If you are just beginning your adult life you may be wondering "what does establishing good credit have to do with me?". As it turns out, a lot. Your credit score and history will follow you to many places as you live your life. Mortgaging a home will be impossible without it as will be purchasing a vehicle unless you can pay cash for it. Not only these parts of your life will be affected, however. Employers are also interested in your credit score as a way for them to gauge your level of responsibility in life. Many employers feel that if a person is responsible in taking care of their finances that person will also be a worth employee.
Getting started may seem like a daunting task if you have never had a loan before, but begin with very small steps. Go to your local banking institution and discuss your plans with them. Credit unions are great for this. Explain your position and let them know that you are not asking for the world on a platter. Ask if you can apply for a very small loan with them so that you can begin to prove yourself in the financial world.
Make sure that the institution you begin to work with is one that reports to the major credit bureaus. Ask them right up front if they do. You need this to be reported so that future lenders can see that your credit worthiness, and that you are living up to your promise to make your payments on time.
Now that you have obtained a small loan and are making your payments, keep track of the credit report you are establishing. You are entitled to one free credit report annually. Monitor the report and make sure there are no errors, that the report is not getting you mixed up with someone else and that the dates and payment amounts are correct.
Do you have a checking and savings account in your name? If not, open them and begin using them, making regular deposits and making sure you don't bounce any checks. As you progress with your credit history and go on to apply for larger amounts, these accounts will help to show future lenders that you know how to balance your budget and keep track of your incoming and outgoing expenses.
There is nothing more important here than paying your loan payments on time. Don't let late payments tarnish your report. Any late payments can stay on your history for as long as 7 years! You have worked too hard to let this happen. Use a calendar to remind you of your payment dates, or better yet, look into direct payment plans where the money is taken directly out of your account so you never have to worry about it getting lost in the mail.
When you have paid off your initial loan, you will want to apply for more credit. This may be in the form of a larger loan, or a credit card. But if you get a credit card, don't max it out. Keep your balance at about thirty percent of your credit allowance. And look for a card that has no application fees and a low as possible annual fee.
As you begin establishing good credit you will find that it gets easier as you prove yourself a mature and responsible adult. It can be the answer to realising your dreams and living the life that you desire. With a few guidelines to adhere to, you will be on your way to financial security.
Getting started may seem like a daunting task if you have never had a loan before, but begin with very small steps. Go to your local banking institution and discuss your plans with them. Credit unions are great for this. Explain your position and let them know that you are not asking for the world on a platter. Ask if you can apply for a very small loan with them so that you can begin to prove yourself in the financial world.
Make sure that the institution you begin to work with is one that reports to the major credit bureaus. Ask them right up front if they do. You need this to be reported so that future lenders can see that your credit worthiness, and that you are living up to your promise to make your payments on time.
Now that you have obtained a small loan and are making your payments, keep track of the credit report you are establishing. You are entitled to one free credit report annually. Monitor the report and make sure there are no errors, that the report is not getting you mixed up with someone else and that the dates and payment amounts are correct.
Do you have a checking and savings account in your name? If not, open them and begin using them, making regular deposits and making sure you don't bounce any checks. As you progress with your credit history and go on to apply for larger amounts, these accounts will help to show future lenders that you know how to balance your budget and keep track of your incoming and outgoing expenses.
There is nothing more important here than paying your loan payments on time. Don't let late payments tarnish your report. Any late payments can stay on your history for as long as 7 years! You have worked too hard to let this happen. Use a calendar to remind you of your payment dates, or better yet, look into direct payment plans where the money is taken directly out of your account so you never have to worry about it getting lost in the mail.
When you have paid off your initial loan, you will want to apply for more credit. This may be in the form of a larger loan, or a credit card. But if you get a credit card, don't max it out. Keep your balance at about thirty percent of your credit allowance. And look for a card that has no application fees and a low as possible annual fee.
As you begin establishing good credit you will find that it gets easier as you prove yourself a mature and responsible adult. It can be the answer to realising your dreams and living the life that you desire. With a few guidelines to adhere to, you will be on your way to financial security.
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