Okay, so you just turned 18, and you want to buy a new car.
You go down to the new car dealership, pick out that shiny
new vehicle, fill out an application for credit, and they
tell you, "I'm sorry, but you have no credit history".
Unless you are Paris Hilton, and your father gives you
about 20 million dollars on your 18th birthday, then you're
going to have to establish your credit the hard way: on
your own. So how do you establish credit when you have no
credit? The answer: credit cards. Credit cards are the
easiest and simplest way, for anyone to establish credit if
they have none.
What you need to do first, is start applying for gas credit
cards. It is extremely easy to get approved for a gas
credit card. Gas credit cards usually have very low credit
limits, and this is why it is easier to get approved for
one of them. Once you get approved for one or two of these
gas credit cards, then use them, and pay off the balances
on time for several months. This will start the process of
establishing good credit.
Next, apply for a department store credit card, these are
the second easiest credit cards that give approval to those
individuals with little or no credit. Once again, charge
items, and then pay the balances on time for several
months. If you don't charge items on the department store
credit cards, then you're not really establishing a good
payment history. So don't be afraid to use them. Just be
sure you don't get crazy and come home with an $8,000.00
flat screen television set, on your first purchase.
Proceed slowly and with caution. Remember Rome wasn't
built in a day, and neither is establishing good credit.
One of the most common mistakes that young adults make, is
to charge up too much credit debt, too fast. Don't get
stuck into a credit card quagmire. Only charge what you
can afford..
Now that you have established a little credit, it is now
time to go for the major credit card. You can start by
applying for one major credit card. This is only
recommended if you have a steady income, and if you have
been charging and paying off your department store and gas
credit cards on time. Don't apply for multiple major
credit cards, because this makes you look desperate.
Applying for multiple credit cards at one time, is a major
red flag to the major credit card companies, which tend to
view multiple credit card inquiries on your credit report,
as a sign that you are in financial trouble. Try to go for
a low credit card limit amount. Some credit card companies
offer no-limit credit cards for an annual fee, but you're
not ready for those cards yet, as they require a
substantial income and an excellent credit history. If at
all possible, try to get a major credit card with very low
interest and no annual fee. Charge items on this credit
card and then pay the balance off, on time, for several
months. Again, remember no $8,000.00 flat screen
televisions yet.
After say a year or so, of paying the gas, credit, and
major credit cards off on time, you will probably be
flooded with pre-approved credit card applications in your
mail box. Just remember never to get over-extended. Apply
for one credit card every six months to one year. It is
crucial to keep in mind that your credit follows you
wherever you go, so if you establish good credit, then you
will be opening doors to great possibilities, however, bad
credit, will close doors to great possibilities.
Once you have established good credit, then always remember
to pay your payments on time. Hopefully, one day in the
future, you will be able to drive to the store in your
brand new car, just like Paris Hilton, and buy that
$8000.00 flat screen television set, with no help from your
rich father, and all thanks to credit cards.
----------------------------------------------------
Bryan Pringle, Ph.D., has written many articles on the
credit industry, and is the webmaster of websites offering
news and information regarding credit cards. For more
information, please visit:
http://www.apply-forcreditcards-online.com
No comments:
Post a Comment