Here are some safer options that can establish your credit without the high risk of ruining your credit and ruin your chance at buying that home. Because face it credit is expensive. You want the option to find the cheapest loan possible.
Why would you need a credit score?
A credit score allows you to shop for the best interest rate on a loan. Borrowing is not the best way to get what you want, but there are some things that for most of us is difficult to obtain without a loan. A house is what comes to mind. Why not a car loan? Well, my philosophy is that there are enough used cars out there at a price for which you can save. A house can be bought used, of course. But most likely not easily saved for; therefore, obtaining a loan becomes the option of choice. A loan requires a credit score by most lenders and a credit score takes a bit of time. Not a lot of time. It takes less time to ruin a credit score than to establish.
Join a credit union.
Credit Unions are a locally established business in your area that is very connected to your community. Their lending requirements and rules are usually quite simple. Your rate does not fluctuate and they have a gracious grace period that doesn't fluctuate in a manner that can trap you into a high penalty fee or raised interest rate. My experience is that Credit Unions are in the business of keeping your business for life. And they would like you to do all of your financial business with them. They spend time preparing their staff to be a source of information to you as well as service your financial and lending needs..
A different approach to establish credit.
Borrow a small amount of about $500.00 or so and pay it back with regular payments over time. Save about $500.00 then borrow against it or get a credit card secured by that savings account. You are most likely not eligible to get an unsecured loan. Credit unions have a very good option of offering secured credit cards or secured loans where your savings account is the collateral. It may seem counter-intuitive to borrow against money that is in your savings account. Why not use it to purchase what you want? Remember, you just want to do it to establish a good credit score. The goal is to play the lending game without becoming dependent on borrowing.
Do this independently as opposed to using a co-signor. A relative may be more than willing to co-sign for you to establish your credit. While incredibly generous, it is not a responsible method. You are depending on someone else to back you up. If you fall, your co-signor falls with you. I have talked with way too many people who were shocked to find out their credit score was ruined by such a loan that went in default. That nice relative would be better off giving you some money to put into your savings account to use as collateral. By borrowing against your own savings account you are solely responsible for your actions. You don't pay; it will come out of your savings and only your credit will be ruined.
You've established credit. How does it appear on your credit report?
A secured loan against your savings account shows up as an installment loan. The credit agency does not differentiate between what is used as security. Installment loan means it is borrowed once and then paid off over an agreed amount of time. A credit card that is secured by your savings account shows under revolving credit. Revolving means you can borrow again and again. Simply, those loans show as loans that were paid on time, which means you are a good credit risk. Miss one payment and your credit score will plummet and be seen as high credit risk. Take it seriously.
You are on your way to a good credit score.
Once you have obtained one or both of these loans, use it until you are able to get one without being secured. Once you have a loan, revolving or installment, pay it on time and as agreed within your grace period. Retrieve a copy of your credit report once a year to make sure there is no fraud happening and see what your score is. You will watch it climb and feel secure that when it is time to buy that house, you will not have to worry about whether you meet the credit requirements. You just have to worry about affording the payment and how long to stretch that loan out.