It's crucial to establish credit as soon as possible, says David Jones, president of the Association of Independent Consumer Credit Counseling Agencies in Fairfax, Va.
"The easiest way (to establish credit) is to get an auto loan," he says. "You should have a credit card, too, as long as you don't have more credit than you can repay."
Jones says young people just out of college who carry a balance should prioritize paying down debt because credit cards almost always have higher interest rates than student loans. They also should keep their credit card debt well below the card's credit limit and always make the minimum payments on time. For grads without a lengthy credit history, missing a single payment can substantially lower their credit score.
"It could be by as much as 25 points," Jones says.