It’s hard to get by these days without having credit to ease the way but you can build it solid early and it will serve you well. A good credit rating is as good as having cash stashed away on deposit as it saves you money. If you think credit is all about borrowing and debt think again. Good credit counts and bad credit can cause big problems.
You can build your credit to save you extra payments on warranties and cut down on unnecessary insurance policies. It can treat you well when you make those big purchases of houses and cars. Credit built well will have the best credit cards in town knocking on your door offering you cash backs and air miles, free travel insurance and life cover.
Credit isn’t as widely offered as it was just a few years back. You probably don’t need to wade through piles of junk mail offering you credit incentives now. If you haven’t used credit before it’s a good time to start as it’s harder to get carried away with it now than it was.
The first place to start building credit is with your bank. If you already have a checking account and debit card set up they can be the best place to test the water and see if a credit card is forthcoming without any credit history. After all your bank is meant to want your business if you don’t pose a risk. If they turn you down because you don’t have the credit history you need they will probably let you have a secured credit card as they’ve nothing to lose.
You pay them a security deposit and use the secured credit card to establish an excellent payment record. Most likely you’ll need to bite the bullet and pay a fee as well but look on it as the last time credit will cost you. Before you sign up for a secured credit card try and get a commitment from the bank as to when they will let you change to unsecured credit as the last thing you want to do is carry on lining their pockets with pointless charges.
Be certain of two things. They need to report to the credit bureaus and you need the status of the card hidden, as oftentimes secured cards are associated with bad debtors. Once you’ve got the card use it monthly to build a pattern of regular use, pay it off in full every month, and within a year your star will be on the rise.
If you aren’t a youngster but not used to credit before, the chances are you’ve been paying lots of other regular bills, utilities, cell phone, or rent, so record these regular payments with the 4th credit bureau PRBC to give your credit a kick start. You pay all these bills which don’t get recorded on your credit file unless you pay late, so use them to your advantage.
Fair Isaac, the company that compiles FICO credit scores have a program in place which accepts the records these regular bills demonstrate and can help you obtain a mortgage. Build up your credit with this method as well as with the credit card or secured card to speed up the process of building your credit.
Once you have good credit protect it. Don’t rely on it but use it for its perks. These will be offered to you when your credit score is high so take advantage. After all, who needs to throw money away on high interest rates on home loans when building your credit well will ensure you the best deals?