“No credit? Bad credit? Repossession? No Problem. Come on down!”

I hate to burst the bubble, but these guys at the shady car dealerships don’t have it right. Your credit history can determine everything: whether you get a good job, a decent apartment, a deal on your cell phone or reasonable rates on your insurance. Not to employ scare tactics, but a late payment, maxing out your credit cards or defaulting on a loan can haunt you for years. Building good credit in a safe way is a task that may take some time. There are steps involved too.

If you don’t already have one, establish a savings account. Lenders see this as a sign of stability. Starting out without a credit history, you may need to piggy back off someone else’s credit. Usually, parents or spouses are the co-signer. Remember any delinquencies on the account are going to be adversely affecting them and not you.

They used to tell college kids to stay away from those booths on campus. Well all saw them, the ones offering credit card to all. I signed up for a few just for the free t-shirt and then never used them or quickly cancelled them. This is not exactly a good practice. But college is a time to build credit. So don’t avoid the booths. Just find yourself a card with a low APR and make your payments on time. Pay it off every month if you can. The credit card companies call these people, the ones who pay in full every month, “deadbeats”. Ironic, right? But I digress. Secured credit cards are always a good start. You can give yourself a limit in the amount of your deposit. So you’ll never have issues. Also, carrying a balance won’t hurt your credit and not carrying one doesn’t either. Just pay on time.

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