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Establishing Credit - What You Need To Know Part 2
In my previous article "Establishing Credit - What You Need To Know Part 1" I discussed the need for a good credit history and what lenders were looking for prior to loaning an individual money or additional funds based on their credit history. This article will go into the necessary steps someone needs to take in order to initially establish their credit history. The first and easiest step is to show any potential lenders that you actually know how to handle money. This can be easily achieved by opening either a savings or checking account (opening both would be better) in your name. As you successfully use these accounts you will prove to a lender that you can handle money and are ready for the increased responsibility that comes with having additional credit. Another means of establishing credit actually involves borrowing funds and then paying them back over time without any late payments. Although this method to establishing a good credit history is quicker and very effective when compared to the long drawn out procedure of making withdraws and transfers to your savings/checking account it comes with the drawback of the cost associated with obtaining the loan in the first place. If you're having trouble obtaining a loan but still wish to use this method to establish your credit history then seek out a friend or relative with known good credit and have them cosign on a loan for you. Remember this is asking a lot from that individual so please don't abuse the trust they put into your ability to repay the loan on time and without problems. Other popular methods of establishing credit include applying for credit cards or department store cards. Again, although this method is very effective for establishing credit (provided you make your payments on time) it could be costly if you start to carry a balance on these cards. Always check to see that there is no annual fee and make sure you are aware of the financial charges imposed against you if you should decide to carry a balance on any card you have. Obviously the best plan is to always pay your balance off in full each and every month. This allows you to build your credit history and avoid being buried under a mountain of high interest debt. A word of caution - identity theft and credit theft is a very real and dangerous problem in today's society so you want to make sure you do everything you can to protect your newly established credit history. Always make sure to secure your credit cards and never let anyone obtain your personal identification number (PIN). If you have numerous credit cards avoid carrying them all at once. Instead just carry the card you normally use and file the rest away in a safe place. Always make sure to keep information such as contact numbers and account numbers of the cards you have been issued. This will help you if you ever lose or have a card stolen. If you find that you have lost a card or had it stolen simply contact the company that issued the card and report your situation. If the card hasn't been used prior to your reporting it lost or stolen then you're relieved of any future financial liabilities against the card. If it has been used prior to your reporting then you may be held accountable for up to $50. Finally, always be cautious about who you give your account number to and remember to keep all receipts and records that are associated with that particular card. Establishing a good credit history isn't that difficult if you start small and work your way up. It will take some time but if you do it right it will definitely pay off in the future and allow you the opportunity to obtain credit for the items you really want to purchase or may really need. Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com He provides more debt relief, consolidation and free credit counseling information that you can research in your pajamas on his website. MORE RESOURCES:
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GOOGLE SEARCH Credit Traps Snag Consumers Nearly 20 years ago I worked for a small consumer advocacy organization in Washington, DC. Each week we received sacks full of mail from consumers across the country requesting our list of credit cards with low interest rates and no annual fees. Secured Credit Cards- Consumer Tips Whether you have no credit or damaged credit, secured credit cards are a good tool for building a good credit history.Several months ago Tom, a member of CreditBoards. 10 Ways of Reducing the Risk of Identity Theft 1- Check your credit report regularly2- Secure personal information in your home, especially if you have roommates, employ outside help, or are having work done in your home.3- minimize the amount of information someone can steal, do not carry extra credit cards, your Social Security card, birth certificate or passport in your wallet or purse, except when needed. Finding and Applying for the Right Credit Card Offer Online Anywhere you go online nowadays, you will see a multitude of ads for credit cards. Some offer low interest rate for an introductory period, or bonus frequent flyer miles while others offer real discounts on new vehicles and equipment. 4 Steps You Can Take If Your Online Credit Card Application Has Been Refused Help! I've Been Turned DownYou received an envelope in the mail with a great offer for a low interest credit card. You read all the details, even the boring small print and decided that this card fit your needs to a tee. Credit Help For Renters And Others On The Horizon Sue is a homeowner and pays her mortgage and other bills on time like a good credit consumer. Sue's on-time mortgage payments are reflected in her credit score profiled by the three major credit bureaus; Equifax, Experian and Trans Union. How Do I Establish A Good Line of Credit? A line of credit, roughly defined, is the amount of credit that can be given to a borrower from a lender. Usually a contract or note of promissory is exchanged between the two parties, in which both parties agree to the line of credit amount, as well as the annual interest due to the lender at the end of the term. Which Citi Mastercard Is Right For You? You've decided to apply for a Citi MasterCard, but with so many different cards to choose from, how do you know which one is right for you? Here is a brief guide to the different types of MasterCard available from Citibank.A great MasterCard program is the Citi Platinum Select Card. How Does a Creditor Determine Whether to Grant You Credit? Credit 101How does a creditor determine whether to grant you credit? For many years, creditors have been using credit scores and credit scoring systems to determine if you'd be a good risk for a loan or credit card. More recently, credit scores have been used to help determine what rates you pay for insurance. Inflexible Friends and Plastic Assets, Why Money isn't Buying Love Anymore Consumers reject financial advice in favour of financial frivolityIt would appear that even though their "friends" aren't as flexible as they used to be, consumers are still stretching their credit cards beyond the comfort zone.The vicious circle of debt manipulation involving banks, consumers and commercial credit companies is putting consumer spending under strain, as funds begin to dry up. How To Use Your Credit Card For Ultimate Financial Advantage Using a credit card wisely is an important step in building a great credit rating. If you're trying to re-build your credit or if you're young and just starting out, pay close attention the next time you receive a new card offer in the mail or online. Free Credit Reports Now Available From the FTC The Federal Trade Commission (FTC) has set up a new website (www.AnnualCreditReport. Stop Struggling Because Of Poor Credit And Improve Credit Rating Now Did you apply for a personal loan only to be turned down by a bank or lending institution? Like most people there is always a need to borrow money to buy a car or to renovate a home or even to get a student loan. There are many reasons why people need a loan and lenders turn people down from a loan application based on ones credit rating and credit score. Minimize your Risk for Identity Theft Identity theft is the fastest growing crime in America. According to the Federal Trade Commission, the number of identity theft incidents reached 9. Credit Help for Real Estate Financing: Credit Scores When you buy real estate, lenders run all of the "big three" credit bureau reports. Each credit reporting agency lists your credit history as supplied to them by the individual lenders and includes governmental records. Credit Card Disclosure Table - Do You Understand It All? In addition to the APR (annual percentage rate) and the finance charges, most credit cards have a number of 'fees' associated with their use. Some fees are unavoidable with a particular card (like an annual fee or a program participation fee), while others are triggered by certain circumstances. Identity Theft - Dont Think You Are Immune As identity theft becomes more prevalent, the need to regularly check your credit report is veryeasy to see and understand. Two big headlines in the news recently point to how closely tied yourcredit report and identity theft are. Saving Money: Quick Cash, High Cost I didn't think it was possible. But it is. Useful Tips On Avoiding Credit and Charge Card Fraud Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways. Credit Cards - The Basics How Lenders Operate - And How They'll Make a Tidy Fortune from the UnknowingCredit card companies might seem like immensely clever, money making enterprises that exploit every loophole to maximize the interest payments - and profits - they are taking from you every month. Nothing, however, could be further from the truth. |
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