Everyone knows the classic credit score dilemma: You can't apply for a decent credit card from a bank without a good credit score, and you can't establish a good credit score without a credit card, so how do you get over it? Here's How: Apply for a credit card (you'll probably get one with a two to three thousand limit on it) and open an account with enough money to pay for your purchases. Make a few purchases with your new card and pay them off before the limit! If you're parents are willing to help out you can have them transfer a few bills to your name (assuming they pay off their bills immediately), and that should help your score. Want to know more about how credit scores work? In order of importance: Payment History > Debt Usage > Credit Age > Account Mix (the number of accounts you have open, the more the better) and Inquiries (how many credit card applications you make, the less the better). Inquiries and Account Mix usually hold the same importance.
Amen. Building a credit score means that you are trying to show lenders that you are responsible. If you can prove to them you are, then they will loan you money at lower interest rates. This means living in a nicer home, with a nicer car and a nicer life. You can show the banks you are responsible by making responsible credit choices. Only spending money you KNOW you can pay off is responsible. Paying each bill off on time each month is responsible. If you can be responsible, then you get to reap the rewards.
When it comes to building a credit score, I would say the two most significant factors that will determine how lenders see a new borrower are planning and forging good spending habits. It can be difficult enough acquiring a credit card when one has no history. Some people, too many people, actually, have a hard time managing their luxuries, and tend to buy things on a whim rather than thinking through what is necessary with their credit card. They either lose track, or convince themselves that their next paychecks will cover their lavish expenses. They are tools to be used occasionally to build credit and in the event of emergencies, not toys to employ to live above one's normal range of income. Vice versa, if one finds themselves having to use their credit cards too much, they should be reassessing their spending habits.
