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How do I establish credit?

If you haven't already done so, open checking and savings accounts with a local bank. Though these accounts are not generally reported to credit bureaus, having them is essential for paying bills.

Open one credit card account and use it for emergencies only. Choose your card wisely. Department store, gas company cards, and secured cards are the easiest to get. The best card to use is a debit card that deducts purchase payments directly from your checking account. Debit cards represent real money that you are spending from your checking account.

Once you apply for credit, you create a credit report and score. If you use student financial aid for your college expenses, you will begin your credit history. Your student loans are reported to credit bureaus once you sign your promissory note and the money is disbursed to you.

Pay your bills in full and on time every month.

Remember that one late payment will affect your credit for seven years.

After your bank and credit accounts are established, create a spending plan to guide your decisions on how to use your credit and money to your best advantage.