How to Establish a Credit Line

It seems like an impossible task---establishing credit when you have no credit history. It is difficult, but it can be done, according to Liz Pulliam Weston, personal finance columnist for MSN Money. Weston recommends that you start to establish a line of credit long before you expect to actually need it. The general idea is to create a record that shows how responsible you are with money.

Instructions

1

Start small by having the utilities---electricity, gas, telephone and cable---put in your name. Then make sure you pay the bills on time. Credit reporting agencies are beginning to consider these kinds of records as part of your total financial picture when building your credit report.

2

Open banking accounts, checking and savings, in your name. Make regular deposits and withdrawals to establish a record of how you manage money. The checking account will show potential lenders that you have a means of making regular payments and the savings account will show you're putting something aside for the future.

3

Apply for a gasoline or department store credit card. According to Weston, these are usually easier to obtain than major credit cards such as Visa or MasterCard when you have no credit history.

4

Ask a friend or relative---someone with good credit---to co-sign a loan for you. This means the two of you share responsibility for the loan.

5

Keep your credit in good standing once you have it established. Make payments on time and stay informed about the terms of each credit account you have. Keep your credit cards safe and be careful with receipts and other papers that contain account numbers. Handle any disputes quickly and responsibly. Keep a record of contact information and account numbers for all cards in case they are lost or stolen.

6

Obtain a copy of your credit report if you have one. Check it carefully for mistakes or missing information. You'll want to take steps to correct any mistakes and to add useful information that is missing. For detailed information about how to do this, see the Resources section of this article.