Many people just don’t understand how valuable a good credit score can be. If you have ever applied for a loan, then you already know that most lending institutions require borrowers to have a certain credit score that reflects your ability to pay your debts on time and without fail each month. The lender does not want to make a mistake by lending to you. People with good credit scores experience less difficulty when applying for house or car loans, simply because their credit score tells the lender, “You can trust this person”.
The safest way to establish and build your credit is through a credit card. There are a lot of credit card companies competing for your business today that will offer you low APR's, competitive interest rates each month, and even payment terms that are flexible. For beginners, you should try to apply for just one credit card. Make sure the credit limit stays at a small percentage of your yearly income. For example, If you work a part time job and go to school, then a credit limit of $1000 should be more than enough. If you stop and think about it, this is a smart decision on your part. A single card is much more manageable to keep track of, and most of all, a small balance will be easier to pay. Keeping your card's limit low also makes sure that you can not spend over your income level.
If you are still worried that you might not handle your credit card wisely and end up ruining your chance at building a good credit score, then you should apply for a secured credit card.
Secured credit cards can be perfect for first timers. A monetary deposit will act as security for the credit card company just in case you get into some financial trouble and can not pay off your credit card bills as agreed. Treat it as practice for the real world. You will be able to gauge how well you handle your finances before you have a chance to ruin them. If your secured card does not work out as planned, the deposit you made previously will pay off the debt you accumulated on that card. If you can use the card responsibly however, then your credit card company will report your payments on time and you are off to a great start establishing and building credit.