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First Steps to Building Credit

1. Get a free copy of your credit report from to make sure that there are no errors or inconsistencies. is the official site to get your free annual credit reports. This right is guaranteed by Federal law. Don't be fooled by look-alike sites or sites that charge you money for a monthly service in exchange for a credit report. You can be sure that you are on the right site if you type in your browser address line. 

2. If your reports look confusing or if you don’t feel comfortable reading them on your own, find a financial counselor to help you. Free financial counselors accredited by the National Foundation for Credit Counseling are available across the state. Use the site locator to find a counselor near you. 

3. A secured credit card is a sure fire way to build credit. A Secured Credit Card is a type of credit card that is backed by a savings account used as collateral on the credit available with the card. Money is deposited and held in the account backing the card. The limit will be based on both your previous credit history and the amount deposited in the account. The limit as a percent of the deposit tends to range between 50% and 100%. (Investopia)

Finding a Secured Credit Card is easy. First check with your bank or credit union to find out if the institution offers a secured credit card. Inquire about the terms of the card like what is the interest rate, which credit bureaus does it report to and how often does the card report to the credit bureaus. You may also want inquire about any applicable fees such as annual, late payment or over the limit fees. If your bank or credit union doesn’t offer a secured credit card you can search on to find another provider.

You will need to have a chunk of money, usually ranging $200+, saved to deposit as the collateral for the card.
How can you be successful at building credit with a Secured Credit Card? Think of building credit with a secured credit card as a game.
Rules of the game:

• never carry a balance month to month
• pay it on time or early by setting up auto payment from your checking or savings account
• do not charge anything over 30% of the credit limit

It usually takes six months to one year for your score to rise as long as there isn’t any new negative information reported.


Shawna Thompson
Extension Educator, Financial Capability
(952) 466-5317
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