Growing up, I never realized how difficult it could be to get approved for a credit card--I thought the process was simple. But when I began thinking about applying for my first credit card the summer before my freshman year of college, the thought had finally occurred to me: "Hey, how am I supposed to get my credit card applications approved when I don't have any credit history to start with?" Thankfully, there was a lot of helpful information online about credit cards for college students and young people looking to establish credit history.<br>
First thing's first. You need to have a bank account. Since it doesn’t require any credit to open a checking or savings account, it also doesn’t get reported to the credit bureaus in order to establish credit. However, your bank account history can be a decisive factor when lenders consider giving you a credit card or loan for the first time. In fact, don't even fill out any credit card applications unless you have a bank account. When you have active bank accounts in good standing, you are showing that you can manage money.<br>
Assuming you have a bank account, it's not a bad idea to begin your quest for credit at your own bank. If you have a history with your bank, your chances of obtaining a loan or credit card through them are a lot better than if you're just coming to them off the street. They already know you and value your business. This existing relationship should carry some weight when seeking credit--even if you're just starting out with a small credit line. This little bit of credit is your path to more credit from major lenders at a later time.<br>
Another way to establish credit is buy applying for one of the credit card offers from one of the many retail stores that offer them. This was how I got started--my first credit card was for Belk. Though their interest rates are usually quite high, retail credit cards are usually much easier to get approved for than major credit cards. If you do get one of these cards, use it wisely--not as a means to free money, but as a means to establish good credit.<br>
When all else fails, your last resort to building credit is a secured credit card. When a credit card or loan is secured, it means that there is an asset linked to the account that the lender can take if you fail to make payments. In the case of credit cards, this "asset" is a deposit that you make into a bank account. You essentially pledge the money you deposit in order to secure the credit card. For example, you could obtain a secured credit card with a $500 limit if you put a $500 deposit in the bank that is linked to the card. If you fail to make your credit card payments, your deposit goes to the bank.<br>
Establishing and maintaining a good credit history is a process that lasts most of your adult life. There are no shortcuts that can take you from zero credit to a perfect credit score in a matter of months or even years. Your credit score is based on many factors such as payment history, length of time you’ve had credit, how much credit you have compared to how much you've used, etc. So, while it is important to establish an initial foundation of credit, it is even more important to maintain good credit. This means using low or 0 apr credit cards, regularly reviewing your credit report (and correcting any errors therein), making your payments on time, and keeping your balances as low as possible.
About the Author:
Written by Kacy Suther. Find credit card offers and credit card applications for low interest and 0 APR credit cards online at credit-card-depot.com .
Sat, 24 May 2008 11:46:36 - 100%
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