The world is full of objects that mankind considers valuable. Cars, houses, gold, jewelry, love, friendship, and an education all have worth and provide those who possess them with gifts, security, and a pleasant life. Nothing, however, proves more advantageous in life that a high score report from the credit bureaus. If you are young and have not yet established creditworthiness, the time to start is now. Fortunately, it is not as difficult to enter the credit world as it once was. At one time in the not too distant past, like when I was a young adult seeking to begin building my own credit, getting that first loan or credit card was a thorny business. Now, however, financial institutions are willing to extend credit if you appear responsible and reliable. So, how exactly do you go about showing you will pay your bills if no one has yet given you the opportunity?

Well, first things first. It is a good idea to have utilities put into your name. If you are a student out on your own for the first time, have the water or electric bills put in your name rather than your parents’ names. Although they are not necessarily reported with the credit bureaus, some lenders will look to them to see that you have been responsible in paying your existing bills.

Next, turn to your local bank. Just about everyone needs a checking account, and trust me, a savings account is worthwhile as well; be sure to open an account at the local bank or credit union of your choice as soon as you begin to have income. Almost every city has banks that offer free checking, and you should always try to find free checking and don’t get caught up in “service fees” for add-ons. Once you have the checking account, be sure to manage the money in it well. Do not run your balance down to nothing, do not make the ATM your best friend, and never under any circumstances ever bounce a check. It is better to go home and have dinner at mom’s house than to overdraw your account by writing a bad check to the grocery store.

Having a bank checking account that has a decent balance most of the time and has never been overdrawn can benefit you in two basic ways. First, it shows that you have some extra money that you could use to pay bills, and it shows that you are being responsible with your money. Secondly, and probably more importantly to you, the responsible way you manage your bank account helps you establish a positive relationship with your financial institution, so they are more likely to extend credit to you when you want a credit card or need a car loan.

After establishing utility and checking accounts, you may wish to take up the salesclerk’s offer the next time you are buying a pair of jeans at the mall. Generally speaking, those department store credit cards are a bad idea; in fact, they can be quite the rip-off. Usually, the interest rate on these types of cards is extraordinarily high, and therefore not a wise move. However, for those who are still trying to get credit, they are much easier to get than major credit cards and can serve as evidence of your creditworthiness for credit cards with better interest rates after you have paid on these for a while. The best plan of action, though, if you are going to secure a department store card, is to keep only a tiny balance on it. If you are buying $100 worth of t-shirts and lipstick, be sure to pay $90 when the bill comes in. Maintaining a small (very small) balance is your best bet. When you show that you can pay the department store cards, soon you will receive offers for major cards like Visa or MasterCard. Whatever you do, pay, and pay on time!