Read A How-To for Recent Graduates on Building Credit additional

Are you a recent high school or college graduate? If so, you probably don't have much of a credit history, but credit is something you will soon be very concerned about.

Why? In the not too distant future, you'll probably want to buy a car or your first home. A better credit score means that you will save money with lower interest rates on loans. Even sooner than that, when you look to rent your first place, landlords may run credit checks before renting to you to ensure that you are financially responsible. When it comes time to find a job, know that many employers pull prospective employees' credit reports to determine an applicants' financial responsibility.

So now is the time to start thinking about building your credit. But how do you do that?

Student Loans - Federal student loans are based on need and not one's credit history, so they are easy to obtain. If you pay back your students loans promptly after graduation, they become a great way to build your credit history. It is very important that you make your payments on time. Even one late payment can negatively impact your credit rating. If you are having trouble making your payments, contact your lender to establish alternative repayment options so that you avoid missing a payment.

Credit Card - Using a credit card wisely (using it just a little each month and paying off your balance, in full and on time every month) is a great way to quickly build your credit. Be careful not to go overboard with credit cards. It can be easy to do this, so instead make it a habit to use cash for the majority of your purchases.

Pay Bills on Time - This is very important. Keep a calendar of due dates on your bills and pay them as soon as possible. You will have to keep a budget and stick to it each month, but if you are trying to build your credit rating, a late payment is not an option.

Check your credit report - You are entitled to three free credit reports each year, one from each major credit reporting agency (Equifax, Experian and Transunion); so you can get a report every four months or so. Monitoring your credit will help you see how your actions impact your report and will help you spot and repair mistakes or identity theft before serious damage occurs.

How To Build Good Credit
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A How-To for Recent Graduates on Building Credit