Build a Blemish-Free Credit History

Having no credit history can spell trouble for young people just starting out.

It may seem unfair, but someone with no credit history can be lumped into the same category as those with a credit report full of blemishes. Both circumstances can make it difficult to buy, lease or get the best interest rate on big credit purchases.

J.J. Montanaro, A CERTIFIED FINANCIAL PLANNER™ practitioner with USAA, says those with no reputation have an advantage: They can build credit history from scratch and steer clear of mistakes that show up as credit history blemishes.

First, don't apply for too many credit accounts. Start with one or two that offer the best deals and terms. Use them and pay them off monthly. Choosing same-as-cash offers that allow a specific period of time to pay off your balance can save you from paying interest charges.

And, don't max out accounts. If all cards are charged to your limit, your score suffers.

Leave old accounts open. You may never use them again, but your oldest accounts give those interested in your credit report an idea of how long you've had experience managing credit responsibly.

Finally, keep an eye out for fraud and mistakes in your report. A credit monitoring service is helpful, or you can get your credit report from AnnualCreditReport.com, for free, three times throughout the year.