How to Build Credit Without Getting Into Trouble

Build your credit safely without falling into unnecessary debt

Photo by Danist Soh on Unsplash

Building credit is one of the most important steps in managing your money as an adult. Good credit helps you get approved for loans, secure low interest rates, rent an apartment, and sometimes even land a job. But if you’re not careful, it’s easy to fall into debt. The following breaks down how to build credit safely, step by step.

Start Small with a Secured Credit Card

If you’re new to credit, a secured credit card is a great place to begin. You pay a deposit upfront, usually around $200 to $500, and that amount becomes your credit limit. The card works like a regular credit card, but the deposit protects the lender in case you don’t pay your bill.

Use the card for small purchases you can afford, like gas or groceries. Then pay the full balance off every month. This shows lenders that you’re responsible and can manage your money. After a few months of on-time payments, your credit score will begin to rise.

Never Spend More Than You Can Pay Back

It’s tempting to think of a credit card as free money, but it’s not. Every dollar you spend is a dollar you’ll have to repay. One smart rule to follow is the 30 percent rule. Try to use no…