Whether you’re new to the country or new to navigating personal finance on your own, here’s one thing to add to your to-do list: Applying for a secured credit card. While you may not have used a credit card in the past, having a credit card can be a tool in creating a credit history in the United States. That’s because your credit history encapsulates your financial reputation, showing others whether you’re responsible with money. Your credit history may be a factor in everything from applying for an apartment rental, getting a car loan or being approved for a mortgage. That’s why it’s important to build credit.

No matter how good you may be with money, a potential lender, landlord or even future employer won’t see your budgeting strategy or emergency savings fund. But they may have access to your credit report. And, in order to have a credit report, you need to have credit history.

If you don’t yet have a credit history, or are recovering from a financial misstep, a smart way to build credit can be with a secured credit card. A secured credit card, like the Discover it® Secured card, is one way to build credit while also taking advantage of the rewards and fraud protection offered by unsecured cards.

1. Credit Can Make It Easier to Apply for Housing Rentals

If you’re renting an apartment or house, especially in a competitive and crowded market, your landlord may ask to see your credit score before he or she offers a lease. A good credit score can show that you’re responsible with paying bills on time — very important to a landlord who’s expecting a monthly rent check.

2. Credit Can Help You Secure Loans

Whether it’s a mortgage or car loan, your credit can be one factor in determining how much of a risk you are to the company, and how likely you are to pay back the loan. Building credit with a secured credit card can be a smart step to increasing your credit score and proving you’re a good candidate for a loan.

3. Credit Can Help You Buy a Smartphone

Even if you’re planning to pay for that smartphone with money in your bank account, you still may be subject to a credit check when signing up for a new cell phone plan or contract. That’s because the mobile provider wants to make sure that you will pay your bills on time.

4. Credit Can Help You Rent a Car

When it comes to renting a car, you may need to use a credit card as a form of payment, rather than a debit card or cash. While there are some exceptions, car rental companies do this because — you guessed it — they want to make sure that they are protected if the car gets damaged or you fail to return it. In most cases, it’s possible to rent a car with a secured credit card, depending on your credit limit.

5. Credit Can Help You Be a Competitive Job Applicant

In some cases, employers may check your credit. While they can’t see your credit score, they can see your debt and repayment history. You will receive a written notification that your credit will be checked, and you have the option to deny the request, but having solid credit can give you peace of mind that you’re a competitive candidate for the job.

6. Credit May Help Protect You From Fraud

Using a credit card with retailers, including online retailers, can be a real asset while shopping. The Discover it® Secured card offers fraud protection as well as Social Security alerts, which can help you make sure your identity is protected.

7. Credit May Offer Reward Opportunities

There are certain purchases, like gas and groceries, you’re likely to make no matter what. Doing so on a credit card, like the Discover it® Secured card, may entitle you to credit card rewards for these everyday expenses. For example, the Discover it® Secured card offers 2 percent cash back at gas stations and restaurants for up to $1,000 in combined purchases each quarter, as well as 1 percent cash back on all other purchases.

8. Credit Provides You With Options

Just because you don’t need credit now doesn’t mean you won’t need a credit history in the future. Having solid credit — even if you only use your credit card for one recurring monthly bill — can help you in situations you may encounter down the road, such as applying for a business loan or getting pre-approved for a mortgage. And the best time to build credit is when you don’t need it, assuming you have the time to allow your score to grow and improve.

Credit usage is reported to credit bureaus once a month, which means that several months of responsible credit card usage can help you establish credit history and build your credit score. A secured credit card can not only help you build good financial habits for the future, but a solid credit history can be an important tool to help you accomplish whatever goals you may have.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.