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To begin building your credit history:

  1. Start by opening an account at your favorite financial institution.  While it won't appear on your credit report, you may be asked to provide account numbers when completing credit applications. 

  2. Next, apply for a credit card. It may be easier for you to be approved for a department store or gas credit card before applying for other types of credit cards, such as a VISA or MasterCard. 

  3. Now, begin using your credit card for purchases.  Be certain to pay off the balance due each month.  To make sure you can pay off the balance, consider keeping a record of your credit purchases, just as you do a check register for your checking account.  If you can pay off the entire balance, be sure to pay the minimum payment on time each month. 

  4. If you have a hard time qualifying for a credit card, consider applying for a secured card.  With a secured card, you will have a credit limit based on the amount of money you will have on deposit in a savings account.  The card is used the same as any other credit card. 

  5. You might want to apply for a secured loan from your financial institution, secured by the money you have on deposit or in the case of an auto loan, the car itself. 

  6. You can ask a friend or relative with good credit to co-sign a loan which makes him or her liable for the loan with you. 

  7. If you are denied credit, find out why.  It could be your income, job, or credit history.  You can also request a free copy of your credit report.  Be sure to check it for accuracy and report any corrections that need to be made.

As you're building your credit, have patience.  You're establishing a record of consistent payments that shows you are credit worthy.