RSS FeedUnderstanding and Establishing Credit
One of the scariest words in finance is hands down Credit, especially when you don’t have any at all. Credit doesn’t have to be scary at all. In fact if you are starting with a clean slate you have an advantage over those who have negative credit. The key to credit is to remember this simple statement that so many people forget all to easily: you can work all your life to maintain good credit and in no time at all destroy it. Be very conscious of every financial decision you make and know how it will or won’t affect your credit. Always monitor your credit. You can join an online site for full 24 hour access to your credit reports usually for twenty dollars a month or less. These sites are not necessary because you are able to request your credit report at least once a year through all three bureaus, as well as every time you are declined for credit because of something on your credit report. These sites do however, usually offer user friendly ways to dispute inaccuracies, and other credit related informational topics for their users.
Start with a bank account. Although having a bank account doesn’t affect your credit score, it does assist creditors when you are applying for credit. Do not job hop. Creditors don’t want to take a chance that you are going to leave your job and be unemployed. Your credit does report your job history so manage it well. Just as employment matters, so does residence history. It helps put creditors mind at ease to see that you can hold down residency. Your report will show whether or not you rent or own. Owning your own home either solely or with a spouse is ideal. Having your name on utility bills doesn’t usually affect your score. If, however, the bills go unpaid and end up in collections, they will greatly affect your overall score.
Department store shopping cards will usually be the first suggestion out of a financial planner’s mouth. Although these cards are not usually suggested due to the ongoing interest rates, they can be fairly easy to obtain and once activated, will begin reporting to the credit agencies immediately.
If you are unable to obtain credit through department stores and the credit card companies directly, you still have an option. Visit your local bank and take a secured loan. Basically you can take out a loan for $500 once you have purchased a CD for $500. There are other options for doing this, but it can be a sure fire way to start reporting positively to the credit bureaus.
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