Building your credit history
Credit is your reputation for repaying debts on time. The better your credit, the more willing companies and people will be to lend you money.
Tips to establish Good Credit history
•Open a checking account or savings account. Checking and savings accounts do not create your credit file, but their existence will indicate that you have money and show something about how you manage it.
•Apply for a department store credit card or a major credit card. The most common major credit cards are: Visa, Mastercard and American Express.
•If you don't qualify for credit on the basis of your own credit file, ask someone with an established credit history (like a parent) to co-sign your application. A co-signer is someone who promises to pay your debts if you don't.
Once you have a Credit Card:
•Pay at least the minimum amount due on each account every month, and pay on time. Allow five to seven business days for payments made by mail.
•Use your credit card wisely, and you'll have a very beneficial financial tool. If you use your credit card unwisely, and you'll run up credit card debt you can't afford.
•Keep a record of your credit card purchases in a notebook. You can also use software like Quicken®, to help you manage your finances.
•Take advantage of services your financial institution offers. Use services such as online banking to see your account activity on a daily basis and arrange to make electronic payments.
•Even if you pay off your balance every month, try to avoid using more than 50 percent of your limit on any one credit card.