| I remember back when I was 18 and completely | | | | appreciate your diligence down the road. |
| oblivious to the concept of credit. It seems like eons | | | | A warning for the Beginner: Be careful with your |
| ago! If only I had known then what I know now about | | | | spending! It may seem exciting when you first get a |
| credit. Hopefully, this short guide will be able to give you | | | | credit card with a $1,000 limit, but it can be very |
| some ideas on how you can build a solid credit rating... | | | | dangerous. It is very tempting to pretend that your |
| even if you have to do it from scratch!! | | | | credit card represents money that you have in the |
| Everyone has to start somewhere, whether you are | | | | bank. My advice, don't ever spend more than you can |
| 18 like I was, or even 30, there is no better time than | | | | pay off in that same month. And if you aren't able to |
| the present to start thinking about your financial future. | | | | pay off your entire balance in a month, pay more than |
| Chances are, your credit score will come into to play | | | | the minimum requirement. This will help give you a slight |
| during some point down your financial-life road. And | | | | boost. |
| when that time comes, you had better have some | | | | Moving on... After you have had your bank issued |
| concept of credit and how it can help you, or else you | | | | credit card for a while, and feel that you can handle |
| might find yourself unable to qualify for much of | | | | the responsibility, try moving onto one of the major |
| anything. | | | | credit card companies. There are many out there. Try |
| First of all, if you are starting from scratch, don't worry! | | | | to find one with the lowest interest rate and no annual |
| It will take some time, but eventually you will be able to | | | | fee. Don't apply for too many at once! Each time you |
| qualify for the bigger things like a car or a mortgage. | | | | apply for a C.C., the company will run your credit to |
| The first thing you need to do is establish your credit. | | | | see if you will qualify, and to see what your spending |
| The easiest way to do this is to get a credit card | | | | limit should be. One or two should do just fine. If you did |
| issued by your bank. Chances are, the bank already | | | | well in handling your bank C.C., you should have no |
| knows you and won't have as much of a problem | | | | problem qualifying. A company I like is Providian; mostly |
| with issuing a card to one of it's current clients. If you | | | | because they give you a brief snapshot of what your |
| don't already have a checking account, get one! There | | | | credit score is each month, and as a beginner, you will |
| are a ton of great banks out there that issue free | | | | want to start paying attention to what your score is |
| checking accounts with check cards to new | | | | and how it can be effected by your different spending |
| customers. But take note! A check card or ATM card | | | | habits. |
| isn't the same as a credit card! With these you are | | | | After a while of responsible spending with your new |
| simply withdrawing the money that you already have | | | | credit cards, your score will really start to move. You'll |
| in your checking or other accounts. A credit card is | | | | notice multiple credit card offers from many |
| very different... | | | | companies mysteriously start showing up in the mail. |
| A credit card is actually a right given to you by your | | | | Your score will probably be somewhere around |
| lender to borrow a set amount of money from them. | | | | 600-650. This isn't a bad credit score, but it could be |
| You might be shocked to find out that the only card | | | | better. Most likely, it is around this range because of |
| you can get when you are first starting out comes | | | | your lack of credit history. As you can see in our |
| with an outrageous interest rate. Sometimes as high | | | | Credit overview section, length of credit history |
| as 15-25%. But don't fret... as long as you pay off your | | | | accounts for around 15% of of your overall score. |
| balance every month, those interest rates will be | | | | Another factor that comes into play with your score is |
| easier to swallow, and you will eventually to be able to | | | | the type of credit you have been issued; approx.10% |
| qualify for a card with a much lower rate. | | | | of your score relies on it. You can only build so much |
| A note for the beginner: In order to have a good credit | | | | credit with your credit cards. Eventually lenders will like |
| score for life, you need to develop a personal goal... | | | | to see some other forms of proof that you are able |
| never, EVER make a late payment for anything. I was | | | | to be responsible with monies borrowed. This is where |
| lucky when I first started building credit to have a | | | | a personal loan, or a car loan can be helpful. Lenders |
| mother that ruthlessly instilled in me a healthy respect | | | | view this as a different kind of borrowing than from |
| for the power of paying bills on time. It not only builds | | | | the credit card companies. In terms of building your |
| your credit quickly, but makes you a good steward of | | | | credit, these types of loans are great. |
| your finances. There were times when I owed money | | | | After that, you should see a significant leap in your |
| for a credit card bill, and I was so deathly afraid that | | | | credit score, and should be able to move onto bigger |
| the creditor would take the bill to collections and ding | | | | and better things like a home mortgage loan! Just |
| my credit, that I stooped to borrowing money, just to | | | | always make sure you remember the fundamentals: |
| make sure my credit record stayed clean! I know that | | | | always pay your bills on time, and never spend beyond |
| seems a little crazy... but trust me, it is extremely | | | | your means. With these tips in mind, you will be on your |
| important to pay all of your bills on time, even if you | | | | way to making sound financial decisions for life. |
| have to go out of your way to do it. You will | | | | |