Good Ways to Establish Credit

You need to have good credit to survive in today's world. Without it you will find it difficult to buy a new car, a home, or even rent an apartment. Employers, too, often check your credit history, and without good credit you may not be able to get certain jobs. The national average credit score is 692, according to credit-rating service Experian. A score below 620 is considered to be questionable and could cause you problems. Fortunately there are ways you can build solid credit history and earn a good credit score.

Basics

Open checking and savings accounts. Having bank accounts shows that you are responsible and stable. According to MSN Money Central, this is something that is often overlooked when people are trying to establish credit. It is also suggested that you check your credit report. Perhaps you have never had credit, but you need to make sure that your credit report is free of errors. If you find problems with your credit history, immediately report the problem to all three credit bureaus---Experian, Equifax, and Trans Union---and request that the erroneous information be removed.

Credit Cards

"Borrowing" someone else's credit is the fastest way to establish credit, if you can do it. Talk to family members who might be willing to help you. Ask someone with a good credit rating to add you as a joint member on one of their credit-card accounts. This gives an immediate boost to your credit, as once you are added your credit rating will reflect the other person's credit history. Be aware that when you do this you become responsible for all debts on the card, and if for any reason the other person stops making payments that will reflect on your credit as well. You can also get a credit card in your own name. Use it responsibly and make regular payments as required on the account, and it will help to build your credit history. You can apply for a major credit card but, if you don't qualify, the Say Good Credit website suggests that you apply for a prepaid credit card, which is reported to the credit bureaus, or a gasoline company credit card.

Loans

Getting credit cards can help you to establish credit.

MSN Money states on its "establishing credit" Website that if you can qualify for a loan, t will help you a lot with establishing your credit. A small car loan for a used car works well, or a personal loan used for any purpose. If you cannot qualify on your own for the loan, see if a parent or other family member will cosign for you. Having a cosigner will allow you to get a larger loan that you would otherwise. Having a credit history that shows a loan is a good way to establish credit, provided you make payments on time.