10 months ago
Last edited at 8:49AM on 2/12/2013
Get a credit card specifically for building credit. Personally I got the Capital One Journey card for students. I charge to it daily - gas, groceries, dining out, even a $3 coffee - but then pay it off completely every paycheck (twice a month.) That way the balance stays really low. They don't report based on how much activity, but just on your payment history and what your "utilization rate" is. The credit bureaus will get a report saying if you paid on time, and how much of your credit card limit is used up. So you want to always pay on time, and always have a low utilization rate (20% or lower)... the lower the better.
Student loans also get reported to credit agencies. So paying those on time helps build good credit too.
Also, I used this to buy my car: a secured loan with your bank. Check that your bank will report the loan to credit agencies first, but if you have a balance of, say, $3000 in your savings, get a $3000 loan which is "secured" against your savings. Then set up auto payments, and put a little extra money in your savings account each month. A no-hassle way to build a credit history.
Get a cellphone and pay your bill on time. Listen, you don't want a credit card, all it does is get you into debt. Open a bank account and use a debit card. If you can't afford it then you don't need it. Only buy what you can afford.
You build credit by proving you are credit worthy. If you have a credit card, make sure it gets paid in full every month. If you have a car loan, make sure the payments are made like clockwork. Any bill you have, again make sure it gets paid on time. That proof builds up over time and you build your credit rating.