You don’t need to spend a lot of money to build credit. Small, recurring purchases you’re already making, like gas, groceries, and streaming subscriptions, are some of the best things to put on a credit card for credit-building purposes. The key isn’t what you buy but how you manage the account afterward: keep your balances low, pay on time every month, and let the history accumulate.
That said, you do need the right financial products in place before any of this matters. Here’s what to buy, what to sign up for, and how to use each one strategically.
A Secured Credit Card
If you have no credit history or a damaged score, a secured credit card is the single most effective product to start with. You put down a refundable security deposit, and the card issuer gives you a credit line, usually equal to your deposit. You then use the card like any other credit card, and your payment activity gets reported to the major credit bureaus.
Most secured cards require a $200 minimum deposit, though some offer lower entry points. The Capital One Platinum Secured card, for example, lets you start with a deposit as low as $49 for a $200 credit line. The Discover it Secured card sets your credit line equal to whatever you deposit, starting at $200. The Chime secured card works differently: instead of a traditional deposit, you fund a linked checking account to back the card.
Interest rates on secured cards tend to be high, ranging from about 13% to 29% variable APR depending on the card. But that rate is irrelevant if you pay your balance in full each month, which is exactly what you should do. You’ll never owe a cent in interest, and your on-time payments will steadily build your credit file.
Small Recurring Purchases That Build History
Once you have a credit card, the best things to charge are purchases you’d make anyway and can easily pay off. The goal is consistent, manageable activity that keeps your balance well below your credit limit. Good options include:
- Streaming subscriptions like Netflix or Spotify, which are small, predictable charges each month
- Gas for your car
- Groceries on a weekly or biweekly basis
- Coffee or other small daily purchases
- A gym membership or other fixed monthly fee
A single streaming subscription for $15 a month is genuinely enough. You don’t need to put large purchases on the card to build credit faster. What matters is that the account shows regular use and consistent on-time payments. Charging a small subscription and setting up autopay is a simple, low-risk way to do exactly that.
Keep Your Utilization Low
Credit utilization is the percentage of your available credit you’re currently using. If you have a $200 credit limit and carry a $160 balance, that’s 80% utilization, which will drag your score down even if you pay on time. Keeping utilization below 30% is a common guideline, and lower is generally better.
On a $200 limit card, 30% means spending no more than about $60 before your statement closes. This is why small purchases work so well. If your limit is tight, consider paying your balance down before the statement closing date so a lower number gets reported to the bureaus. The Consumer Financial Protection Bureau notes that credit scores can be calculated on any day, so a temporarily high balance could affect your score even if you pay it off in full the next day.
A Credit Builder Loan
A credit builder loan flips the usual loan structure. Instead of receiving money upfront, you make fixed monthly payments into a savings account, and the lender reports those payments to the credit bureaus. Once you’ve paid off the loan, you get access to the money (minus fees and interest). It functions like forced savings that also builds your credit file.
Self, one of the most widely used credit builder loan providers, offers a 24-month plan with monthly payments ranging from $25 to $150 depending on the option you choose. Some banks and credit unions offer similar products. A credit builder loan paired with a secured credit card gives you two different types of accounts reporting to the bureaus, which helps build what lenders call a “credit mix.”
Authorized User Status
If a family member or trusted person has a credit card with a long history of on-time payments and a high credit limit, being added as an authorized user on that account can give your credit a boost. The card’s payment history and available credit can appear on your credit reports, potentially raising your score without you opening a new account yourself.
You don’t even need to use the card. The credit-building effect is the same whether you make purchases on it or simply have your name on the account. However, there are a few things to confirm first. Ask the primary cardholder to verify that their card issuer reports authorized user activity to the credit bureaus. Not all do, and if the account doesn’t show up on your reports, there’s no benefit. Also understand the risk: if the primary cardholder misses a payment or runs up a high balance, that negative information can appear on your credit report too.
Being an authorized user is a helpful stepping stone, but lenders ultimately want to see that you’ve managed your own accounts. Think of it as a complement to your own secured card or credit builder loan, not a replacement.
Rent and Bill Reporting Services
You may already be making payments every month that could count toward your credit history. Rent reporting services take your monthly rent payments and report them to one or more credit bureaus, adding a positive tradeline to your file. Utility and phone bill payments can also be reported through certain platforms.
Costs vary widely. Self offers a free basic rent-reporting plan. Boom charges $3 per month for ongoing reporting, plus a one-time $25 fee if you want to include up to 24 months of past payments. RentReporters charges a $94.95 signup fee plus $8.75 to $10.95 per month depending on whether you pay annually or monthly. Experian Boost lets you add utility and phone payments to your Experian credit report at no cost, though the benefit only applies to scores pulled from Experian.
These services work best as a supplement. They won’t replace the impact of a credit card or loan with consistent on-time payments, but they can help fill out a thin credit file, especially if you’re already paying rent and bills reliably.
Pay in Full Every Month
One persistent myth is that you need to carry a balance and pay interest to build credit. You don’t. The CFPB confirms that paying off your credit card balance every month is one of the factors that can help improve your score. Carrying a balance just costs you money in interest charges without any credit-building advantage.
Set up autopay for at least the minimum payment as a safety net so you never accidentally miss a due date. Then pay the full statement balance each month. Payment history is the single most influential factor in your credit score, and even one missed payment can cause significant damage. The combination of on-time payments, low utilization, and a growing account age will steadily push your score upward over the months ahead.