The key is to start small. Get a gas or department store credit card, make a few small purchases and pay your bills on time. For a bill to be considered "on time," the payment must reach the company by the due date. Slow or missed payments will be seen as a sign that you may have trouble handling credit.

Credit can help you get something when you need it. When you take out a consumer credit loan, you promise to pay it in full, usually with interest, at set dates in the future. Interest is a charge added to the original amount of the loan to pay the lender for the use of the money. When you use credit to buy something, you're promising to make your payments on time.

Sometimes it's easier to get credit for the first time if you have a creditworthy co-signer - a relative or friend who signs the application and loan agreement with you. Your co-signer must repay the loan if you don't.

Earn and protect a good credit rating by following these tips:

• Take on more credit only if you're spending less each month than you take home.
  
• Pay your bills as early as possible in the payment cycle to keep finance charges low and improve your credit record.
  
• Keep copies of sales slips and payment history to resolve questions regarding your loan, should there be a dispute.
  
• Close accounts you're not using. Lenders look at opened, but unused accounts as an opportunity for you to go on a "spending spree."
  
• Borrow only what you can afford!
  
• Don't hit all your credit limits.
  
• Don't skip or make late payments. Call your lender if you're having trouble making payments on time and ask for a reduced payment amount.
  
• Check your credit report to ensure information is accurate.