If you are just getting out of high school and are wanting to build your credit, there are a few different ways that you can do this. If you already have a checking and savings account, then you are well on your way to having credit that is in good standing. If you do not, the first thing that you need to do is get one of both and find a way to (legally) fund them. After you do that, you can either begin building your credit by obtaining a credit card or a loan from your bank.

The advantage of credit cards is the fact that you have a revolving line of credit with them that you can access at any time you need to. It is not a one time loan, which is why it is called a revolving account. You can have the line of credit increased to several thousand dollars as your reputation with the company builds. Credit cards are a great way to build your credit history and score, but you should be aware that they are easily abused. Pay off the balance every month if possible, but if not, you should at least pay more than the minimum required payment. It can take decades to pay off a balance by paying only the minimum amount required, so make the largest payment you can every month and never let yourself be late. In most cases, you can set up an e-mail notification to let you know when your payment is due every month so you do not miss one.

The advantage of a loan from the bank is the fact that it is harder to abuse the loan from the bank than it is to abuse a credit card. When you borrow money from the bank and you spend it, you can only spend it once. If you need more money after the amount of the loan has been spent and repaid, you have to reapply for another loan. A credit card is a line of credit that is available to you again after you repay the amount you borrowed. Depending on the amount of money you need, you will want to get a loan from the bank versus a credit card, such as if you want to purchase a car or a house. The only thing is that getting approved for a credit card may be easier than getting approved for a loan at the bank, depending on where you apply and how much you want to borrow. So, if you have problems with controlling how much you spend, you may want to go with the bank loan instead of the credit card so you have a fixed amount that you can spend instead of a revolving line of credit that can eventually ruin your credit score.