3A-Credit Hoes and Money Woes-Getting Credit

They seem like such simple statements, and you hear them everywhere from family, teachers, ads, etc. “Get some credit.” “Build your credit.” “You need credit.” Although these statements are true, they don’t say how to accomplish this. You need to know how to build credit, but more importantly, how to do it correctly.

Question number 1- Where is the best place to get credit?

Question number 2- Does that matter if you’re just starting to build credit vs. re-establishing credit?

Question number 3- Most importantly, what not to do and where not to go to get your credit set up.

We’re going to focus on how to get credit. The same things will apply whether you’re brand new to getting credit or starting over again.

When you need to establish credit, you want to proceed with caution and take it slowly. Trying to get an 800 credit score overnight isn’t a reality. What IS a reality is getting yourself some credit, then using it regularly and making sure your payments are on time EVERY month. Also it’s very important to remember to not apply for credit everywhere. That makes you look desperate to creditors-DANGER!

What you do now will follow you for a long time, so make sure what you choose to do now is a smart move that will help and not harm you.

If you follow these steps to establishing credit, you’ll be successful in getting credit and good credit scores. The first step is to apply for credit of course. But wait. Don’t you need credit to get credit?

So if I have no credit, or I’m wanting to re-establish credit, then how can I get approved?

Always start with a secured credit card.

A secured credit card is one where you deposit money into a savings account that’s connected to the credit card. Your credit limit is based on the amount of the deposit you make. When you deposit $100 then the max you spend is that $100. Before you get excited and think that if you deposit $10,000 then you’ll have a $10,000 credit limit, it doesn’t work like that. For someone who has no credit or needs to redo their credit, you’ll find the credit card company’s will put a limit on the size of your deposit which in turn limits the amount of credit for your first credit card.

Which is actually a very good thing for you, as this gives you time to learn how to handle having credit.

Let’s look at how this works to build your credit.

Let’s say you deposit $2000 dollars, and they give you a credit card with a $2000 credit limit. Remember, they will charge you a higher interest rate than if you had an already established credit file. But that’s the cost of building credit. Once you have a credit file history, you can change to a lower interest card. As you use the card to build your credit, please keep in mind one of the MOST IMPORTANT lessons for building and keeping good credit, which is:

Never use your card for more than 30% of the credit limit.

So for a card with a $2000 credit limit, you can never charge more than $600 total to your card at any time. Also, you want to make sure your payments are always on time or before it’s due. By keeping your credit usage at or below 30% of your credit limit, and paying on time or early, you are forcing the credit bureau’s algorithms to score you with great scores. And you can do that with all of your creditors. This is the simplest rule to follow to get yourself great credit.

NEVER apply for more than 2 within 24 mos. Inquiries will stay with you for 24 mos.

Choose where and when you apply for credit carefully. So avoid those in-store credit applications.

Secured cards can be done through most banks, or online with a credit card company. Choose wisely.

Our paid subscribers get the inside scoop on all things money and credit, such as the creditors that are easier to get approved or to deal with, who to go with and who to stay away from, along with many other bonuses. Subscribe now and get the important insider info, like the answers to the Questions 1-3 from the start of this post!

Helping you claim Victory over your money woes,

Poni S