While it is a great idea not to buy things that you cannot afford, you have to actually establish and use forms of credit in order to earn a credit score. The more often you demonstrate that you are responsible with the credit that you have been granted, the stronger your score will be and the better access to credit you will have.
There is a happy medium here. It is not a good idea to try and establish all of your credit all at once and you certainly want to avoid opening up and trying to maintain too much credit. A typical credit report will often contain a mortgage trade line, one or two auto trade lines, and two or three credit cards along with whatever previous credit you obtained and paid off or otherwise closed. Establishing this type of credit will ultimately help you to build up your score as you make timely payments and pay down your debt levels while maintaining available credit sources. As your credit history builds so will your score.
You should still use cash when it is comfortable for you to do so, just don’t expect to build up your credit score without first establishing a credit history.
This Tip is part of Scott Arney's educational series, entitled The Serial Decision Maker.