Credit Bureaus-one Simple Monthly Payment
Paying cash for products and services seems to be a practice that occurred in a different era. Today, credit is a way of life, and plastic has evolved into the currency of choice. Virtually anything-gas, groceries, doctors' visits, clothing, vacations, even cars--can be purchased with credit cards.
Yet many consumers are unclear about the best way to go about establishing and maintaining a good credit history. It is a good thing to use your credit card to purchase things, but it is not good to misuse your credit card and face the dilemma of being in debt for most of your life. Your main goal is to establish credit not ruin your credit. There are a number of ways to establish credit. If you have a steady income and have lived in the same area for at least a year, try one of these approaches:
- Apply for credit with a local business, such as a department store or a local bank or credit union. These local merchants may have lower credit standards than larger lenders.
- Apply for credit with an oil company or local department store.
- Take out a small loan from a local bank or credit union-even if you have no immediate need for the money. Make payments on time and consider the interest expense an investment in establishing a good credit history.
- Take advantage of secured lines of credit offered by some lenders. By depositing a specific amount into a special account, you receive a credit card with a limit that equals your deposit. (For example, if you deposit $1,000, your credit limit will be $1,000.)
- Before you apply for credit, make sure the creditor or lender reports credit history information to one of the credit bureaus so you can build your credit history.
If you begin to fall behind in your payments and you lose your steady income, your best bet is to contact a credit counseling company and get professional help and advice. They will lower your monthly payment; consolidate all your bills to one simple monthly payment.
