Estabilishing a Good Credit Record With A Credit Card
Creditworthiness is the barometer when applying for a loan. A good credit means that a person is a good payer; that he doesn’t default on his obligations. Some employers check the credit rating of an applicant before hiring them. A good credit rating usually tells the employer that the prospective employee is a responsible employee and will be an asset to the company.
A way to establish good credit is to apply for a credit card. Applying for a number of the best credit cards at once may not look good. When applications are turned down, lenders will assume your credit rating is bad.
Apply for a credit card that suits your needs. Once you have obtained a credit card use it with prudence. Pay monthly dues on time so it will be recorded in your credit history. Paying monthly credit card dues is also another way of establishing good credit. To pay monthly premiums on time, make sure that bills are sent to the right address on time. When you are overdraft, find a way to pay the minimum limit to reduce the interest.
Control your spending habits. Avoid spending to the limit of your credit card. When there’s the urge to use your credit for something that you want, think and think again. There is wisdom in foregoing something at the moment. If you need cash in many of your transaction, apply for a debit card, for convenience. Leave your credit at home. When you don’t have it, you can’t use it.
Be a responsible credit cardholder. When you lose your card promptly, report it to authorities so actions can be taken to protect you from fraud. There are as many credit card frauds as there are credit cards. Make sure to take precautions like disclosing your PIN or Social Security System number to anyone. Beware of many internet frauds that may lure you into buying some commodities at a bargain price. Criminals have many subtle ways of letting you disclose information they need from the internet.
Review all receipt of transactions and be wary of any inconsistencies. If there are any, report them immediately.
Slowly establish your credit history by avoiding bad credit, and not exceeding your credit card limit. In the unlikely event that you exceed the limit, find ways to pay, even the minimum payment. Never default on credit card payments because it will reflect on your credit history.
Check your credit reports. No program or method is always perfect. So make sure to obtain a copy of your credit report and correct any error. Some borrowers were denied loans because of erroneous credit reports. Credit reports are readily available from credit agencies.
Learning and keeping good finance and credit habits will likely help you build a sound financial future.