How to Establish a Credit File

Opening credit accounts is relatively easy, but establishing good credit isn't. As Shakespeare said, "Aye--there's the rub." It's easy to feel free about spending when you have a few credit cards in you wallet, so treat your credit with caution, and avoid too much debt. Shakespeare also said, "neither a borrower, nor a lender be," but today, if you don't borrow, you can't establish credit. And without a healthy credit file, modern life is challenging. You can't even rent a car without a credit card, let alone buy a house. But tread carefully into the waters of spending into debt.

Instructions

1

Open a bank or credit union account, if you don't have one. Credit card companies often ask for your account number when you apply for a card, so you will need a bank account.

2

Apply for a credit card at the bank or credit union at which you have an account, as recommended by finance writer Amy Fontinelle in an article on Forbes' Investopedia. Your own financial institution will be more likely to trust you than a company that has no connection to you. They may ask you to deposit a sum of money in a savings account, and then give you a credit card with a limit up to the amount on deposit, or they may give you a credit card without asking you to do that.

3

Make a "spending plan," advises Bankrate.com's Steve Bucci. This will help you to budget so that you don't overspend with your new credit card.

4

Make your credit card payment every month on time. If you never spend more than you can pay off at once, you will avoid getting into debt and establish good credit at the same time. To ensure that you always pay at least the minimum or another sum every month on time, arrange for the payment to be taken from your checking or savings account automatically and concurrently with your paychecks.

5

Open a second credit card account after you have established good credit with your first card. You can get a regular credit card or open a department store account to do so. You want two credit accounts because some day when you are ready to make a big purchase, the lender will probably want to see more than one account.