In order to build your credit history, it is important to always pay your bills on time and to never borrow or spend more than you can afford. You will damage your credit history by paying bills late or not at all.

If you are a young adult, a college student or a new immigrant, you can begin to establish credit in many ways. In fact, you may already be building a credit history. For example, if you own a cellular phone or a pager, you have already begun to build your credit. From here forward, as you continue to pay bills on time and responsibly handle creditors, you will begin to build positive references on your credit report.

If you already have a credit card, you are well on your way to building your credit history. In fact, personal finance expert Gerri Detweiler advises that a major credit card, issued by a bank or other financial institution, that is paid on time over a period of time, is one of the strongest credit references on a credit report. However, a credit card may not be appropriate for everyone. Before obtaining a credit card, you should learn everything you can about your obligations as well as the terms and conditions associated with using the card. For more information, review the credit section on this website under payment cards.

If you have never borrowed money from a financial institution or made bill payments in your name, then you probably do not have a credit history. Nevertheless, many card issuers offer cards designed specifically for those with little or no credit history. For example, secured cards may be an appropriate first step, or you may consider using a co-signer on your credit card application. Again, it is important to understand as much as you can about the responsible use of any financial tool before applying for and accepting a payment product.

Refer to our "do's and don'ts" list for additional facts on establishing good credit.