No job nor any credit history? How to build credit from scratch, and fast!

Dubai: Starting out with no credit history can feel like a catch-22. You need credit to get credit, but without a track record, you might struggle to secure loans, rent an apartment, or snag the best interest rates. The good news? Building credit from scratch is absolutely doable—and the sooner you start, the better.

1. Pay your bills on time – every time

Think of your bills as that one friend who always shows up uninvited. You can’t avoid them, so it’s best to handle them responsibly. Paying bills on time isn’t just about dodging late fees—it’s a critical step in building a strong credit profile. Your payment history makes up over a third of your credit score, and even routine bills like utilities or phone payments can impact your credit if reported.

2. Use debt strategically to build credit

If you don’t have a credit card yet, there are still ways to build your credit history. Many banks offer student or starter credit cards with manageable limits. If that's not an option, becoming an authorized user on a family member's credit card can help you piggyback off their good credit. Another great option is a secured credit card, where you deposit a set amount as collateral. Consistent, on-time payments on these cards can lead to better credit offers down the line.

3. Keep your credit utilisation low

When you do get access to credit, avoid maxing it out. Lenders prefer to see you using less than 30% of your available credit—20% is even better if you're just starting. For example, if your credit limit is Dh5,000, aim to keep your balance below Dh1,000. This demonstrates to lenders that you’re not overly reliant on credit, which boosts your score.

4. Monitor your credit report regularly

Keeping an eye on your credit report is crucial. You’re entitled to a free credit report once a year, and reviewing it helps you catch errors or signs of identity theft early. It also keeps you informed about what lenders see when evaluating your creditworthiness.

Getting started: Practical steps

If you're just beginning your credit journey, here are a few simple steps to consider:

- Apply for a secured credit card

- Become an authorised user on a trusted person’s credit card

- Use tools that give you credit for timely bill payments

- Consider a credit-builder loan, which is often easier to qualify for

By taking these proactive steps, you'll be well on your way to establishing a solid credit history. It might seem daunting, but with consistent, smart habits, you’ll build a financial foundation that opens doors to better opportunities in the future.