Establishing credit is like a journey, you will have to start somewhere to do this. A smart way to begin building a good name and credit reputation is by starting at a young age if you want to enjoy the benefits of qualifying for low interest rates or for other types of loans later in life. But where to begin?
To establish credit for the first time, you can probably start by opening a savings or checking account at a local bank. Make sure to keep your account active and in good standing because lenders can use this information to determine whether to extend you credit or not.
A secured credit card is another way to do this. A secured credit card is a card issued by a bank; and it works like a prepaid card where your credit limit is equal to the deposit you made in the bank. The good thing about this type of credit , as a young adult, this is a great way for you to learn good credit and spending behavior.
You might also want to consider getting a gas card or a store card, where the requirements needed are less complicated than applying for the regular credit card and start building your credit from here.
Establishing good credit is only the tip of the iceberg. The challenge is how to consistently keep your credit record clean. Because screwing up your credit history means screwing up your credit score and that's the last thing you want to do.