How to Create a New Credit File Legally

Written by stephen benham
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How to Create a New Credit File Legally
Create your new credit file. (businesswoman holding a file image by Francois du Plessis from

Your credit file is important. The information stored on your file is used by lenders to work out whether you are suitable for a line of credit. A poor credit file can mean getting declined for credit. Not having a credit file makes it difficult to get credit, as lenders have no historical information to help them make an informed decision. If you are new to credit, perhaps a college student, or have recently become a U.S. resident, you need to create a new credit file legally.

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    Get a prepaid card to start creating a new credit file legally. Apply online. It’s fast, easy and there are no credit checks. Acceptance is guaranteed, provided you can prove your identity. Many card issuers offer MasterCard and Visa cards. Joining fees and monthly management fees are charged. They vary so check the best option for your requirements. There is a charge for ATM withdrawals. Importantly, ensure the card you apply for provides credit building. This means that certain transactions made using the card, are reported to the credit building company, PRBC (Pay Rent, Build Credit Inc.).

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    Get a secured credit card: it’s a great way to create a new credit file legally. Apply online. All major banks offer these cards. Check websites to see the range of cards. Application is quick and simple. You need to make a deposit to open a secured card account. You will get a credit limit of up to two times your deposit. Interest is payable on any balance outstanding each month. If you pay the total amount due each month there are no interest charges. Payment history is reported to credit reporting bureaus.

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    Get a store card. Apply online or in the store. Interest charges on outstanding balances can be high but they are easier to get than a regular credit card. Pay the full balance each month and no interest is charged. Payment history is reported to the credit reporting bureaus and assists in creating a new credit file legally.

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    Set automatic monthly payments for your gas, electricity, water and telephone. Utility companies report to credit reference bureaus. Payments are recorded on your credit file.

Tips and warnings

  • If you apply for a secured credit card ensure the card issuer uses credit reporting. Some don’t and therefore do not help in creating a new credit file. Check the Federal Trade Commission website (see Resources).
  • Once you’ve created your new credit file, get a copy from You can get a report from each of the three credit reporting bureaus free once a year (see Resources).

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