Start your credit history by having a checking account and savings account with a local bank.
DO NOT OVER DRAW THAT ACCOUNT!
That overdraft will go on your credit report with the larger, conglomerate banks, but smaller, home town banks & savings & loan banks don't often report it.
Keep at least $100 in that account no matter what!
Most of the time, if your balance doesn't drop below $100, there is no monthly service fee, and that alone saves you $7 to $25 a month in service fees,
Plus it will raise your in bank credit rating considerably...
Once you have an established account with the bank, ask for a loan...
And maybe build a rapport with the loan officer, let them in on what you are doing....
The Best way to build a credit rating and credit history is with a real bank loan.
You can borrow from 'Other than banks' but those loans might not be reported to the credit reporting agencies, so they won't help you, but if you are late with payments, they WILL report that, so it WILL hurt you!
Those 'Buy Here, Pay Here' places are useless, as well as most store credit cards since they don't report to the credit bureaus unless you are LATE,
So they don't help you, but they can HURT you...
Start with buying a $1,000 CD (Certificate of Deposit) and using it as collateral on a loan.
Most banks won't loan you less than $1,000 or $1,500...
And with no credit rating at all, you won't get a loan for more than $2,500.
So around $1,500 to $2,500 is about right.
The all time best way is to have a loan officer that is in on the gig, and will issue you a check, escort you to the CD desk to get the CD, and then take it for collatral on the note she just wrote you the check for.
If not, and you have friends/family that will lend you $1,500 or $2,500 for about 2 hours, then when they inform you that the loan has been approved, take the money from friends, buy the CD, and take it to the loan officer to be stored as collateral...
Then that loan officer will issue you a check for the value of the CD, and you use that to pay back parents, friends or whoever...
A $1,000 CD will get you a $1,500 or $2,000 loan.
But you are better off covering the entire amount of the note right off the bat...
Some banks will actually load you up to $2,500 on a pay back plan, and then you use that $2,500 to buy up a CD and use it as collateral...
(It's called a 'Secure Loan')
If you have the entire loan secured, as in you use the $2,500 to buy a 2,500 CD, then if something happens,
(and believe me, SH!T DOES HAPPEN!)
Like you get disabled, laid off at work, ect, the loan is covered...
They can't loose, so they will loan you that $2,500 with no issues...
ALWAYS STAY AT LEAST ONE PAYMENT AHEAD OF THE PAYMENT BOOK!
You NEVER, EVER want to be late!
Late payments on your first loan would be BAD!
When the $2,500 load is paid off, you now have a $2,500 CD that collected interest, and you have a credit rating!
Sort of a 'Forced Savings Plan'!
Another way to get a loan is with a stable CO-SIGNER...
This would be someone with a good credit rating.
What a Co-Signer does is assume the loan in case you default and don't pay it back...
(Then they are on the hook and you have lost a friend, someone that trusted you!)
Co-Signers are not as easy as they used to be, people are much more leary of getting into something with people they can't beat up on at every family get together!
Banks are leary of lending on Co-Signed notes unless you are very young with no credit rating, like a parent Co-Signing for a kid,
Or you are freshly married with no credit rating...
Then your spouse is usually enough to get you a loan...
If you get a car loan, and if you buy a car that will be it's own collateral, that is often a good way to start a credit history.
If you get a car loan, GET IT THROUGH A BANK, like GMAC or your local bank...
You WILL NOT get a loan with out a down payment.
They aren't going to pick up 100% of the cost on your first note!
Getting a bank credit card,
(NOT a debit card that's attached to your checking account!)
And keep some small balance on it, but make sure you pay the bill the DAY it comes in!
And you will build a payment credit rating like that.
Don't have too may credit cards.
Credit cards usually have a $2,500 to $10,000 balance limit, so if you have 5 cards at with a $2,500 limit, that is a potential for $12,500 in instant debt, so that doesn't look good...
Don't EVER have a maxed out credit card!
Maxed out cards are a red flag that you are already in trouble!
If you have a problem with 'Impulse Buying', leave your credit card in a safety deposit box or even freeze them in a bowl of water in the freezer, anything to keep you from abusing them!
The credit card companies don't report your balances unless you are late... So use the card a couple of times a year, buy magazine subscriptions or get your license plates once a year, then put the credit card back in storage!
Pay the bill IMMEDIATELY when you get it!
All the credit companies will report is 'No Late Payments in the previous 12 months'... EXACTLY what you want to go on your credit report!