Build your credit history

At 18 or 19 years old, no one expects you to have built a credit history yet. But if you're a student, banks have special accounts which give you the ability to borrow – these are your gateway into the world of credit.

When you open a student account, you can apply for a 0% overdraft. These advertise overdraft limits of up to £3,000, though actual limits tend to be lower, especially in your first year.

Don't just open a student account with the bank you had an account with when you were a kid – chances are it's not the best. We've full information on the best student accounts, including 0% overdrafts up to £3,000 or a free four-year railcard, and what you need to think about when choosing, in our Student bank accounts guide.

It's best to choose on the size of the overdraft, rather than any freebies the bank chucks at you. If you end up going over your overdraft limit because it's too low, you'll pay charges that'll make the cost of the freebie pale in to insignificance.

There'll come a time, whether at university or at another early point in your credit journey, when a credit card company will target you for one of its cards, complete with snazzy marketing.

Credit cards aren't a bad product in themselves, but in the wrong hands they can be.

The best cards normally require a decent credit history but there are cards that are designed for people with a poor credit history or a thin credit file. If you've little track record, it's likely you'll need to start off with these. Yet because people using them are more risky for lenders, they make the cards quite expensive – interest rates of 34.9% are common.

But if you use these cards sensibly, you won't ever need to pay this interest rate. Ideally, you'll use it for planned, budgeted normal spending each month, pay it off in full on time, and reap the credit file benefits – doing this shows you can use credit responsibly and pay it all back. Check our guide for the Best credit (re)build cards.

WARNING: If you don't have financial discipline, don't do this. Credit cards very easily allow you to spend more than you can pay back, even ones that have a low credit limit.

Even if you're struggling to make a payment one month, try not to default or miss payments – it can be a massive hit to your credit history. Missing payments once or twice could cause problems that cost you for years.

The easy solution is to pay everything by direct debit, then you'll never miss or be late. While we normally caution against only making minimum repayments on debts (see our Danger: minimum repayments guide), one technique is to set up a direct debit to repay just the minimum, purely as a vehicle to ensure you're never late. Then manually pay more each month on top.

If you are in difficulties contact your lender – hopefully it will try to help. Changing your repayment schedule is preferable to you defaulting, and though it will hit your credit score, it's better than the alternatives, which can very quickly mean a good credit score goes bad.