Having a good credit score can make or break you in today’s world when it comes to a lot of different things, such as buying a car, a house, or getting the loan that you need to go to school. There are a few different ways that you can start out once you are old enough to start building credit of your own, but there are a couple of things that you need to do first.

Obtain both a checking account and a savings account. Now, this does not mean that you actually have to use the checking account to pay bills and whatnot with, because balancing a checkbook is pretty hard to do sometimes even for those of us who have experience, but if you really want to keep track of how much money you have versus how much you have going out, you will have to learn how eventually. The savings account should be getting deposits of some kind regularly, at least $20 to $50 a month, but $100 per month or more is best. Having an emergency savings fund that is equal to around 3 months of your current income in case you lose your job or are unable to work will help you maintain your credit score during that time.

After you obtain these two things and get a good start on savings, shop around for a credit card. Beware that credit cards can and will ruin your credit score in a heartbeat if you are not careful with them, so if you have any problems with financial responsibility with your checking account, forget the credit card until you are sure you can handle the responsibility. They are wonderful to have, but they can ruin you. Once you are sure you can handle it, get a card that gives you rewards for using it and try to make sure you will actually use the rewards you are given. Ask yourself where you spend the most money every month (for many people, outside of rent and food, it is gas) and try to find a card that gives you back something for spending that money.

If you are certain that you can pay off the balance every month, use the reward card for everything that you can get points or miles for that you would normally purchase. Whatever you do, do not extend yourself past what you can pay off at the end of the month. Once you start carrying a balance on your cards, it is likely that you will never stop and you will lose a considerable amount of money in interest. If you wish to make a big purchase that your card will not cover every month and it is not a necessity (like a new Playstation 3 or big screen TV), make a payment to a new savings account every week or month until you have enough money to buy it.

Once you have your checking, savings, and credit card accounts fully under your control, you can apply for that loan you need with the peace of mind that you will not only get it, but obtain a good interest rate.

Dror Klar is a writer in the field of finances and is currently assisting those in need of cash advances and payday loans, particularly in the state of California

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