Building credit for the first time isn't as hard at it seems. When people think of their first credit card, they think they have to apply for a million cards before a card with a high interest rate approves them. These are the people that don't do their research and pay in the long run. Getting your first card and building your credit for the first time couldn't be any easier! I'm going to show you today on how you can start building credit for the first time. By the time you read this article, you'll feel like you're an expert in charge.
Start at the bank first - The first thing you're going to want to do is look over on how you store your money. Do you store it in a shoebox? Do you store it at a bank? Or do you save at all? Credit card companies love people who have checking and savings accounts. The first thing you're going to want to do is go to your local bank branch and apply for a savings and checking account. Most of the times, it only takes a few dollars just to open up. IT's not a hassle at all! Once you do this, you'll want to proceed to step 2.
Let's look at our demographic ? I want you to ask yourself this question, ?Am I a college student?? If you answered yes, that's great!
If you answered no, you're going to have a little bit more work to do.
If you're a college student, the credit card process is going to be a lot easier. Credit card companies issue cards out to college students only.
These cards are built for the person looking to build credit for the first time. Credit card companies look at students as a great way to build up an everlasting relationship. They are hoping that when you do apply and get accepted that you will use their card from here on out.
If you're not a college student, that's fine as well. People generally looking for their first card that's not going to college will want to apply for a department credit card. These credit cards are usually found at places like JC Penny or Sears. These cards are generally easier to get and will report to your credit bureau. This is a great way to build up your credit as well.
Building your credit isn't hard at all. I just gave you the two biggest steps you need to take. Step one is completely optional but if you proceed and do sign up for a bank account, make sure that you tell the credit card companies on your application. This will increase your odds of being approved. If you don't want to do it, still apply and if you don't get accepted, make sure that you sign up for a savings account and try again. When it's time to look for that card, make sure you do your research so that you don't make the mistake of applying for a card you don't need!
Almost everyone needs credit. If you are renting an apartment, applying for a mortgage, applying for a car loan, or even applying for a job, you will need some type of credit history, as credit decisions are often based on your prior use of credit. If you are a young adult or are still in college, you have a unique opportunity to start building a solid credit history that can serve you for many years to come. By carefully building credit and avoiding credit mistakes, you can insure a strong credit history.
Although you may not have credit yet, you should try to get a copy of your credit report for the credit bureaus, so you can check if there is any inaccurate information. Additionally, you will want to make sure that you haven't been a victim of identity theft, with someone using your name and trashing your credit. The three bureaus are: Equifax, Experian and Trans Union, and they can be contacted online, as well as by phone and mail.
One of the first steps to building credit is to open a checking and a savings account in your name. You may already have an account, and it is something many lenders will look at, as it show stability. If you only have a checking account, you may also want to open a savings account as well, which can be used as collateral for a secured loan, if necessary.
You should also have as many bills as you can listed in your name, such as your telephone and cellular bill. Make sure you pay all of your bills on time, as this is a major factor in your credit score. If you can, try to establish the accounts in your name only.
The next step would be to get a credit card. If you are a student, you may be bombarded by credit offers on campus. Its a good idea to get one credit card, so if you find one available with low interest rates and a low or no annual fee, you may want to apply. Student credit cards are mainly designed for people with no prior credit, and they accept a large percentage of applicants. However, don't get more than one card, as its too easy to start running up balances, and it also looks better for your credit if you don't open a number of accounts in a short period of time.
If you are unable to get an unsecured credit card, you still have some options to establish credit with a credit card. If you have a savings account, your bank may let you apply for a secured credit card tied to your savings account. Over time, once you make regular on time payments, you should be able to qualify for a non-secured card. You should also make sure your payments are reported to the credit bureaus, otherwise you won't be building your credit history.
Another option is to get a co-signer. If someone has good credit, that will extend it to you, by putting their name as being jointly responsible for your limit on your card. This will help your credit history if you pay off the loan in a responsible way. If you do have a co-signer, you have a serious responsibility to make sure your payments are timely, or you will hurt their credit as well as your own.
With some foresight, it can be relatively easy to start building credit. Once you get a credit card, its important to keep the balance low, and to make regular, on time payments. The card should be used as a tool for credit building, not as a additional spending money. Over time, you credit will start to look better and better.
Both Tom Tessin & Amy Wells are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Tom Tessin has sinced written about articles on various topics from Mileage and Fuel, Education and Finances. Find and more of Tom's work at FINDcollegecards.. Tom Tessin's top article generates over 673000 views. to your Favourites.
Amy Wells has sinced written about articles on various topics from Shopping, Auto Insurance and Motorcycle Tips. Amy Wells writes about consumer finance. ? Get insider tips on getting a bad credit loan or credit card at:. Amy Wells's top article generates over 22200 views. to your Favourites.