In order to obtain good credit standing, you have to
have a credit card. However, there is a slight hitch;
you canít obtain a solid credit standing if you canít
receive credit in the first place. Therefore, here are
some ways to establish your credit.
Apply for a secured credit card. How does this work? The
amount of credit is based on the amount of money you
deposit into a checking or savings account. The credit
card company issues you a card (more akin to a debit
card), and the amount used is deducted from your
checking or savings account. After some time has passed,
and you have paid your bill on time, you can ask the
credit card company to issue a regular credit card. One
well known company that offers this service is Capitol
Another way to establish your credit is to apply for a
department store card. Once again, as long as you pay
your bills on time, you credit rating will begin to
rise. However, do not attempt to apply for too many
cards, as the credit reporting agencies may determine
you cannot handle the line of credit based upon your
salary. When you receive all of those credit card offers
in the mail, immediately check the APR rate as well as
their terms and conditions. Not all credit card
companies offer low rates. Once you establish credit,
and are considered an account in good standing, you can
contact the credit card company and ask for a lower
rate. Depending upon your payments, line of credit, and
usage; they will ascertain whether or not you qualify
for a lower rate.
Also keep in mind that most credit card companies, who
offer credit to anyone without any credit standing, may
do so at a higher rate than for others who have
established credit. Ensure you open a checking or
savings account. You may need to give this information
to qualify for credit.
These are some of the ways to establish your credit.
Others may include applying for a loan; but since you do
not have any credit history, you may be turned down
unless you have a co-signer. The best approach is to
begin with a department store or secured credit as
mentioned. One other important note: Upon securing a
credit card, you will be given a line of credit. It
could be $500 or more. Do not run up your bills
immediately. Do not use your card online, unless the
credit card company has a Zero Liability Clause; and do
not apply for other cards unless you are sure you can
pay the monthly bills. Finally, ensure you pay a bit
more than the minimum due. This can help your credit
rating increase down the line.
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