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Building credit is not as difficult as you might think.  You can establish credit in as little as 2-3 months, have solid credit in about a year, and have impeccable credit throughout your entire life.  All it takes is planning and a basic understanding of what actions can influence your credit rating.

If you are starting from scratch, here is a step by step guide to establishing credit along with tips to help ensure that the credit you establish works for you instead of against you. 

1. Check Your Credit � Even if you know for a fact that you have never had a credit account, you should still start by checking your credit reports so that you know without a doubt the information that is in your credit file.  Your report contains more than just credit accounts and may have inaccuracies.  You may even be surprised to find that someone else has been using your credit as their own while you weren�t using it.  At any rate, it is good to know what you have to work with.  Click here to learn where you can check your own credit.
    
2. Dispute Inaccuracies � If you found nothing on your credit report or if everything there was correct, skip to step 3.  Otherwise, you will need to clean up any errors on your report before you attempt to build your credit.  Skipping this step can cost you money due to the fact that creditors will be using the information on your report to decide how much interest to charge you when you open accounts with them.  If the type of error in your credit report is severe enough, this could literally cost you thousands of dollars.  Also, higher interest means higher monthly payments.  Article: How to Dispute Items on Your Credit Report
    
3. Get a Credit Card � Once you know that the information in your credit report is correct, it is time to start building your credit.  Begin by evaluating what it is that you need.  Applying for more credit that you need can cause problems down the road so, for now, stick to what you need.  Instead of applying for standard credit cards and loan offers, start with accounts that are tailored to meet a specific need. Try opening a gas card, department store card, or secured credit card (a card that uses your savings as collateral for the credit limit).  Other tips:
    
   1. Watch out for high APR�s.  You can expect slightly higher rates due to the fact that you do not have a credit history, but it should not be astronomical.
       
   2. Stay away from �zero grace period� credit cards.  These are credit cards that start charging interest as soon as you make a purchase whereas most credit cards will give you around 25 days to pay off your charges before they begin tacking on interest.
       
   3. Read the fine print.  Know up front what rates and fees you will be paying and under what circumstances those rates and fees will increase.
       
   4. Never accept offers that come to you over the phone.  Fraudulent offers will often come this way and respectable companies will never solicit your social security number over the telephone.  Your safest option is to look for an offer that fits your requirements instead of accepting offers that come to you.  To search popular credit card offers, click here.
       
   5. Consider having someone with good established credit to co-sign on your first account, but keep in mind that by co-signing they are agreeing to share the responsibility of your debt.  Any mistakes you make will reflect poorly on them as well as on you.
       
4. Use Your New Credit Card � Once you have opened your new credit card account, it is important that you use it regularly without over extending yourself in the process.  A good idea is to use your credit card for small purchases and pay the balance in full each month.  Try paying for all your gas with your new credit card and set aside the cash you would have used and send it as your payment when your bill comes. Don�t look at credit as a substitute for cash.  Instead, think of credit as a delay in using your cash.  Be especially careful if your credit card account has any sneaky rate increase terms or late payment fees.  Being responsible with your credit accounts is the best way to build and maintain good credit.  Take a look at this article: Factors That Influence Your Credit Score
    
5. Check Your Progress and Build on It � Once you have used your credit card responsibly for a few months, check your credit report again to make sure that the credit card account information and your payments are being reported correctly.  Your credit score should increase fairly quickly which will cause you to get a ton of credit card offers in the mail.  While it may be tempting to fill them all out, we recommend that you stick to our earlier advice and seek out credit card offers that will meet your needs rather than accepting offers that come to you.  To search popular credit card offers, click here.
    
6. Protect and Monitor Your Credit � The best thing you can do is to get your credit report and review it every 6-12 months.  If you find inaccuracies, you can take the steps to correct them before your credit profile gets out of hand.  Monitoring your credit will also give you a chance to detect credit fraud in its early stages.  See Article: How to Compare Credit Report Monitoring Services