Establishing Good Credit
Establishing good credit is a rite of passage for most people. In order to go on to do things that most adults in life need to do – buy a car, rent an apartment, get a mortgage – you will need to have established good credit.
When you are first starting out, one of the obstacles you may find to establishing good credit in your name is the fact that you have an unproven track record. With no existing credit, a lender has no record of whether or not you are a good risk. In this case, you may want to speak with the bank where you maintain your regular bank accounts. Most banks or credit unions can set you up with a secured credit card. A secured credit card requires you to deposit a certain amount of money into an account, and your credit limit will be up to that amount. Unlike a debit card, you will be required to pay on your balance each month rather than the balance being deducted from this established account.
You can consider getting a co-signer for a loan to help you establish credit. It may take you longer to establish yourself this way, because the initial leap of faith in giving you the credit is really because of the co-signer. You will also have to be diligent at paying off the loan each month because any delinquency will affect your co-signer as well as yourself.
Apply for credit cards that are typically easier to get. Gas station credit cards are easier to qualify for, especially since the initial line of credit is generally small and the chance of you running up a large account balance is low. You might also find that qualifying for credit at some retail stores is easier than qualifying for a major credit card.
In general, if a major lender will approve you for a line of credit, it is to your benefit to accept the credit. Make sure it is an agency that will report your prompt payments so that when you apply for credit in the future, you will have a history of good credit on which another agency can base a decision.
Source – Your Guide to Banking and Loans