Your Credit Score, Part 2.

As I mentioned in Part 1, banks and credit card companies like as little risk as possible when deciding whether or not to loan you money - they assess this by looking at your credit history.

Suppose you are about to buy your first car and you don't have much of a credit history yet (Check it free at TrueCredit.com). You have enough cash to pay for it upfront, so why not? After all, you would save on finance charges. My answer would be to pay for a significant portion of it in cash, and take out a loan for the rest.

Why? This first loan will get your foot in the door, help you establish yourself, and show that you can be trusted to make payments on time. And because it is for a small amount, you won't end up paying very much interest. When this loan is paid off, banks will be clamoring to lend you money.

That's never a bad thing.