The Ultimate Guide to Tools and Services That Help Build Credit

Introduction: Why Credit Shouldn't Be a Mystery

Dealing with credit can feel confusing, frustrating, and maybe even a little unfair.

But here’s the good news: building a strong credit score isn't about magic or complicated loopholes. Think of this guide as your toolkit for understanding the paths you can take when trying to build credit.

The Core Credit Building Tools: An Overview

To build credit, you need to add healthy credit factors to your profile that are reported to the three major credit bureaus.¹ The tools below can help, but they all work differently.

Tool Type	How It Works	Potential Drawback
Credit Cards	Unsecured Credit Cards: You get approved for a credit limit you can spend. Secured Credit Cards: You deposit cash upfront (e.g., $200) that becomes your credit limit.	Unsecured Credit Cards: May be more difficult to qualify for. Secured Credit Cards: Requires an initial deposit to fund the card credit limit.
Credit Builder Loan	You make installment payments into a locked savings account, then get the money back at the end.	Your cash is tied up for months or a year.
Rent / Bills Reporting Apps	Uses automated reporting of unique payments (like rent, utility bills, or platform fees).	Success often depends on how many bureaus they report to.
Perpay+	You have up to a $1,000 spending limit reported to the credit bureaus for $5/month.	Payments have to be made through payroll direct deposit.

To understand which one is best for you, let’s dig into the details. If you're ready to explore all the options, here is where you can find the complete guides:

Traditional Cards: Learn more about Unsecured vs. Secured Credit Cards.
Saving to Build: See how Credit Builder Loans Work.
Rent Reporting Solutions: Understand how you could use monthly expenses like rent and utilities to build credit.
The Paycheck-Powered Tool: Dive into the unique features of Perpay+.
Make a Plan That Works for You: Read the full guide on how to take your first step.

Traditional Credit Building Tools: Credit Cards

These options have been around for decades and are effective, but they have requirements that can act as barriers.

Unsecured Credit Cards

An unsecured credit card gives you a line of credit to make purchases until you reach your spending limit.

How it builds credit: Pay the bill on time every month, and the card issuer reports those positive payments.
The challenge: They typically require a higher credit score for approval, which may be difficult for many people with a limited credit history or low credit score.

Secured Credit Cards

A secured credit card looks and works just like an unsecured credit card, but there's one big difference: you have to pay a security deposit first to fund your credit line.

How it builds credit: You use the card for small purchases, pay the bill on time every month, and the card issuer reports those positive payments.
The challenge: You need to pay for your credit limit upfront, which may not be affordable for everyone.

Credit Builder Loans: Saving Your Way to a Score

A credit builder loan works a bit differently than a traditional loan, it’s almost like a reverse loan.

How it builds credit: The bank puts the money in a locked account. You make regular payments over 6–24 months. Once the loan is fully paid, the bank gives you the money. The consistent installment payments are reported to the credit bureaus.⁴
The challenge: You have to wait to access your money until you complete payments on the loan. Plus, you may have to pay interest or fees on the money that gets returned to you.

For a deeper dive into this option, see our complete guide on how credit builder loans work.

Modern Fintech Apps and Services

The landscape for credit building is changing fast. Today, there are many good options for increasing your score that are delivered through apps or online platforms.

1. Fintech Credit Builder Apps & Services

This category includes tools that use unique methods to generate positive reports using recurring payments you’re already making:

Rent/Bill Reporting Services: These services, like some third-party apps, report your on-time rent or utility payments to the credit bureaus. Since these payments aren't normally reported, this can be a boost to your payment history.
The challenge: There can be fees required for these services, and they may not improve every credit score financial institutions use.⁵

Why are these services growing? They recognize that you already pay your bills on time. They simply bridge the gap between your payment habits and your credit report. Learn more in this guide.

2. Perpay+: Straight-Forward Credit Building

Perpay is a paycheck-based financial platform. It’s designed specifically for working Americans with a consistent income who are looking for a reliable path to financial progress.

How it builds credit: Perpay+ reports up to a $1,000 spending limit to all three major credit bureaus for just $5/month. This can have a positive impact on credit factors like credit utilization, depth of credit and available credit – influencing 3 of the 6 major factors! You can also use your spending limit to shop and pay over time in the Perpay Marketplace.* You make payments from your paycheck automatically each pay day, so you don’t have to stress about remembering to make a payment. This establishes a strong, positive payment history on the Perpay Marketplace, which can positively impact the single most important factor in your score: On Time Payment History.¹

Ready for a full breakdown? Check out our dedicated page explaining Perpay+

Building a Plan For You: How to Start Right Now

There are 3 major areas that may be worth focusing on if you are looking to build credit: payment history, credit utilization, and depth of credit.¹ This is important whether your starting point is no credit history, or a low credit score.

Start with Consistency (Payment History): Think through ways to automate your payments to start building that habit.
Credit Utilization: This refers to the percentage of available credit you're using and is a critical factor in your VantageScore.
Depth of Credit: This looks at your age of credit (your average, oldest, and youngest account age) and types of credit accounts you use (revolving and installment).

Ready to craft your path from scratch? Read our full guide on Your Plan for Credit Progress for a step-by-step plan.

Bottom Line

Building credit doesn’t have to be overwhelming. Reading through these guides is a great first step in the right direction. Knowledge is power, and these guides are here to help you decide what path works best for you.

Frequently Asked Questions (FAQs)

How long does it take to see results when building credit? It takes time to build credit, and it’s different for everyone depending on your situation. There are varying recovery times for different actions, which could take anywhere from 3 months to over a year to repair. If you focus on healthy credit factors like on-time payments, you should see positive changes over the first year.³
Are credit building services legit? Reputable credit building services are transparent about how they work and what they report. For example, Perpay is a Certified B Corporation, which means they are committed to a higher level of transparency for their customers. Always check that the service reports your payments to at least one of the three major credit bureaus (Experian®, Equifax®, or TransUnion®).
What is a "hard inquiry," and will it hurt my score? A hard inquiry is when a lender checks your credit when you apply for new credit, like a loan or a credit card. It can lower your score, but the effect is usually small and only lasts for about a year.²

Ready to start your credit-building journey? Sign up for Perpay today!

Sources:

^*Access to the Perpay Marketplace is offered by Perpay, Inc., and is only available to eligible consumers residing in the United States. The Perpay Marketplace is subject to credit approval. Applying for a Perpay account will not affect your FICO® or Vantage® score. However, we may obtain information from Clarity which may affect your credit profile with this alternative credit bureau.

Perpay does not provide financial, legal, or regulatory advice. The content is for general informational purposes only. Any views expressed are those of Perpay, not its partner institutions. We do not endorse or guarantee the accuracy of any linked third-party information. Links to Perpay products are advertisements. All external brand names belong to their respective owners.