Establishing First-Time Credit
When you're new to the world of credit, establishing it for the first time can be frustrating. Most creditors want to see your credit history before they extend you credit. So, what if you're just starting out? How do you obtain that first credit card or car loan? While there's no foolproof solution to obtaining credit for the first time, there is a logical sequence of events you can follow to establish first-time credit.

1. Figure out your monthly budget.
Determine how much discretionary income you have each month by subtracting your monthly expense total from your monthly income total. Track these figures over a period of time, since it's just as easy to forget to include an everyday expense as it is to forget an expense that only comes along once or twice a year.

2. Open savings and chequing accounts.
When you are awarded first-time credit, you'll probably be paying the bills with a cheque, debit card, or online. All of these require you to have a bank account. Be careful to adhere to these simple guidelines:

	Don't overdraw your chequing account.
	Don't give others access to your bank account casually – that includes your PIN number(s).
	If you open a joint account, keep in mind that both of you may have equal access to the funds and equal responsibility for maintaining an adequate account balance to cover debits against the account.
	Use your debit cards wisely. It's very easy to loose track of balances and bank fees when you're a frequent user of either type of card.

3. Focus on improving your credit profile, which means improving how you look to potential creditors.
In addition to the suggestions for completing a budget and opening bank accounts, you’ll want to pay attention to the following as you’re attempting to establish credit:

	Establish an employment history. The longer you’re with one company, the more stable your employment history appears.
	Maintain the same address for at least one year – but three to five years is even better.
	Consider whether there is someone you can ask to co-sign a loan for you. However, co-signing is a big responsibility, so don’t be insulted if that person says no.

4. Use a sound strategy when applying for your first credit card or loan.

One section of your credit history contains a recap of credit inquiries. Therefore, you don’t want to get carried away by applying for too much credit too quickly. If you applied for a loan or a credit card and the company you applied with checks your credit, it is considered an inquiry. Too many inquiries on your credit report can result in a negative credit picture. Therefore, you want to be selective about where and when you apply for credit. The following are some ideas that will help you formulate a sound credit-seeking strategy:

	Make sure the creditor you start out with is a reputable company and that it sends reports to at least one of the major credit reporting bureaus – TransUnion or Equifax.
	Make an informed decision about which credit card or loan you apply for. Shop around for the best interest rate, the lowest fee structure and the most reasonable “grace period” (i.e. the time before interest is attached to a purchase made on credit).

	Begin with a low credit limit (you probably won’t have a choice). If you pay your bills regularly, eventually your credit limit will be raised.
	Pay your bills on time every month and try to pay more than the minimum payment each time.
	Once you begin to establish credit, be selective about applying for more.
	Remember to consult your budget before incurring any more debt. Make sure you have the ability to pay off any debt you incur.