Start by making sure all of your current bills get paid on time. If you have any outstanding debts, get those paid. Avoid at all costs applying for credit cards. You know the kind, you walk into the store and someone offers you a 2 liter of soda, or 5% off your shopping bill if you apply.
Keep you car insurance paid (this is very important because they are running credit checks). Try to prevent anyone from running a credit check at all. These show up on the 3 major credit bureaus.
If you must have one credit card, that is fine. Keep your total available credit at a low of $200 if at all possible and then, don't use it. If you must use it, pay it off by months end.
After that, once your credit starts getting good, if you should find the need to get a loan or credit of any kind, you interest rate should be a bit lower.
Lenders charge a higher interest rate for a lower credit score.
Hope this helps!
I got this answer from a financial advisor that gave out loans for homes. He said to first open and maintain a savings account with money in it, the amount growing slowly without withdrawing it. A little later open a checking account, making sure you have overdraft, and use the account to pay bills and it is ok to use the overdraft, just make sure that every month you come into the black and the account is restored as it is supposed to be.
The the next step would be to get two or three credit cards, like a gas card, a card from, a department store and a regular visa. Use them all between 20 to 50 % and pay them. In other words, if the visa card has a $2000 limit, then use it in the amounts between$400 to $1000 to buy something, like a sofa, and pay it off, then use it again the same way. In other words, dont max them out only use them to the half way mark and pay them off. After doing this and not letting any of your bill slide, like the lights, gas, etc. You will build you credit sufficiently in a year or two to be able to get a loan on a house.
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