PowerShell is often used to access data from systems or apps that require authentication. Authentication requires username and password. you don't want to store the password in the PowerShell script itself.
The better way is to store the password as SecureString in a configuration file and use that to access the data / app.
To generate the configuration file:
> Read-Host -AsSecureString | ConvertFrom-SecureString | Out-File C:\Securestring.txt
To consume the configuration file:
> $pass = Get-Content C:\Securestring.txt | ConvertTo-SecureString
To convert it as credential object:
> $cred= New-Object -TypeName System.Management.Automation.PSCredential -ArgumentList "username",$pass