It’s important to have good credit scores today. You wouldn’t know when you’d be need ing a new loan in the future, so it’s best to keep your credit ready. “What are credit scores?”, “What affect credit scores?”, “What are different types of loans?” and “How is a cash advance different from loans?” are all good questions to ask. Then, know some tips to keep you on the right track.
Co-signing for others
Fist rule of thumb, never co-sign on a loan unless you are absolutely sure that the individual you are co-signing for will repay their debt. Shortly after my husband and I tied the knot and started searching for that perfect home,we were quickly met with disappointment.”I’m sorry your credit is just to low for a home loan.”These words were like a piercing arrow to my husband who had always paid every bill on time and had even paid off a car loan by the time he was 19 years old. How could his credit not be good enough? He had co-signed for a friend to get cable.Well, sad sob story his pal didn’t pay the bill and you guessed it, his credit was ruined.
Establishing credit when you don’t have any
Trying to establish credit when you don’t have any can be like trying to get out of a maze.One way to establish credit is to have a utility bill in your name.They often require a deposit if you don’t have good credit. But,if you pay on time and every time,it will help your score. Your bank can be a great place to start building credit. Often a bank will allow you to get a bank credit card,when other credit card companies won’t even consider it. This is what my husband and I did. We got a credit card that had a limit of $500 and never put more than $100 at a time on it and paid it each month before we incurred interest charges. Sometimes a bank will require that it be a secured card that has an assets directly tied to it. For instance, you may have to keep $800 in an account to have a card with an $800 credit limit.
Becoming an authorized card user
If you have a close relative or friend with excellent credit history,you may consider asking them to allow you to be an authorized user on one of their credit cards. There is a danger in this,their credit habits for that card will directly affect your credit.If they are late on a payment,that will reflect on your credit.
If your spouse has good credit,you could get a joint-loan or joint-card. I had no credit score when I got married.So,my husband and I made sure our first loan was a joint-loan. We also put the utility bill in both of our names. This is an easy way to help both of your credit scores.
Limiting the amount of credit lines you have
You don’t want to have too many credit lines at once. Having too much credit available to you can also harm your score.
Spending more than you can afford
When you have a little plastic card in your pocket, it can be tempting to buy out of your budget. This is one of the worst pitfalls in trying to establish credit. Just a few swipes and there you are-in debt.Only charge what you could be paying for in cash.