Credit Advice

Establishing credit is often a Catch 22. It is difficult to access credit if you don't have credit history and you can't build a credit history without access to credit.

A credit card is the easiest way to establish your credit history. They are a great starting point since they often have lower credit requirements and are designed to help establish credit. Secured credit cards are another option since they have 100% approval but require a security deposit and can often have high fees.

A second way of establishing credit is to have someone with good credit co-sign a loan for the person without credit. Remember that the co-signer is guaranteeing the loan and will be responsible should the borrower default.

The best answer depends on your situation.  If you are young and heading off to school, a student loan is usually the best way to start establishing credit.  A Federal Loan however will not appear on your report until you begin making payments (9 months after graduation).  A private student loan will work, but the interest payments are not tax deductable.

There are several credit cards available to start you out.  Depending on your score, you may be limited to a secured card.  This is not a bad thing, as the purpose is to develop a credit history.  Open it, use it rarely and keep it open. 

Also, purchasing a car will establish a credit record.  Bear in mind that with no credit history, you will not get a wonderful rate.

Hope this helps