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Whether you're a homemaker, a
student, a businessman or a blue-collar worker, establishing
credit is necessary because, sooner or later, you are going to
want to purchase something on credit, whether it's a house, car,
or another major purchase. To establish and build your
credit, there are some simple ways to go about it.
Credit Cards
- Credit cards are
often issued by local or national banks, or
captive banks created for issuing particular
credit card brands such as Visa, MasterCard,
Discover or American Express. Credit card users can make
purchases up to a pre-negotiated credit limit from merchants who
support their particular credit card.
Restoring Credit
- If you have
found yourself in the position of restoring your credit to a
more positive place – don’t despair. It’s not as difficult as
you may be thinking, but it will take some restraint in your
buying and developing a budget that will work for you and your
family.
Protecting Credit
- In today's society, it is not your word or your character which
incites the most trust, it’s your credit rating. Without a good
credit rating, you can't open a checking account, rent a car,
get a credit card, buy a house, get a small business loan, get a
student loan, or literally thousands of other items that are a
part of life. The list tells us that since most people buy these
items on credit, we need to maintain a good credit rating and
report and get the highest credit score that is possible.
Credit Report -
The main way that a lending company obtains information about
your credit history is through one of the credit bureaus. There
are three nationwide credit reporting agencies in the United
States that handle this, and they are Equifax, Experian, or
Trans Union. These agencies collect your financial information
from anywhere that you have developed a payment history, and
purchased over time, like credit card payments, automobile
payments, etc.
Credit Score -
Now you know something about how to establish and restore
credit, how to protect credit, and what your credit report will
do for you or against you depending on your payment history;
let’s take a look at what has become the most important item in
determining whether you would be a good risk for a loan, or not
- and that is the credit score.
