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How to build good credit

1. Get a secured credit card.

A secured credit card is just like a “regular,” or unsecured credit card, only you are required to put down a security deposit — typically $200 to $400 — to provide assurance to the creditor that you will repay your debt. Your credit limit is often the amount of your security deposit, or a percentage of it.

Many people confuse a secured credit card with a debit card, however the two are very different. Banks do not report debit card usage to the credit bureaus, as a debit card is not an extension of credit. A debit card is merely a convenient way to access the funds in your bank account.

How responsible you are with a secured credit card will affect your credit scores — both positively and negatively.

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