What exactly is good credit?

I'm 18 years old and planing on moving out of my parents house. I have been working for 3 years and saved up almost enough to buy a house, but someone told me its not such a good idea to pay with cash that i should start off with credit, or my credit will never build up. The thing is I have no idea what people mean when they say ';good credit';, what exactly is it? How do I get started? Can someone please break it down to where i know what I'm getting my self into.What exactly is good credit?
If you really can pay cash for a house then do it. My grandmother and grandfather paid cash for the house they bought and lived there for years.



What these ';people'; mean is that they think you should show that you can reliably pay off loans. The only way to build up good credit is to borrow money, but it doesn't have to be a mortgage for a house. It can be from a credit card or a car loan.



I hope this helps.

GaryWhat exactly is good credit?
';Good credit'; basically means that you have shown that you can be relied on to pay your debts.



The real world isn't purely cash-based, and therefore, you will the ability to sometimes take on debt - such as buy things with a credit card, or get a home mortgage, etc.



The better your credit is, the easier it will be for you to get credit, and the cheaper your loans will be.



(It seems weird to say that money can be cheaper or more expensive, but it makes sense when you realize that you have to pay extra to get a loan - if someone loans you $1000, they eventually will want more than $1000 back; the extra amount is called ';interest'; and covers their overhead in lending to you).



So... to start getting good credit, you need to get someone to loan you money, and then you need to pay it back.



Some easy ways to start would be with a credit card (maybe a secured card initially - where you pay some $$$ up front), or with a charge account at a department store.



From there you can work your way up to things like car loans, mortgages, etc.



Once a year you are entitled to a free credit report that lists your credit score and your credit accounts, to get it go to www.annualcreditreport.com (there are other places that say they are free, but this is the only one that's really free - the others will try to make you sign up for stuff).



Good luck!
If you saved enough up to buy a house cash, I would definitely buy it, if that's what you want.



Good credit is getting credit cards and loans and paying them on time and paying them off. Your credit history is a record of every time you used credit. They are done by three companies.

If you pay all your bills on time, you will get a good credit history.

A prospective lender will look at your credit history to decide if are a good risk for credit.
If you wanna buy a house and pay it on cash. There is no problem with that. I always wanted to acquire a new house and pay it on cash so that I have to worry about monthly payments.



A ';good credit'; mean is that you are a reliable person with regards to your credit.
If you are desirous of establishing a good credit record, you should start off by applying for a credit card. The companies that monitor credit history compile information based on your payments and responsible consumers build up a good credit report by promptly paying off what they owe. A second consideration, especially if the consumer did not qualify for a conventional credit card, is to apply for secured credit. This method lessens the lender's risk by having access to some kind of guaranty from the borrower in case of default. An alternative way is to have a person with a proven history of good credit co-sign a loan. These co-signers are a form of guarantee diminishing the lender's risk of non-payment.