Establish Good Credit

• 1). Open a checking and/or savings account(s) in your name, advises the Federal Reserve Bank of San Francisco. Over time, your history with your bank--your deposits, withdrawals and transfers--will prove that you can manage your own money.
  
  
• 2). Take out a small loan at your bank that you know you can pay back to build credit history. You may wish to secure the loan with the funds you have in your savings account. Alternately, you can ask a friend or relative to be a co-signor on the loan (as long as he or she has good credit). But beware, the Federal Reserve Bank of San Francisco notes that you will have to pay interest on the loan.
  
  
• 3). Apply for a secured credit card (also known as a prepaid credit card), advises the Federal Trade Commission. This type of credit card issuer requires you to first establish a savings account. You are then permitted to use a certain percentage of your deposit (between 50 percent and 100 percent) as a line of credit when making purchases on the card.
  
  
• 4). Before you apply for a major credit card, get a department store or gasoline credit card first, advises the Federal Reserve Bank of San Francisco, as these are often easier to obtain. But when you apply for these cards, make sure you understand the creditor's terms, such as the interest charges and if there is an annual fee associated with being a cardholder.