Want to purchase a car? Obtain a mortgage on a house? Purchase an airplane ticket? Utilize Citi Bike? For any of these transactions, you need a credit card. To get a credit card, you need a social security card. You also need a credit history and credit score.

Payment on any loan, such as a car loan, mortgage, or credit card will help build a credit score. (Did you know?: If you have never borrowed money and consequently never paid back a loan, your credit score is 0.)

Credit scores range from 0 to 850. Scores in the 500s are considered poor, in the 700s are good, and from 800 to 850 are deemed excellent. How can you achieve a high credit score? Paying bills on time for years and never missing a payment helps. Having different types of credit such as car loans, credit cards, and student loans is also beneficial. It's important to keep accounts active at a low utilization rate, so not maxing out card limits helps, too.

If you cannot obtain a conventional credit card due to poor (or a lack of) credit history, there are ways to improve your credit score. You can apply for a secured credit card, for which you deposit the same amount as your credit limit into a savings account with the financial institution. Therefore, the bank is not at risk of losing money. If you default on the loan, the lender simply takes the money from your deposit.

You can also ask someone with good credit if you can be added as an authorized user of their credit card account. Even if you do not make any purchases with that person's card, their good credit history will become your good credit history. Establishing good credit is doable, and is essential for your financial life in the 21st century.

Your Score: an Insider's Secret To Understanding, Controlling and Protecting Your Credit Score by Anthony Davenport, 2018

I love this book because I learned so much about credit scores and personal finance.

Books on credit scores