Dear Carrie: What is the best way for a graduate with a new career to build a good credit rating? I have no credit at the present. -- A Reader

Dear Reader: Credit is ubiquitous in modern life, but the realities of it, particularly the details of your credit rating or "credit score," as it is more commonly known, are not well understood. But you're smart to think about it now as you're starting out because it's not just your ability to borrow money that is at stake. Some companies use credit scores in making hiring decisions, landlords can use credit scores to screen rental applicants, and some insurance companies may even use your credit score to help determine your premium.

You'll probably be able to get a credit card now, but without a credit history, the terms may not be very attractive. That's actually OK: Your goal should not be to use the card too much, but just enough to build your credit rating. That way, when you really need credit, like for a car or a house, you'll get the benefit of lower rates and more attractive terms.

Your credit history, essentially, is translated into a number: your credit score (also known as your FICO(r) score, after its creator, the Fair Isaac Corporation). It's a numerical assessment of your creditworthiness, and credit card companies, mortgage lenders and other lenders use it to determine not only if they'll give you credit but also at what terms. When it comes to your credit score, higher is better! The top score is 850; the median is 725, and 760 or higher will typically qualify you for the best deals.

How can you boost your rating? Here are five things you can do to ensure your credit score is as high as possible:

-- Pay your bills on time. Credit card bills should, obviously, be paid on time (it's ridiculously expensive to be late with a credit card bill these days), but you should strive to pay all your bills on time, including telephone, cell phone and utilities along with student loans. Your payment history counts for about 35 percent of your overall credit score.

-- Build a credit history: Lenders like people with long records of on-time payments. Your score will be higher if you keep cards for a while instead of jumping around from card to card. Your history accounts for 15 percent of your credit score. Continued...