(BPT) - At first glance, building credit can seem like a challenge. How can you get the credit you need when you have little or negative credit history to start with? Don't get discouraged, though; there are many ways you can build, rebuild or improve your credit.

Best ways to build credit

• Apply for a secured credit card. A secured credit card works just like an unsecured card, but it's guaranteed upfront by a cash deposit. Making on-time payments and keeping a low credit card balance helps your credit-building.
• Ask a family member to add you as an authorized user on their own credit card. You'll get your own card, but the primary card holder sets the limit on how much you can charge. It can be good for both of you: You'll learn how to manage a credit line, and the account holder can earn rewards on what you buy. Just keep in mind that if the main cardholder misses or makes late payments, it could end up on your credit report.
• Manage loans soundly. A history of on-time payments shows you can responsibly manage your line of credit. Consider having a cosigner on a loan if you aren't able to qualify on your own.

Maintaining good credit habits

• Make payments on time, all the time. Pay credit card companies, utility bills and other accounts on time and always for at least the minimum payment. Consider using calendar reminders and tools like automatic payments and money transfers. Missed payments will lower your credit score quickly, but on-time payments show that you use credit carefully.
• Use different types of accounts. Your credit score improves when you responsibly use more than one type of credit account, including personal loans and installment loans, like a car loan. Be mindful of how many new credit accounts you apply for as too many hard inquiries into your credit file can negatively affect your credit score.
• Use your credit card regularly but keep your utilization low. Your credit utilization ratio is the percentage of your available credit that you actually use. Try not to use more than 30 percent of your available credit. For example, if you have a $1,000 credit limit, try to keep your balance under $300.
• Keep current credit card accounts open. Unless you have a reason to close an account, consider keeping it open even if you don't use it. Keeping an unused account open increases available credit, improving your use ratio.

Get your credit back on track

• Check your credit report for errors and know your credit score. Your credit score is a snapshot of your credit history and shows lenders how responsible you may be as a borrower. Your credit report outlines your credit activity, your credit history and the status of your accounts. It's important to check your credit report every year and dispute any errors. Also consider using a tool like Navy Federal Credit Union's credit score simulator to see how you can affect your score, for good or bad.
• Create a budget or use a budget worksheet comparing your income and expenses. The best way to live within your budget and avoid bad credit is to catch problems early. With a realistic budget and a close eye on your bank account, you can see where you need to change course to get back on track quickly.

The more you practice good credit habits, the more your credit history will improve - helping prepare you for the future financing you may need.

Navy Federal Credit Union is federally insured by NCUA.