Building credit isn’t just about numbers on a report — it’s about unlocking choices. Every financial step you take, from renting an apartment to buying a car, ties back to the story your credit tells. For many, that story is still being written, and knowing why credit matters can make all the difference in how it unfolds.
When you build credit, you’re laying the groundwork for financial freedom. A solid credit profile shows reliability and makes borrowing larger sums of money more realistic. If you're building from scratch or need to rebuild your credit, an established credit score helps connect to better funding for personal or business ventures.
Why Credit Matters
Credit acts as your financial reputation. It helps lenders, landlords, and even some employers understand how you handle obligations. A good credit score reflects consistency and trustworthiness — traits that open doors to better terms and lower interest rates.
According to FICO®, 35% of your score is based on payment history, and 10% comes from credit mix¹. Together, these two factors represent nearly half of your total score. Consistently paying bills on time and showing you can handle different types of accounts — such as credit cards, loans, or a credit builder plan — sends a clear message: you’re dependable.
When credit history is limited, your options can feel limited, too. Lenders might require co-signers, request higher deposits, or offer loans with higher interest rates.
Everyday Benefits of Building Credit
Building credit can directly affect your cost of living. A higher score can mean lower borrowing rates, better insurance premiums, and fewer up-front costs for things like utilities or housing. The Consumer Financial Protection Bureau’s article “Where can I get my credit scores?” explains that lenders, insurers, and even utility companies may review your credit information to decide how much to charge or whether to approve your application.
Imagine two people applying for the same apartment. One has a solid credit history, while the other has no record at all. The first might pay no security deposit, while the second could owe several hundred dollars to move in. Those differences add up — and over time, good credit can help you save hundreds or even thousands of dollars each year.
For readers who want to explore practical strategies that can strengthen these habits, 7 Smart Ways to Build Credit in 2025 offers detailed tips on using credit responsibly and understanding the behaviors that help improve your score over time.
Common Challenges in Building Credit
For many people, the hardest part isn’t managing credit — it’s getting started. Traditional credit options like unsecured credit cards often require good credit to begin with, creating a frustrating cycle. Others may have steady incomes and reliable payment habits that don’t show up on their credit report, such as rent or utility payments.
Life events can also interrupt progress. Missed bills, medical expenses, or periods of unemployment can damage your score, even if you’ve been financially responsible overall. Rebuilding takes time, but the effort pays off as your credit history starts reflecting positive activity again.
How Cheers Helps You Build Credit While You Save
Cheers Credit Builder was created to make credit building simple, safe, and accessible. Instead of using a credit card or traditional loan, you make monthly payments that are securely held in a Certificate of Deposit (CD) through Cheers’s partner bank, Member FDIC.
Each monthly payment activity² is reported to all three major credit bureaus — Equifax, Experian, and TransUnion — helping you build payment history (35% of your score¹) and increase your credit mix (10%¹).
Here’s how it works:
- Choose a monthly plan that fits your budget — starting as low as $24 per month.
- Make your on-time payments each month.
- Cheers reports those payments to the credit bureaus, helping you establish a consistent record.
- At the end of your term, you get your full savings back, minus interest.
Cheers charges only a fixed 12.15% APR, with no setup fees, no membership fees, and no early cancellation penalties³. There’s also no hard credit check required — just a quick identity verification that doesn’t affect your score.
Thanks to accelerated reporting⁴, your account and first payment can be reported to all three credit bureaus within 15 days of opening. That means you start seeing progress faster than you would with other credit builder options.
Why Building Credit Early Matters
Starting early gives your credit history time to grow. Lenders often look at how long you’ve managed credit, so having a longer track record of positive activity helps your score mature naturally. Even small steps today — like setting up a low-cost credit builder account — can pay off years from now when you’re ready for larger goals.
Those with established credit histories tend to have more negotiating power. Whether you’re applying for a mortgage, financing a car, or simply trying to secure a lower interest rate, your credit background becomes a key factor in what opportunities are available to you.
For younger adults or those new to the U.S. financial system, building credit early also means fewer barriers later. A healthy credit report gives you flexibility, choice, and the ability to move through financial milestones without unnecessary stress. If you’re starting your journey and need a step-by-step guide, How to Start Building Credit outlines simple ways to begin establishing credit safely and effectively.
What Happens When Credit Isn’t Built
When credit history is limited or poor, you may face higher costs, fewer approvals, and more restrictions. Even responsible people can be held back by a lack of credit data. For example, someone who always pays rent or utilities on time might still struggle to get a small personal loan if those payments aren’t reported.
Limited credit can also lead to dependency on others — needing a co-signer or paying higher deposits to qualify for services. Over time, these extra costs and constraints can slow financial progress.
By contrast, taking proactive steps to build credit demonstrates control and reliability, two traits that lenders and service providers value most.
Cheers’ Commitment to Financial Progress
Cheers believes everyone deserves a fair chance at financial growth. The platform was designed for accessibility — no hidden fees, no confusing terms, and no unnecessary barriers. By reporting to all three major credit bureaus and holding savings securely in your name, Cheers helps you build confidence while improving your financial standing.
Your payments don’t just create credit history — they build habits that lead to independence. With each on-time payment, you’re moving closer to financial freedom.
The Bottom Line
Credit impacts nearly every aspect of your financial life. It can determine where you live, what you drive, and how much you pay in interest over time. Building and maintaining good credit is less about luck and more about creating consistent, responsible habits.
Cheers Credit Builder makes that process easier by combining credit building with saving — helping you establish payment history, grow your credit mix, and gain access to better financial opportunities, all without hidden fees or hard credit checks.
Building credit today sets the stage for tomorrow’s stability, opportunity, and peace of mind.
This content is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor or tax professional before making any financial decisions.
(The opinions expressed in this article are the author’s own and do not reflect the view of Sunrise Banks.)
References
- myFICO – https://www.myfico.com/credit-education/whats-in-your-credit-score
- Consumer Financial Protection Bureau – https://www.consumerfinance.gov/ask-cfpb/where-can-i-get-my-credit-scores-en-1561/
¹ FICO® Credit Factors:
According to FICO®, 35% of your credit score is based on payment history, and 10% is based on credit mix. Cheers reports every payment and adds a secured installment loan to your profile.
Source: myFICO: https://www.myfico.com/credit-education/whats-in-your-credit-score
² Payment activity:
All payment activity is reported to the credit bureaus. On-time payments may help build your credit, while late or missed payments may negatively impact it. Results are not guaranteed and depend on your individual financial behavior and credit profile.
³ No Hidden Fees:
There are no application fees, maintenance fees, or early cancellation penalties.
⁴ Accelerated Reporting:
Accelerated reporting applies to the opening of your account, plus the first payment. Credit bureau reporting occurs monthly thereafter.
Cheers is a financial technology company and not a bank.
Banking services are provided by Sunrise Banks N.A. Your funds are FDIC insured up to $250,000 through Sunrise Banks, N.A., Member FDIC. Results are not guaranteed. Improvement in your credit score is dependent on your specific situation and financial behavior. Failure to make monthly minimum payments by the payment due date each month may result in delinquent payment reporting to credit bureaus, which may negatively impact your credit score. This product will not remove negative credit history from your credit report. All loans are subject to approval.
Eligibility Criteria:
Must be at least 18 years old, have a valid U.S. bank account, and a Social Security Number. All accounts are subject to identity verification and consumer report review by the issuing bank, Sunrise Banks N.A., Member FDIC.
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