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Friday, December 15, 2017
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Credit History

Credit History
Many people just starting out have no credit history and may find it tough to get a loan or credit card, but establishing a good credit history is not as difficult as it seems.
  • You might apply for a credit card issued by a local store, because local businesses are more willing to extend credit to someone with no credit history. Once you establish a pattern of making your payments on time, major credit card issuers might be more willing to extend credit to you.
  • You might apply for a secured credit card. Basically, this card requires you to put up the money first and then lets you borrow 50 to 100 percent of your account balance.
  • You might ask other people who have an established credit history to co-sign on an account. By co-signing, the person is agreeing to pay back the loan if you donít.
Building a Credit History
There are a few important steps to build good credit history that shall improve your FICO score.
  • Establish a steady work record.
  • Pay all bills promptly.
  • Open a checking account and donít bounce checks.
  • Open a savings account and make regular deposits.
  • Apply for a local store credit card and make regular monthly payments.
  • Apply for a small loan using your savings account as collateral.
  • Get a co-signer on a loan and pay back the loan as agreed.
Improve Your Credit Record
A lot of people spend more than they can afford and pay less toward their debts than they should. To get control over your finances and to manage your debt, try:
  • Budgeting óIn many cases, people design and then stick to a budget to get their debt under control. A budget is a plan for how much money you have and how much money you spend. Sticking to a realistic budget allows you to pay off your debts and save for the proverbial rainy day.
  • Credit Counseling ó Many universities, military bases, credit unions and housing authorities operate nonprofit financial counseling programs. Some charge a fee for their services. Creditors may be willing to accept reduced payments if youíre working with a reputable program to create a debt repayment plan. When you choose a credit counselor, be sure to ask about fees you will have to pay and what kind of counseling youíll receive. A credit counseling organization isnít necessarily legitimate just because it says itís nonprofit. You may want to check with the Better Business Bureau for any complaints against a counselor or counseling organization. Visit www.bbbonline.org for your local Better Business Bureauís telephone number.
  • Bankruptcy ó Bankruptcy is considered the credit solution of last resort. Unlike negative credit information that stays on a credit report for seven years, bankruptcies stay on a credit report for 10 years. Bankruptcy can make it difficult to rent an apartment, buy a house or a condo, get some types of insurance, get additional credit, and, sometimes, get a job. In some cases, bankruptcy may not be an easily available option.
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