Building Credit: An Easy-to-Follow Guide
Avatar photo Written by Ashton Dobbins

2 min read • Published April 19, 23

Understanding credit is an essential life skill. It may sound complicated, but don’t worry! This easy-to-follow guide will teach you the basics of building credit, why it’s important, and how to avoid common mistakes that could hurt your credit score.

What is Credit?

Credit is a way of showing how trustworthy you are when it comes to borrowing money. Banks and other lenders use your credit score (a number between 300 and 850) to decide if they should lend you money. Your credit score also affects how much a loan will cost you — A.K.A. your interest rate. The higher your score, the more likely you are to get loans and credit cards with lower interest rates.

Everyone’s Worried About Building Credit. But Why?

Good credit is important for many reasons. It can help you get approved for an apartment, a car loan, or even a job. It also makes borrowing money cheaper because you’ll be offered lower, more desirable interest rates. Starting to build your credit now will set you up for financial success in the future.

1. Start with a Bank Account

Opening a bank account is a great first step. This will help you learn how to manage money and show lenders you’re responsible. Make sure to keep track of your spending, save money, and avoid overdraft fees.

2. Apply for a Secured Credit Card

A secured credit card is a great option for building credit. You’ll need to deposit money (usually around $200-$500) as collateral first though. This deposit will be your credit limit until you can be approved for another account with a higher limit. Make sure to use your card responsibly, paying off your balance in full each month to avoid interest charges.

3. Pay Your Bills on Time

One of the most important factors in building credit is making timely payments. Always pay your bills on time, even if it’s just the minimum payment. Late or missed payments can seriously hurt your credit score.

4. Keep Your Credit Utilization Low

Credit utilization is the percentage of your available credit that you’re using. Aim to keep it below 30%. For example, if your credit limit is $500, try not to use more than $150. Keeping your utilization low shows lenders that you’re responsible with your credit.

5. Don’t Apply for Too Much Credit at Once

Applying for multiple credit cards or loans in a short period can negatively affect your credit score. Lenders may see this as a sign of financial trouble. Limit your applications and only apply for credit when you really need it.

6. Monitor Your Credit

Keep an eye on your credit report to ensure all the information is accurate. You can get a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year. If you find any mistakes, contact the credit bureau to have them corrected. Check your bank’s mobile app too. It might give you access to free and unlimited checks!

Play to Win

Building credit is like playing a video game – it takes time and patience. If you follow these tips, you’ll be on your way to a strong credit score and a brighter financial future. Remember, the key to building good credit is being responsible with your money and making smart choices.

An easy way to make sure you don’t pick up debt is to finance your car affordably. At Savings Club, we give you all the resources to do just that. Find out how it works and simulate a deal to see what you think.

Ashton Dobbins


As’s copywriter, Ash takes on various B2B and B2C communication tasks. He went to school for illustration at SCAD. There, he developed a passion for writing and effective storytelling. Ash is fond of journalism and reporting on the facts. He’s interested in new and groundbreaking ideas, especially ones that challenge the norm. Ash still loves to create art outside of work. His cartoons and writing have even been featured in The New Yorker!