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We live in a society that is ruled by credit and credit scores. Having good credit is extremely important and can give you the ability to receive approval for a low interest mortgage, car loan and credit cards. For those that are turning 18 or currently enrolled in college establishing credit is definitely one of the most important things you can do to assist you in the future.

Educate Yourself First

The second you walk onto a college campus you will probably be inundated with free credit card offers, however many of these banks don't always have your best interests in mind. It is important to understand how credit works and how to use it responsibly. Credit cards are unsecured loans. They are not free money or tools to purchase items when you really can't afford it. While they can help you pay for much need expenses, using them irresponsibly can be very costly and damage your financial situation for years to come.

Start off with One Credit Card

In order to establish credit, you will need to take out a loan (car loan or apply for a credit card). You don't need to have more than one credit card to establish credit. In fact, having more than one can be very dangerous, especially if your income is limited. While in college continue to pay off any debt in a timely manner and by the end of your years in college, you credit history will have been established. Having two cards or more doesn't establish your credit any quicker and in fact can hurt you by making you spend more unnecessarily.

Car Loans are a Good Tool to Establish Credit

Taking out a car loan- even with a cosigner is a good way to establish credit. Car loans show that you are able to pay a specific amount each month for a lengthy period of time. Since car loans are 3 to 5 years in length they usually give more than enough information to banks and lenders to establish your credit.

School Loans Can Also Help You Establish Credit

School loans, even if you don't have to pay them back immediately show up on your credit report and can be a good tool in helping you establish credit. Just like car loans they give a lender or bank long term payment info.

If you are looking to establish credit, definitely take a look at the above tips.