Establish Credit

To establish credit early is vital for your future. Like it or not, credit gives you buying power. So, establish good credit ... start young, you often need about 1 year of credit history before you apply for a major loan and 2 years to apply for a mortgage.

You may be just fresh of the boat, like I was ...

or got out of the bankruptcy ... and must establish credit anew

or just got out of nasty divorce and your ex-spouse cleaned you up nicely and all you have is your underwear ...

or suffered a devastating identity theft and fighting to get your name and credit cleared ...

or you are one of those who pays with cash for everything, never have had a credit card and thought that banks will love you and ... oops ..., banks want to know how you handled a previous debt before lending you any money ...

Establish credit - here is what you can do

If you are student in college, apply for a student credit card. They usually have a low initial credit limit, something around $500. Use them to buy books, supplies, food, smokes, beer, etc.

Another way is to get cards offered by gas stations, appliance and furniture stores. Shell, Mobil, Best Buy, Wicks Furniture and the likes are usually easy going and may extend you a credit even if you don't have a credit history or have some problems.

Finally, you can apply for secured credit card. It works basically like a debit card - you deposit a $1,000 on this card account and you can use it. You can get it even if your credit is reasonably nasty. That is probably the best way to establish credit.

After getting your fresh credit lines, you must keep them agile and robust. Carry a balance to display some activity and newly acquired financial discipline. Try not to carry more than $100 - 200 or so. The most important thing - don't be late, always pay on time and be consistent from month to month.

If you behave responsibly for a year or so, then you will see a marked improvement in your credit, or a nice beginning of your credit history.

To establish credit - see more

Student credit card
Secured credit card

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