RITE OF PASSAGE INTO WORLD OF CREDIT IS FRAUGHT WITH PERILS AND CATCH 22S

PAYING WITH CASH DISDAINED, YET THERE IS NO EASY WAY TO GET INTO THE FOLDEvery year a new crop of youngsters enters the world of adult finance, the first requirement of which is access to credit in their own names.

This is a credit society, and those who don't have it - who, in fact, might disdain it in favor of paying everything in cash - very often find themselves in perplexing situations.In fact, it has been argued from time to time that credit is a right, since the possibilities of existing or advancing in a credit society are greatly lessened for those who pay in cash or are denied access to the system.

Having credit is, in a sense, a person's identity in the marketplace, often being necessary to rent a car or reserve a hotel room. An absolutely credit-free record might be admired in some places, but not in the marketplace.

It is odd, therefore, that there is no smooth, formal, recognized, accepted, institutionalized way of entering the world of credit. You must, so to speak, walk through the wall. There is no door; there isn't even a key.

At most, there are a few tips, says the Consumer Credit Institute, to wit:

-If you haven't already done so, open a checking account and a savings account at a financial institution. You may then use the institution as a credit reference, assuming you keep your checkbook correctly posted.

-After a couple of months, ask that institution for a Visa or Mastercard line of credit. Some might offer these cards even before you apply. If so, take them, and never miss a payment.

-Investigate "affinity group" credit. This is credit made available to members of a particular group, including alumni of colleges. Such groups sometimes offer widely accepted credit cards.

-Check on the prospect of using your savings account as collateral for a loan. Generally, such loans also carry very low interest rates.

-Apply for a local retailer's charge card. Small stores tend to judge you at face value rather than through credit history. They want your business. If you obtain credit, pay your bills promptly. You want them as a reference.

Even if you're successful in all these possibilities, you still might be forced into having a co-signer for big-ticket items such as an automobiles. Co-signers often are parents.

Most of these suggestions are from the institute, a division of the American Financial Services Association, which represents companies that lend to consumers and small businesses. But such suggestion are only the beginning.

That is, once credit is established, it must be built, a process that new credit-users have always sought to speed up. It can be done, although it might cost a small amount of money.

The technique, used over the years by many entrepreneurs, is to borrow money and then simply use it and a bit more to repay the loan ahead of the scheduled repayment date. Pre-payment impresses lenders.

On the next visit to the lender you make use of your good record. You apply for a somewhat larger amount, and because of your good repayment record you might get it.

Tyler Hicks, a business executive and author of more than 50 books on grass-roots financing, describes a once popular technique in which borrowers obtained three times as much money as their financial situation would suggest.

The technique was simple: Knowing they faced a turndown if they applied for $15,000, they applied instead for five $5,000 loans at five banks in the same day.

To the question, "Do you owe money to any other lender?" they would answer "no." It was an honest answer, since they really had no big debts outstanding.

If the person was lucky, and appeared to be reliable and responsible, perhaps three banks would respond with $5,000 each. The trick then was to find an investment that would make the $15,000 grow larger.

The more conservative of these borrowers would refrain from using the entire $15,000, but instead would invest $10,000 in an income-producing property and keep $5,000 in reserve to service the three loans.

It was a desperate procedure, but many real estate investors got started with this or similar techniques.

They agree it was dangerous to their financial health, but as they saw it, it was even unhealthier to attempt getting along without sufficient credit in a credit-based society.