A good first step is to open a checking or savings account. It's an easy way to demonstrate that you're able to handle money responsibly. Just making regular transactions without overdrawing the account will begin to build a good record.

The next step is to get a credit card. To qualify you'll need to be 18 years old and have either a steady source of income or a savings account. It's easiest to qualify for a department store or gasoline card.

If you're a full-time student you won't need to prove your income to qualify for a card with a low credit limit. Most card issuers are anxious to sign up college students. Even for major credit cards.

Ironically, it's harder to get a first credit card after graduation. The card issuers figure that parents will bail out students but not grads.

You shouldn't apply for a bunch of cards. That will hurt your credit rating. It's much better to get one card and pay it faithfully for a year. Then apply for a second card. That will demonstrate that you are managing your credit responsibly.

First time cardholders will not get the lowest rates. But if you pays the entire balance each month it won't make any difference. And paying bills on time is very important.

If you have trouble getting a card, you'll need to use the strategy that she mentioned and apply for a "secured card" first. Money is deposited with a bank which acts as security for your card. If you don't pay the bill, your money will be taken from the bank account.

There's enough competition now so that you can find a number of secured cards that don't require an application fee. Rates run from about 10% to 20% and annual fees range between $18 and $45. You can ask your bank or check out Bankrate Monitor to find a card issuer.

If you use a secured card properly it's possible that you'll get a better reception on a non-secured card after 12 to 18 months.

You need to manage your use of the cards. The best (and cheapest) plan is to pay the entire bill each month and not carry a balance. Unfortunately, that's not what most first time cardholders do.

Experts say that monthly installment debt should not total more than 20% of your monthly take home pay. Even that level could be too high. For instance, that much money committed to installment debt could make it very hard to afford a house later.

Now we move on to the specific goal - a car loan. It's likely that there won't be enough time for you build up a good credit history before you want the car. You should apply for a loan at the bank or credit union where you keeps your checking or savings account. Hopefully your reputation there is good.

Some car manufacturers have great programs for graduating students with job offers. My first car was Toyota Corolla with NO credit history whatsoever. All I had to provide to a dealership is letter that I am about to graduate or have recently graduated and official job offer from a company. Such a wonderful way to help young educated people into this crazy world!

It's also possible that you'll be able to arrange credit through the dealer where you buys your car. Sometimes they'll make loans trying to attract younger buyers for their brand of car. If you do go through the dealer you'll probably pay a higher rate of interest.

Finally, if no one will give you a car loan, you can get a co-signer. Your parents could agree to be responsible if you defaults on the loan. But that's a step that should only be taken after careful thought. Remember, the banks are saying that you are not a good credit risk. When you co-sign a loan, in effect you're saying that you know more than the bank. And you're willing to put your own money behind your beliefs. If anything happens they will be responsible to make the payments.

Now that we've seen how you can establish credit, let's ask a different question. Is a car loan really the best way to go? Is it wise to borrow to buy a car?

Just to illustrate, let's assume that you borrows $10,000 to buy the car. You takes out a 4 year loan at the current rate of 8.8%. You'll be paying $347.90 per month or a total of $11,947 in payments. In effect, you've paid 20% more for the car than if you had paid cash.

And, you've created a pattern that could last a lifetime. If you are making car payments it will be hard to save up for your second car. So you'll be borrowing again. And again with the third. It's as if you've agreed to pay 20% more for every car you buys as long as you lives.

Sure, you probably can't afford to pay cash for the car you wants now. But by sacrificing with a cheaper, affordable car now, you could save yourself tens of thousands of dollars over the years.