Don't be fooled by your debit card's appearance. It may look and even swipe (or dip) like a credit card, but your debit card isn't helping you build credit. As such, you're not necessarily going to be able to score an actual credit card just by using yours responsibly.
"Debit cards are essentially plastic checks," Rod Griffin, Experian's director of public education, said in an email. "They are a method to withdraw cash from a checking account. Another way to think of them is that they access your cash assets at the bank. Your credit report only includes information about credit. There is nothing in a credit report about your income, checking accounts, savings accounts or investments, so a debit card doesn’t appear in a credit report."
Remember, credit scores are a primarily a measure of your ability to repay a loan as agreed. They are generally based on five major factors:
- Payment History
- Amounts Currently Owed
- Length of Credit History
- Types of Credit
- Searches for New Credit
Credit cards appear on your credit report because, unlike your debit card account, they are tied a revolving line of credit. Each time you swipe, you are essentially spending your issuer's money — and repaying them later, ideally, at the end of the month when your balance is due.
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How to Get a Credit Card
But you're not necessarily out of luck if you've simply been swiping a debit card for the last few years. There are credit cards designed specifically for someone looking to build or fix their credit. A secured credit card, for instance, requires users to put down a deposit (typically $200 to $300) that acts as their credit line. It allows people to get used to managing revolving credit before they move to a traditional card with a potentially higher credit limit.
Alternately, you could look into student credit cards. Or see if a parent or guardian might add you to their existing credit card account as an authorized user. (Just be sure to ask the issuer if they'll report your authorized activity the three major credit report agencies. Not all do.)
Once you have a payment method in hand, you can build a good credit score by making all your payments and keeping card balances low. The general rule of thumb is to keep the amount of debt you owe below at least 30% and ideally 10% of a card's available limit.
You could also potentially improve your credit scores by checking your credit reports for errors, addressing the specific issues that are dragging your scores down and adding new credit lines organically over time. You can check your progress by viewing your free credit report summary, updated every 14 days, on Credit.com.
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