CREDIT IN MINUTES
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If you would like to know how to establish credit, good credit that is, then read on. In this article we will look at the eternal Catch 22 situation involved with no credit history, which first step to creating a good credit history you can take today, and why a store card, being a good employee to your boss, and secured credit can all help you.
Establishing a good reliable credit history is not easy when you have none. Without a good credit history few if any places will be willing to give you credit, but without receiving credit you are in a situation where you cannot possible establish a good credit history.
It's the infamous Catch 22 situation; you chase your tail going nowhere, but there are ways around it. You have to make a start and know that you won't get a credit history overnight. It will take time and the sooner you start the sooner you will get there.
One of the best ways to start for anyone wondering how to establish credit is to open a bank account. You will need to maintain the account with incomings and outgoings on a regular basis. It doesn't need to be a lot of money, just enough to let anyone see that you are serious and capable of managing some money.
Start with a checking account at least. A saving account is a good idea too. Use the accounts regularly, though not unnecessarily. It has to be natural and not forced. If you have regular monthly bills to pay, then paying them through your bank by setting up payments would be a good idea.
Store cards are generally not a very good idea. You will find that they open up ways of spending money that you never imagined. They will offer you attractive discounts to lure you in, and then you will find yourself paying interest rates that resemble your grandmother's age. However, there is a way to use store cards to your advantage when you need to know how to establish credit.
Only take out a store card if the store reports to the credit bureaus. Ask them upfront and get an answer you can depend on. If they don't report your credit, then the card will be of no use to you. Don't go on a spending spree, or at least you don't have to. It will be best to keep the spending low, but what is more important is that you establish and maintain a good payment history with the store card.
Your history of employment is considered when your credit history is referenced. If you are constantly changing jobs, or worse, getting thrown out of jobs, then this will go against you. The more stable your employment history is the better it will be for you. If you have only had one or two jobs since leaving school or college, you will be seen as being more dependable and stable.
If all else fails, try secured credit. Most banks will do this. Simply put, you deposit, say $500 with the bank. They give you a credit card with a limit of $500. Your deposit of $500 covers the credit and you will lose it if you fail to make repayments
However, the question of how to establish credit is only served best by making timely repayments, thereby establishing a good credit history over time.
Credit in Minutes Tip #1
Stay on top of your credit report. Most credit reports contain errors. Make sure you check your credit report every year (you get one free credit report every twelve months) and if there are errors make sure to challenge them with the reporting credit agency. Credit agencies are required to investigate each and every challenge that gets reported.
Credit in Minutes Tip #2
Just because you qualify for all of those credit cards does not mean you should get them. A person with too many credit cards looks sketchy in the eyes of a potential creditor. Think of it this way: if a person is financially stable does he or she need ten different credit cards? Wouldn’t just one or two suffice?
Credit in Minutes Tip #3
The best way to raise your credit score is to make all of your payments on time. It sounds too simple to be true, but that’s all there really is to it. Staying out of debt and/or making all of your debt payments on time will keep your score up where it should be.