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[B947]Build Up Your Credit

by Stephanie Foster, Ste

There's nothing wrong with getting a credit card when you're in college. It may even be helpful if you need just a little time to pay for you books and necessities. But many students just can't handle it.

Credit card companies often have relaxed requirements for students. This is because they know that if they can get you as a customer as a college student, they can probably keep you for many years. They also know that many students run up high balances, and so will be paying for a long time.

In other words, it can be a bit risky getting a credit card while you're still a student. There will be temptations to abuse it. But this is one of the best times to establish your credit, when the requirements in order to get a card aren't quite so high as they may be later in life. The trick is remembering not to abuse your card.

That means no running up the bills. Sure, partying with your friends is fun and can add up fast, but how are you going to pay it off? If you can't pay off such things promptly, I don't recommend you use a credit card, even for convenience.

However, learning to use a credit card responsibly is a good idea. If you get one, go ahead and use it just a little. Not so much that you can't pay it off. Get a job if you have to.

What you're trying to do is show that you can be responsible for your credit card. This will help you to establish a nice credit score, which is very important at various times in your life.

A good credit score does more than help you to get good interest rates when you buy a car or a home. It can help you to get lower car insurance rates. Yes, many car insurance companies also look at your credit score. So do some employers.

Despite the "easy money" feeling some people get from having a credit card, there are some definite risks to owning one. It's easy to go overboard and to spend more than you can pay off easily. But if you can learn to manage your money well early on, including a credit card, you will have skills that will help you throughout your life.

Building credit can be a chore if you have little or no financial history. The first thing creditors want to know when you apply for a loan is what sort of credit history you have, and they will assess your credit report or credit score to probe your past. How can you establish credit if you have none? If you have limited credit history, it can make it hard or nearly impossible to obtain a loan.

Here are a few tips that could help you on the path to building a solid financial record.

Open a bank account. Make a habit of using your bank accounts regularly by putting away money for an emergency and by paying your monthly bills by personal check. It is a small start, but these are financial transactions and they will help you build a credit history. Be aware that writing bad checks will offset the purpose of having the checking account, so use the account sensibly.

Be prepared to wait. You should use your savings or checking account and secured charge card for a year or so, making routine payments. In time, you will build a credit score that should earn you the ability to get better credit card accounts and small loans. Waiting can be hard, but building any kind of credit score takes time.

Check your credit report. You can receive a copy of your credit report for free at annualcreditreport.com. Make sure that the information on the report is OK, and search for errors. It has been estimated that almost a quarter of all credit reports have errors; if you have another individual's debt recorded in your name it could reduce your ability to obtain a credit card or loan for years.

Obtain a secured credit card. A secured card is one that has a limit that is guaranteed by a cash deposit. The risk to the card-issuing bank is modest, as they have your money on hand in case you do not pay. Be sure that your bank will give information about the card and your use of it to the credit reporting agencies. Secured credit cards tend to have higher fees and rates than traditional cards; you don't want to use one if it isn't going to help you in any way. A card with a limit of as little as $100 could be useful if you use it frequently and pay your bill in a timely manner each month.

Establishing credit takes time and effort, but it is well worth it.

Article Source : Interest Rate Car Loans

About Author

Both Stephanie Foster & Charles Essmeier 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.

Stephanie Foster has sinced written about articles on various topics from Credit Cards, Shopping and Pets. Stephanie Foster blogs at about credit related issu. Stephanie Foster's top article generates over 823000 views. to your Favourites.

Charles Essmeier has sinced written about articles on various topics from Free Credit Report Score, Mortgage and Cars. . Charles Essmeier's top article generates over 49500 views. to your Favourites.