Building credit is important because it effects the scorecard known as your credit score.  When ever you apply for credit your credit score is reviewed to determine your credit worthiness.  Having good credit not only helps make sure that you can get the loan but it can get you better interest rates.

So how do we build credit?

The most important part of building credit is making sure that your bills are paid on time, every time.  If you pay late it may get reported to the credit reporting companies and your score will be effected.  As you may know or remember getting that first credit card didn't have a very high balance on it.  This is because you may be considered a high risk because of lack of credit.  So over time as you make a purchase with that card and pay it off in a reasonable amount of time your are establishing a credit history.