THE BLUEPRINT FOR ESTABLISHING CREDIT.

• Establish a bank account. Go to your local bank or credit union and open an account. Many banks offer free checking or low monthly fees. Compare a few banks to see which bank fit your needs best. Opening an account is the first step to establishing credit. Keep your account in good standing. Bank information will not appear on your credit report but is most often required on credit applications.
• Apply for a credit. Apply for a credit card. Be sure to look at the guidelines and apply for those cards whose requirements you are most likely to meet. Typically a department store or gas credit card is easier to obtain than a bank-issued Visa or MasterCard. The purpose of obtaining the card is to establish credit. You want to choose a card that will help you to establish good credit. If you want to get a Visa or MasterCard ask at your bank or credit union. Credit unions are a great source for establishing credit. They tend to work with more flexible guidelines.
• Purchases and Payments. You must commit to making prompt and on time payments. Maintain low balances on your card. Use your credit card for a purchase and be sure to pay the balance on time. Once you have used the card responsibly for three to six months, apply for a Visa, MasterCard, American Express or Discover. These cards will allow you more flexibility in charging purchases, but will also give you more opportunity to get in trouble. Your “plastic money” should not be a means for acquiring things. Be responsible with your spending. Remember the purpose of acquiring the cards is to build your credit and to demonstrate to others that you’re credit worthy.
• Create and maintain a spending plan. Give yourself a weekly or bi weekly financial check up. A good way to manage this is to do the check up along with each pay period. Before you use your credit card, you want to be sure you’re able to pay off the balance. Do not get into the habit of just paying the minimum payment. Record all of your expenses and income as a part of your financial check up. Adjust your spending accordingly.
• Power of a secured card. If you’re having difficulty qualifying for a credit card, you may opt to apply for a secured MasterCard or Visa. A secured card is simply a card with buying power based on a required and specific deposit made by you into a saving account. Banks who provide this option will monitor your performance. After a time they may offer to convert your secure card over to a regular credit card and most importantly help raise your credit score. These cards are used in the same manner as any other card. Merchants will not know you are using a secured card when making a purchase.
• Denied Credit? As a consumer you have the right to inquire about denied credit. Any creditor denying you credit will provide you with a reason for the denial. Most creditors will include this information in a denial letter forwarded to you. Reasons for a denial may include income, employment or credit history. Know your credit history. It weighs heavily in most credit decisions. It is important to find out why you are denied. This will help you to know what you need to improve upon. As a general rule you do not want to have frequent, recent and multiple inquiries (applying for credit) on your credit report. Potential creditors will frown upon this activity and rate this as your inability to acquire credit. If you are denied credit, request a free copy of your credit report to see where you stand. Be sure to check for erroneous data and be sure to make corrections as soon as possible.
• Gateway. Good credit is the gateway for accomplishing your goals in life. Employers look at your credit rating, renting an apartment requires a credit check, purchasing a car and buying a home requires a review of your credit. These basic steps will help you to establish good credit. It 's up to you to maintain good credit.