Which type of account is recommended for starting to build credit?

Starting to build credit is best achieved through a credit card account. Credit cards allow individuals to borrow money up to a certain credit limit and repay it over time, which is essential for establishing a credit history. When you use a credit card responsibly—by making purchases and paying off the balance on time—you demonstrate your ability to manage debt, which positively influences your credit score.

Checking accounts, while important for managing everyday finances, do not contribute to building credit as they track deposits and withdrawals but do not involve borrowing or repayment activities. Savings accounts serve a similar purpose, allowing you to earn interest on your deposits, but like checking accounts, they do not impact your credit history. Brokerage accounts are used for investing in stocks and securities, which is unrelated to credit building.

In essence, to build credit, engaging with a credit card account is essential because it establishes a track record of borrowing and repaying, which is the foundation of a strong credit profile.