How to Start Building Credit in 2026 (A Queer Person's Guide to Credit Scores)

Written By Elliot Bruhl

Let me tell you about the most embarrassing financial mistake I've ever made — and I'm a financial coach.

I opened a Kohl's credit card in college because they offered me a discount at the register and told me I could pay it off right there on the spot. 


I didn’t shop at Kohl's enough to have any business owning a Kohl’s credit card, but when the cashier told me how much money I could save that day (less than $100 but that still felt like a lot for just entering my information) I took it, and I made sure to be a smart credit card user. I only used that card at Kohl’s and paid off the balance right away. I did that for years. Small balance, paid at the counter, no problem.

Then, Kohl's switched credit card providers. They mailed me a new card. I didn't set up an online account. I didn't add it to my wallet. And several months later, I bought a suit for about $300 at Kohl's. I had a few fancy events to attend, and I had a little extra money, and the cashier convinced me to put it on my Kohl's card using my phone number, like I always had.

Except this time, I couldn't pay at the counter. She told me not to worry because  it would be easy to pay online when I got home.

I forgot.

I didn't realize my mistake until my credit score dropped by 100 points and I finally opened what I'd been assuming was spam mail. It was actually the statement from my Kohl's card, with two missed payments and high interest accruing on $300 from my suit.

By the time I called and paid it off, I had paid almost double the cost of the suit in interest and fees. I got one of the two late fees waived just by asking nicely. The other one stuck.

I tell you this because I am not the only one who has been there. And, because the shame of that moment almost kept me from fixing it. I wanted to bury my head and pretend it hadn't happened to me. After all, I had had enough money in my bank account to pay for that suit in cash. This wasn't a spending outside of my means story. It was a system failure story. And it cost me real money and months of credit score recovery.

Credit is a tool. A powerful one. And like any powerful tool, it can hurt you if you're not paying attention.

This video is for my fellow queer and trans people who are looking to figure out how credit scores work, how to build credit, or how to keep your credit score stable if you decide to legally change your name.

What a Credit Score Actually Is (And Why It Matters)

Your credit score is a three-digit number — typically between 300 and 850 — that lenders use to decide how likely you are to repay what you borrow. The higher your score, the more trust lenders extend to you, and the better the terms you get on loans, credit cards, and interest rates.

Here's the general breakdown:

  • 800–850: Exceptional

  • 740–799: Very Good

  • 670–739: Good (this is where most lenders will approve you without issue)

  • 580–669: Fair

  • Below 580: Poor

Your score is calculated based on five factors, roughly in order of importance:

  1. Payment history (35%) — Do you pay on time? This is the biggest one.

  2. Credit utilization (30%) — How much of your available credit are you using? Lower is better. Under 30% is a common benchmark; under 10% is ideal.

  3. Length of credit history (15%) — How long have your accounts been open?

  4. Credit mix (10%) — Do you have different types of credit (cards, loans, etc.)?

  5. New credit inquiries (10%) — How often are you applying for new credit?

My Credit Score Story (How I Built Mine — and the Mistake That Cost Me)

My parents understood credit and were responsible borrowers. In college, they added me as an authorized user on their account so I could start building credit history through gas purchases that they made sure I paid off on time every month. I didn't have to do anything. My credit history just started accumulating.

After I was cut off financially when I came out, I opened my own credit card and started monitoring my score regularly. I learned a lot of what not to do by watching my chosen-family sister navigate rebuilding her credit and tell me stories of what she wished she’d known sooner. I watched, I learned, and I was careful.

Over time I learned that requesting credit limit increases would lower my utilization rate and boost my score — so I did that strategically. I also opened new accounts roughly twice a year to maintain credit-seeking activity. I put most of my regular expenses on credit cards, paid them in full every month, and never carried a balance.

And then came the Kohl's suit. The 100-point drop. The shame spiral that almost kept me from fixing it.

The thing that is keeping my score from crossing 680 at the time of writing this blog post is simply how recent that missed payment is (but by the time I’m actually publishing this, it’s already up to 733). Credit bureaus weigh recent history heavily. But I know with certainty that with time and continued responsible use my score will climb back to the high 700s where it was before. The damage is temporary. The behavior is what lasts.


How to Build Credit When You're Starting From Zero

A lot of queer people I work with have limited credit history — especially those who were cut off by family before they could establish a credit foundation, or who avoided credit entirely because the whole system felt unsafe.

Here are the most accessible paths forward:

If it is an option for you, become an authorized user on someone else's account. This is exactly what I did for my chosen-family brother, who needed to establish credit to qualify for an apartment. My partner and I added him to our account as an authorized user. We occasionally put small bills on his card and pay them in full — which is what we do anyway. He benefits from our good payment history without having to navigate his own card yet.

Important note: I did my research before doing this. When you add someone as an authorized user, your credit scores are not permanently intertwined. The lender reports to the credit bureau on their behalf only while they're on the account. The moment you remove them, the connection ends cleanly. I can remove him at any point without permanent impact to either of our scores — which gave me the peace of mind to offer to do this for him.

If you don't have a trusted person to do this for you, it might be worth asking in queer community spaces. This is a form of financial mutual aid, and it works. 

Another good first step is to get a secured credit card. A secured card requires a deposit (often $200–$500) that becomes your credit limit. You use it like a regular card, pay it on time, and build history. After 6–12 months of responsible use, many secured cards graduate to unsecured cards and return your deposit.

Another option is to use a credit-builder loan. Some credit unions and community banks offer credit-builder loans specifically designed to establish or repair credit. You make monthly payments, and the bank reports them to the credit bureaus. At the end of the term, you get the money back. The credit history is the product.

The Rules That Actually Matter

After years of watching people navigate this, including myself, here's what I've landed on:

Pay on time, every time. Payment history is 35% of your score. One missed payment can drop your score significantly and stays on your report for seven years, though its impact diminishes over time.

Keep utilization low. If you have a $5,000 credit limit, try to keep your balance under $500–$1,500. If you can get a credit limit increase, take it — your utilization goes down without you spending less. I've asked for limit increases strategically for years.

Start early and keep accounts open. Length of credit history matters. If you can open a credit card responsibly in your late teens or early 20s and keep it open even when you don't use it much, you're building a long credit history that will serve you later. This is why I don't recommend closing old cards unless they carry an annual fee you can't justify - even then, you can often downgrade these cards in order to keep them open without continuing to pay the annual fee. This is also why it can be helpful to get added as an authorized user on someone else’s account to start building your credit history.

Don't open store cards just for the discount. I say, speaking from experience. The discount feels good at the register. The forgotten balance does not. Another thing to consider is that most new cards offer a $200-$300 sign on bonus. If that store isn’t giving you $300 to sign up, then you could absolutely be taking advantage of much better offers elsewhere.

Credit: Tool or Trap?

Both. Entirely depending on how you use it.

Used well, credit is free money: welcome bonuses, cashback rewards, purchase protections, travel benefits. The Amex Blue Cash Preferred card I used to fund my top surgery paid me a $200 welcome bonus that more than covered the credit card surcharge my surgeon charged. I earned cashback on the purchase. And I paid zero interest because I paid it off before the 0% introductory period ended.

Used carelessly (especially if you have ADHD, untreated bipolar disorder, or any mental health challenge that affects impulse control) credit can be a trap that compounds faster than you realize. The key is to be educated about the traps so you can navigate around them and get to the benefits.

I think of it this way: a knife is also a tool that can cut you. That doesn't mean you don't use knives. It means you pay attention.

The Queer- and Trans-Specific Credit Challenges Nobody Talks About

This section is for my trans and nonbinary readers specifically, because there is a significant credit issue that affects our community that most mainstream personal finance content ignores entirely.

Legal name changes can destroy your credit history.

When a transgender or nonbinary person legally changes their name and updates it with creditors, credit bureaus can create an entirely separate credit file under the new name — effectively fragmenting your credit history into two or more unconnected files. The result: your credit score can drop by 100 points or more, seemingly out of nowhere, even if you've done everything right.

There's more: credit reports that still include a deadname can out trans people to landlords, employers, and lenders when they apply for credit, jobs, or housing — exposing them to discrimination and harassment.

In 2022, Equity California and over 140 other organizations sent a letter to the “Big Three” credit bureaus: Equifax, Experian, and TransUnion, urging them to fix these problems.

Legislation to fix this — the Name Accuracy in Credit Reporting Act — was introduced in Congress in 2023. It was referred to the Senate Banking, Housing, and Urban Affairs Committee on July 27, 2023, and 10 Senators, including nine Democrats and one independent, Bernie Sanders, cosponsored the bill, but it never passed.

Currently, all of the Big Three credit bureaus have guidance on their websites for trans people who are looking to update their names on their credit reports. I’ll link each of their help articles below, but here’s a quick overview of their current guidance:

First, you need to complete the legal name change process in your state. This process will look different depending on where you live. For me, I had to get a court order to get my name changed, and then I began updating my legal documents, starting with my birth certificate.

Once that’s done, you’ll need to notify your bank or other financial institutions about your name change. Then you’ll need to contact all three of the nationwide credit reporting agencies: Equifax, Experian, and TransUnion. The guides linked below will walk you through the steps for each one.

If you’re a trans person who’s gone through this process, let me know in the comments how it went. Did you have any problems? Did you notice your credit score take a hit when you changed your name? Let me know also any extra tips you have for navigating this process.

Your Next Step

Check your credit score for free today. Credit Karma, your bank's app, or many credit cards offer this. Just knowing your number is step one.

If you want to go deeper, build a strategy, and actually make your credit work for you rather than against you, that's exactly the kind of work I do with clients in the Out & Invested Roadmap.

Learn more about the Out & Invested Roadmap →

Elliot Bruhl (he/they) is a certified professional coach and founder of Out & Invested. Learn more at outandinvested.com.

Helpful Links:


Sources:

Elliot Bruhl
Next

The Queer Wealth Gap is Worse Than You Thought - Here's What You Can Do About It