Getting credit isn’t easy. You can thank greedy Wall Street bankers and mortgage brokers that triggered a financial crisis and real estate meltdown for that. These days people who are just starting out face a tougher credit environment than people in their shoes just a couple of years ago. It is hard to get ahead when you’re behind. Having no credit history could be your hardest thing. You are an unknown risk whenever you don’t have any credit. Credit will be hard to get for you.
Trying to set up credit with personal responsibility
”What came first” is the credit question. Was it really the chicken or the egg? Without credit, how do you get credit? Helium.com reports that young individuals new to credit generally need a co-signer to get either a credit card or a bank loan. This works out great if you easily demonstrate responsible credit handling. You’ll want credit inside your own right faster or later. This means always making payments on time. Late or missed payments will hurt the credit score of the co-signer. If you got your credit card with help from your co-signer, it is important. Always clear the balance in full each month and never pay interest. If you can’t afford something, don’t use your credit card.
Secured credit cards
If you have to establish credit and a co-signer isn’t accessible, rent an apartment and pay all your bills on time. Solid payment records on anything you do will make a difference. Then try a secured credit card. Getting credit might only be done by a secured credit card. A secured card calls for you to give a cash collateral deposit that becomes the credit line for that account. So you can spend $ 500 if you put in $ 500. You might be able to add to the deposit to add more credit, or sometimes a bank will reward you for good payment and add to your credit line without requesting additional deposits.
Don’t get burned by buying around
A secured credit card is like prepaid debit cards with one big difference: secured credit cards can help you build your credit. As outlined by Wallet Pop, when these cards come with annual fees, some are available for only $ 25 or $ 30 per year. There isn’t a reason to pay this so shop around. Also, be sure to read the fine print about any of the other fees to make certain you are not getting suckered into a “fee harvesting” card intended to nickel and dime you to death instead of help build your credit.
Citations:
helium.com
helium.com/items/1878270-best-ways-to-establish-credit
bankrate.com
bankrate.com/finance/credit-cards/10-questions-before-getting-a-secured-credit-card-1.aspx
wallet pop
walletpop.com/blog/2010/06/29/choosing-the-best-credit-card-for-your-age/
