Building Good Credit

By using a secured credit card, which uses money you place in a security deposit account as collateral, you can begin building your credit.

So how does it work?

You give the bank a specified amount of money and they put your money in a Certificate of Deposit (CD). While the money is being held in the bank, it accrues interest. The bank will then give you a credit card to use. This is for people with little to no credit. The next step is to make purchases with the card utilizing the 30% credit card rule. Therefore, you have to make strategic purchases. You always want to keep a balance to effectively build your credit. After a year or 18 months, you get the money back with interest.