Having good credit paves the way for prosperity in today’s world – It allows you to buy a home or a car at a reasonable interest rate, and to take advantage of opportunities when they come along.
But how does a person just beginning their “financial life” get that good credit?
First, develop a little patience, because building a good credit report takes some time. Then, open a bank account. The bank account won’t count toward your credit score, but when you apply for credit, most applications will require your bank account numbers.
Now, the first step is gaining your first credit account – with a creditor who reports to the credit bureaus. Not all companies report, so this is something you need to ask.
Getting a card from a department store or a gas company is often easier than getting your first credit card from a bank – but do be sure that they report. Then, after you’ve used the card responsibly for a few months, you’ll be in a better position to apply for a bank card.
Be sure to read the requirements before you make application, because at this point in your financial life, you don’t want to add a lot of credit inquiries. Only apply if it appears that you can be approved based on your income, employment, etc.
If you can’t find such a card, consider a secured card. This card will have a limit based on a deposit you’ve made into a savings account – so you’re actually borrowing your own money. But that’s OK – because by borrowing it in small increments and paying it back promptly, you build a credit rating.
Once you have a credit card, the most important thing is to use it, use it sparingly, and make every payment on time. This begins to build your financial reputation – which is the single most important part of your credit history.
If you are denied credit, do ask why. If you’re turned down, it could be because there is already something negative on your credit report.
And, if you have not done anything yourself to cause that negative report, it means there’s an error. If that’s the case, you need to take steps to correct the error and see that everything reported about you is accurate.
Because errors are so common – about 70% of all reports have them – you should get your free credit report and check for accuracy before you even apply for your first credit account.
FreeCreditScorequick.com your resource for free credit report offers and the most current information regarding credit news. We also provide free tips and techniques to repair your credit for free. “Remember your credit report and credit score is more important than ever now.”