Start Building Your Credit History, Today!! - By Wow! Credit Cards © 2006
By WOW! Credit Cards
One easy way to show a potential lender that you are a good risk is by opening individual checking or savings accounts in your name. While a bank account will not affect your file, the account activity will demonstrate your ability to handle money responsibly. Be aware that writing bad checks and overdrawing your bank account are negative indicators to lenders and do damage to your credibility as a good risk.
Apply for a card and use it to establish credit. Pay it off every month to show that you can responsibly handle money. If you must carry a balance, it is imperative that you pay your card bills on time. Department store and gasoline cards are generally easier to obtain than major cards such as a MasterCard®, Visa®, or Discover®.
Another good way to establish a history is to apply for a small loan or line of from your local bank. Repay the loan promptly and on time to build a positive history and earn a good rating. To get a loan without a co-signer, you must be at least 18 years old and have a steady source of income. Increase your chances of getting the loan you are applying for by coming up with a large down payment.
If you do not qualify for on the basis of your own file, consider asking someone with an established history (like a parent) to co-sign your application. If you fail to repay, the co-signer promises to do so on your behalf.
If you are looking for a card to start building credit, consider a secured card. These cards require you to maintain a funded account / security deposit to get approved. Or, apply for an unsecured card and avoid the security deposit altogether (if possible).
Qualify for a New Card
If you are at least 18 years old and have a regular source of income or savings, you are on your way to qualifying for a card. But you will still have to demonstrate that you are a good customer. The proof is in your history, which lists the amount of you have received and how faithfully you have paid it back. If you have financed a car loan or other purchase, you probably have a record at a reporting bureau.
This history shows how responsible you have been in paying your bills and helps the card issuer decide how much to extend. If you are a full-time student, make sure to include that information on your application. Creditors often assign full-time students lower initial lines to start their files. If you have an excellent history, you may qualify for cards with rates as low as 0% introductory APR and a variety of reward cards. Before you submit a application, get a copy of your history to make sure it is correct.
Choosing the Right Card
Credit should be your servant and not your master! Smart consumers comparison shop for cards, especially with our wide array of choices. Before you accept the pre-approved, limited time offers you receive in the mail, consider all of your options and how you plan to use your new card.
If
you plan to pay the balance off each month, a grace period is vital to avoid paying interest on your purchases. If you plan to pay off the balance over time, look for low APR card offers with no annual fee. How high of a limit do you need? Will your new card be accepted in all the places you plan to use it?
Equally important is understanding what method the issuer uses to calculate your balance and compute your finance charges. This will determine how much interest you will pay each month! For more information on choosing, see our article How to Choose a Card at http://www.wowcreditcards.com/center/card-choose.htm.
Your responsibilities when using a card:
A card application is a contract with established rights and responsibilities of both parties who sign. Do not sign on the dotted line, if you cannot pay. Do not misrepresent yourself, your history or your financial status, as this may cause you hardship in the future when applying for credit. Consumer laws define your right to know how much a loan will cost before a contract is signed and protect you from excess interest rates and unfair sales practices. In return, you agree to repay the loan in a specified amount of time. If you fail to meet your obligations of repayment, the creditor can choose from three courses of action:
1. Repossess the merchandise purchased with the card.
2. Take a portion of your wages or property on legal orders from a court to pay the debt.
3. Take you to court to require payment of the amount of the debt.
To see a complete list of secured, unsecured, and prepaid cards, please visit: WOW! Cards - Card Applications.
For additional articles and extensive resources for everything you need to know about cards, please visit us at WOW! Cards.com – Card Applications Online!
