Start Building Your Credit History, Today!
Students, anyone new to the work force, homemakers, new divorcees or widows with no financial track record often find themselves in the dilemma of trying to establish their credit history. How is it possible to start building your credit when you can't get approved because of your lack of financial history?
Here's some common ways to get started:
1. One way to show a potential lender that you're a good credit risk is by opening individual checking or savings accounts in your name. While a bank account will not affect your credit file, the account activity will demonstrate your ability to handle money responsibly. However, writing bad checks or overdrawing your account are negative indicators to lenders and do damage to your credibility as a good credit risk.
2. Apply for a department store and gasoline credit card, which are generally easier to obtain than major credit cards such as a Visa, Mastercard or Discover. Pay it off every month to show that you can responsibly handle money. If you must carry a balance, you must pay your monthly bill on-time.
3. Another good way to establish a good credit history is to apply for a small loan or line of credit from your local bank. Repay the loan promptly and on-time to build a positive history and earn a good credit rating. Increase your chances of getting the loan you're applying for by coming up with a large down payment.
4. If you don't qualify for a loan on the basis of your own credit file, consider asking someone with an established credit history to co-sign your application. To get a loan without a co-signer, you must be at least 18 years old and have a steady source of income. If you fail to repay, the co-signer promises to do so on your behalf.
Qualify for Your First Credit Card
If you are at least 18 years old and have a regular source of income or savings, you're on your way to qualifying for a credit card. But you'll still have to demonstrate that you are a good customer. The proof is in your credit history, which lists the amount of credit you have received and how faithfully you've paid it back. If you've financed a car loan or other purchase, you probably have a record at a credit reporting bureau.
Your credit history shows how responsible you've been in paying your bills and helps the credit card issuer decide how much credit to extend. If you're a full-time student, make sure to include that information on your credit application. Creditors often assign full-time students lower initial credit lines to start their credit files. If you have an excellent credit history, you may qualify for cards with rates as low as 0% introductory APR and a variety of reward cards.
Choosing the Right Credit Card
Credit should be your servant and not your master! Smart consumers comparison shop for credit cards, especially with today's wide array of choices. Before you accept the 'pre-approved', 'limited time' offers you receive in the mail, consider all of your options and how you plan to use your new credit card.
Here's some common ways to get started:
1. One way to show a potential lender that you're a good credit risk is by opening individual checking or savings accounts in your name. While a bank account will not affect your credit file, the account activity will demonstrate your ability to handle money responsibly. However, writing bad checks or overdrawing your account are negative indicators to lenders and do damage to your credibility as a good credit risk.
2. Apply for a department store and gasoline credit card, which are generally easier to obtain than major credit cards such as a Visa, Mastercard or Discover. Pay it off every month to show that you can responsibly handle money. If you must carry a balance, you must pay your monthly bill on-time.
3. Another good way to establish a good credit history is to apply for a small loan or line of credit from your local bank. Repay the loan promptly and on-time to build a positive history and earn a good credit rating. Increase your chances of getting the loan you're applying for by coming up with a large down payment.
4. If you don't qualify for a loan on the basis of your own credit file, consider asking someone with an established credit history to co-sign your application. To get a loan without a co-signer, you must be at least 18 years old and have a steady source of income. If you fail to repay, the co-signer promises to do so on your behalf.
Qualify for Your First Credit Card
If you are at least 18 years old and have a regular source of income or savings, you're on your way to qualifying for a credit card. But you'll still have to demonstrate that you are a good customer. The proof is in your credit history, which lists the amount of credit you have received and how faithfully you've paid it back. If you've financed a car loan or other purchase, you probably have a record at a credit reporting bureau.
Your credit history shows how responsible you've been in paying your bills and helps the credit card issuer decide how much credit to extend. If you're a full-time student, make sure to include that information on your credit application. Creditors often assign full-time students lower initial credit lines to start their credit files. If you have an excellent credit history, you may qualify for cards with rates as low as 0% introductory APR and a variety of reward cards.
Choosing the Right Credit Card
Credit should be your servant and not your master! Smart consumers comparison shop for credit cards, especially with today's wide array of choices. Before you accept the 'pre-approved', 'limited time' offers you receive in the mail, consider all of your options and how you plan to use your new credit card.
