<prompt> Human: One of the most commonly asked questions here is How do I start building credit?. Obviously, a solid, long-term history of on-time payments generally yields the best credit score. But getting your foot in the door can sometimes be troublesome without lenders willing to take a chance on you.Below, well examine the best way to get your file started up, given different scenarios. Your mileage may vary, but hopefully this post will give you the resources to assist you in getting a solid base of credit history, as well as good financial habits.Step 0: Assess your financial situation.Your financial health comes first. Your credit score is not everything; it is only a supplement to your financial activity. Your first priority is always going to be ensuring that you are already practicing good financial habits.This start-up kit will contain recommendations to obtain a credit card. While there are benefits to credit cards, there are also severe dangers. I do not recommend this tutorial to anyone who: Has no emergency fund. Plans on living beyond hisher means. Does not have an income. Has spending habits that have not been dealt with. Does not have a budget.If you do not fit into any of the bullet points above, then youre likely safe to go on to the next step.Step 1: Pick a Card.See the scenarios below and pick one that best fits your situation. When you are done finding a card, go to Step 2. Do not skip Step 2.For your first credit card, a general note is to avoid cards that have an annual fee. You do not need to pay a dime in interest or fees to obtain a fantastic credit score.I am a student or graduate who has student loans, and is looking to build credit.Since you already have student loans, you likely already have a decent but short length of history on your file. In this case, I would look at what is generally referred to as a starter card. A couple of the most recommended in this situation are the Chase Freedom and the Discover It There is also the CapitalOne Quicksilver Do not confuse this with the Quicksilver One, which has an annual fee.I would also take a look at this list for other suggestions. You may also want to look at the bank where you currently have a deposit account; you are more likely to be approved for a credit card if youre in a position where the institution can clearly gauge your financial health.If you are a student who cannot get approved for a starter card, there are still plenty of student cards that are available for your situation.I am a student who does not have student loans, but I am looking to build credit.This means your file is completely empty. But since you are a student, you have plenty of financial institutions willing to take a chance on you. I would take a look at possible student cards to get started.I am not a student, but I also have no payment history. Where can I start?You may want to look at a starter card first, and see if you can get approved anyway. Once again, there are suggestions on Nerdwallet Many of the options listed above Freedom, It, and Quicksilver are good at taking chances on thin or new files.Again: You may also want to look at the bank where you currently have a deposit account; you are more likely to be approved for a credit card if youre in a position where the institution can clearly gauge your financial health.Try for a few starter cards first. If you are having bad luck, see below:I cant get approved for any cards listed above. What do I do?Since youve exhausted all of the above options, you can try to get approved for a secured card. This is a card where you lay down a security deposit, which becomes your credit limit.Unfortunately, secured cards tend to have annual fees. The only one that doesnt as of this writing is the US Bank Harley-Davidson and some secured cards from local credit unions. If this doesnt work out, you may want to go to your bank or local credit union to explore more options.Usually, within 6-12 months of on-time payments, you can call your bank and request to move from a secured card to an unsecured card, or do a product change to a different card entirely.I cant even get approved for a secured credit card. What now?If this is the case, its likely something is keeping your credit file back. Do you have an account in collections? Could there be a mistake on your credit file which happens frequently? At this point, please check to pull a report. You may or may not have to do a mail-in request to obtain your report. If you need further direction or support, you can always ask for someIf there are any inaccurate items, and they have been disputed successfully, you may wish to go back through your denials. Call the bank and ask them to reconsider your application.Step 2: Understand The Rules for Using your Card:1. Use your card only for planned expenses.2. Do not change your spending habits simply because you are using credit instead of cash. Rewards are nice, but spending a dollar to earn a penny is foolish.3. Always pay your statement balance in full by the due date. No exceptions.Using the rules above, a typical billing cycle will look like this:1. You charge a planned expense, sticking to your budget and not changing your spending habits.2. The bank will sum up all of the activity in 1, and will send you a statement, or a summary of the information it believes to be correct.3. Review your statement for errors, and pay your statement in full by the due date. As long as your statement is paid in full, you will not pay interest. Any charges that you made that were not listed on the current statement will appear on the next one.4. Go back to 1.If this seems confusing to you, consider an analogy to your Electric bill. Your institution monitors your charges pun intended, and sends you your bill. As long as you pay your bill in full, there are no interest or late fees.Frequently Asked QuestionsDoes paying rent or bills help my credit score?No, unfortunately. Bills and rent are not tradelines, or lines of credit. However, if you dont pay, it will affect your score negatively.Should I care about APR?No. If you are paying your credit card statement in full every month, your effective APR is 0.I heard you should carry a balance and pay interest on your credit card to build trust with the bank. Is this true?I tackled this one already.For my first card, why should I avoid an annual fee?Your first credit cards history is one of the more important factors in your FICO score. Closing your first credit account has been known to be detrimental to your credit file moreso than canceling any other card you may acquire later. This means if your first credit card has an annual fee, and youre looking to open up a loan or mortgage, you may have your credit score held hostage by it.There are ways out of an annual fee card that wont affect your history, however; the most common is calling the institution for a product change to a non-fee card. You can also call yearly and request to waive the fee. These, however, exist as options for most consumers, and are not guaranteed.Should I take out a loan to improve my credit history?Never. You do not need to pay a dime in interest to help your credit. You should treat these starter loans as if they were scams.Why are there so many links to Nerdwallet? Are you a shill?Nerdwallet is commonly recommended on rpersonalfinance. It has also been recommended by CNN and the New York Times. I recommended it as well, because it: Aids in decision making while not giving a sales pitch. The information within is accurate and does not seem to be biased.I am also open to sites that contain the criteria listed above. I am not paid or affiliated with Nerdwallet in any way.Do I need to use a certain percentage of my credit limit a month?There is only one credit utilization adage that matters: the lower, the better. Some of the best scores only have utilization between 1 and 9 rounded up.Utilization does not have any memory, so its pointless to force yourself to spend above or below a certain amount to get a higher score in a month that youre not applying for new credit. In addition to this, your credit score will not factor the amounts paid on revolving accounts; the only thing that matters from month-to-month is whether you paid on time.Simply focus on sticking to only regular expenses, and pay off your statement in full every month.I am looking for more information on credit andor FICO scoring. Do you have any resources?It just so happens that I have a full write-up on FICO scoring that you may be interested in. I would also check out the links in the sidebar and the FAQ.  <response>: Just FYI. Where I work, a small credit union, our secured card also has no annual fee, but we are not going to be listed on the websites. So it pays to call around to local credit unions and community banks too. 