A first step toward building credit

Building or rebuilding credit takes time. A card is one type of account that can contribute to your credit history when its activity is reported to credit bureaus.

Start by checking reporting practices and the total cost of keeping the account. A label such as “credit building” is not a promise of approval or a particular score change. Your broader credit history and the scoring model also matter.

A secured credit card requires a security deposit. Read the terms for the amount required, how the credit limit is set, and how the deposit can be returned.

The deposit does not replace your monthly payments. Make sure you can manage both the upfront amount and the purchases you expect to repay. Ask what happens to the deposit if the account is closed or changed to another type of account.

Review the pricing table for annual, monthly, setup, and transaction fees, plus the ongoing APR. Some costs may apply even if you use the account very little.

Ask which credit bureaus receive account activity. Also check whether there are account reviews or opportunities to move to a different product. Read the criteria carefully; a review does not guarantee an upgrade.

• What money is required upfront?
• Which costs repeat each month or year?
• How is account activity reported?
• What are the deposit-return and account-review terms?

Paying on time and keeping balances low compared with available credit are useful habits. You do not need to carry a balance or pay interest to build a credit history.

Payment reminders can help you keep track of due dates. If you use automatic payments, still check statements and keep enough money available for the payment.

Apply only for credit you need, and review your credit reports for errors. These are general habits, not a forecast of how quickly a score will change.

Use these questions to compare the account terms. A deposit or a credit-building label does not guarantee acceptance or a particular score change.

Read the provider’s eligibility requirements and the current agreement. Student status, a deposit, or a product’s marketing language does not guarantee approval.

Choose an amount of spending you can manage within your budget. If the costs or deposit would be difficult to afford, take time to understand the terms before submitting an application. Browsing educational categories on this website does not involve a credit check.