

[TranscendentalMental]

My credit score is pretty good because I witnessed enough people making mistakes to know better. But regardless everytime I watch one of your videos I walk away more informed. Thank you!

[phamthichien]

really love the way you summarize your main points in the description box

[OscarMartinez]

Take this advice younger people, this will benefit you in MANY things in life that you couldn't think of 💪🏼

[XanderDoesThings]

my credit score jumped to a clean 850 after hitting that like button

[ryanmcgregorr]

Hi Graham,
I am 18 and got a credit card as soon as I turned 18. I went with the Discover It card which has no annual fee, but it’s not a secured credit card. They gave me a $1500 credit line and I use no more than 10% of it each month. Not sure if this is unusual but I had no problem getting this unsecured card. By the way, I have learned more from your videos than my 15 years of schooling.😂so, thank you for that!🙌

[vendexx]

One of the best things that happened to me, my mother added me as a authorized user on her credit card, which instantly boosted my credit. From there I opened two more credit cards and used them, my credit is sitting at 767 and I just turned 19

[peterojas]

I just opened my 1st line of credit through a credit union that my parents belong to at 43. It was earlier this month when I was approved. First credit card issued to me was from Wells Fargo Bank about 2 months before my 37th birthday. Better late than never at all. It is never too late begin any positive habit.

[HamishHodder]

Churn Churn Churn. I'm 20 and I'm sitting on a 772!

[Smithr]

I'll just say this -- my wife and I did this exact process starting about two years ago... Literally got the Discover It card and then BoA credit card and we both have seen massive increases in our credit score. It's like Graham followed us because it all happened prior to him making this video... And for that I smashed the like button.

[Nujjj]

I turned 18 in October started off with secured $1000, And now last week got approved for $2500 and $5000 for my small business 👌👌

[houstonscatch]

I want the younger Generation to see this. I'm 20 years old and I'm listening to the advise. I'm on my way to buy out someone's business next year with a partner. But I wouldn't be able to do this had I not seen your videos on credit education. Thanks so much, I hope to one day sit down and talk about how it worked out!

[prettystars]

Can I just say how much I appreciate you writing down the main points with details in your description box?! I wished more people did this. Will definitely be watching more videos from you, Graham.

[NachoTV]

Once credit is established...the game of trying to get 820 for fun is unlocked..

[Linzaybabyguac]

I’m finally going to start building my credit as an 18 year old after your video inspired me

[variaproject]

Awesome advice Graham, as always. Fun fact though, I’ve read that you can keep your reported utilization down by paying the balance on the card early, before the end of the month. For instance, I use a $500 limit card for gas all month long and accumulate around $140 after 4 fill-ups. If I pay off $90 of it before the payment is due, my utilization would allegedly be reported each month as being 7% instead of 28-30%! Again, I’ve only read this and haven’t tested it. Any input? It could definitely be the difference between scoring good vs scoring excellent in that category.