Establish a Good Credit History
It’s easier for you to get a good deal on a credit card if you have an established credit history with good credit. Suppose you haven’t financed a car loan, a computer, or some other major purchase. How do you begin to establish credit?
First, consider applying for a credit card issued by a local store and use it responsibly. Ask they report to a credit bureau. If they do – and if you pay your bills on time – you’ll establish a good credit history.
Second, consider a secured credit card. It requires that you open and maintain a bank account or other asset account at a financial institution as security for your line of credit. Your credit line will be a percentage of your deposit, typically from 50 to 100 percent. Application and processing fees are not uncommon for secured credit cards. In addition, secured credit cards usually carry higher interest rates than traditional nonsecured cards.
Third, consider asking someone with an established credit history to co-sign. This is an option if you don’t qualify for credit on your own. The co-signer promises to pay your debts if you don’t. You’ll want to repay any debt promptly so you can build a credit history and apply for credit in the future on your own.
A positive credit history is an asset, not only when you apply for a credit card, but also when you apply for a job or insurance, or when you want to finance a car or a home. It’s important to start building credit as soon as you can. If you’re a student you should immediately apply for one of our great student credit cards.
