In a world that pushes the idea of buy now and pay later, it can sometimes seem like there is just no way to function without the use of credit and going into debt. On the heels of that thought is the question of how to best establish credit when you have none.

Certainly this can seem like a catch 22 because you need to have a borrowing and payback history to show to the company you want to borrow from and how in the world can you do that when you are just establishing credit for the first time?

There are actually a number of great suggestions to help you learn how to establish your credit and they are actually rather simple steps you can take immediately and these steps work whether you want to create your own borrowing history or if you are establishing credit for your business.

One of the best ways to start out is to further the relationship you probably already have with your local bank by asking for a small loan, and letting them know of your intention to use this for establishing credit with no credit and find out what the best type of loan would be for that purpose. Depending on your work and income situation they may suggest that you secure this loan with a savings deposit in an amount equal to the loan you would like to start out with. This arrangement allows you to develop a payment history with them and reduces their risk since the loan is backed by your savings account.

There are also a number of companies that offer secured credit cards under a similar arrangement, but read their terms carefully and watch out for the extra fees and charges they will try to hit you with that are often much more than what you would get from your local bank.

Some people say the best way to establish credit for yourself is to apply for a line of credit with a chain department store or one of the gasoline companies. These types of companies are often have lower requirements so it is easier to get a new account with them. Keep in mind that the only way to create a payment history is to use the card and then make regular timely payments, so be sure that you apply with a store where you like to shop. An unused card won't do you any good as far as getting your track record going.

A couple other options to establish a credit score when you don't have one, is to ask to be made an authorized user on an account that someone else, such as a close friend or trusting family member, already has opened, or ask them to co-sign on a new loan with you. Auto dealers often advertise that they can find financing for anyone, but since this is usually a larger purchase than taking out a minimal loan at the bank, you need to be sure you can handle the payments and other car expenses and the dealer will want to be sure you have sufficient income before helping you with steps to establishing credit.

Once you do get your first loan or card, then do everything in your power to make your payments on time, every time. No matter which method you to establish credit, understand that achieving and maintaining a good credit history is a lifetime pursuit that can pay big dividends over your entire life.