Credit is offered to people based on what the industry calls the "Five C's Of Good Credit."

Character: Are you the kind of person who pays his or her bills on time?

Capital: Do you have enough income and/or net worth to incur debt?

Capacity: Are you stable? Is your income and job secure enough to warrant debt?

Collateral: Do you have assets to secure the debt?

Conditions: Have current market and government conditions established interest rates that will make the debt difficult for you to pay as agreed?

The Five C's are basic principles and are readily evident in the kind of information kept in a credit report. Each creditor, however, will determine its own set of criteria for offering credit.

If an individual has no credit history whatsoever, he or she must begin by displaying the qualities that would encourage a creditor to offer credit. Though many young people just move into using credit as they grow up, at times this process requires conscious effort.