How to Establish Credit

By eHow Personal Finance Editor

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Credit isn't established overnight. Prepare now for financial emergencies by securing a good credit rating.

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Instructions

Difficulty: Moderate

Things You’ll Need:

Charge Cards
Checking Accounts
Loans
Savings Accounts

Step1

Get checking and savings accounts in your own name.

Step2

Apply for a charge card in your own name from a retail store or financial institution. Make at least a minimum payment monthly to establish a record of managing debt.

Step3

Apply for a loan in your name to buy jewelry, furniture or another item that will be paid off in installments for at least a year. Make all payments on time.

Step4

Secure a small loan from a credit union or bank (an auto loan, for instance), and pay installments on time.

Step5

Check your credit rating by calling your creditors or ordering a copy of your credit report.

Step6

If you experience trouble getting a loan, ask a friend or family member to co-sign it.

Tips & Warnings

Although not a credit indicator, a checking or savings account shows how you manage money. Avoid bouncing checks and add to your savings monthly.
A spouse's death or a divorce could leave you without credit. Establish credit in your own name.
Secure a job for several months before applying for credit.

Comments

Anonymous said

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on 12/27/2007 If your parents can't or won't co-sign for credit establishing processes, get a secure credit card. Basically, a secure credit card is as follows: You pay a credit company that offers this service an amount of money (like $500 dollars). You then have a credit card with a $500 limit. It's an easy and relatively 'harm free' way to become a credit "adult."

Anonymous said

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on 11/22/2005 Talk to a lawyer about the Soldiers and Sailors Act. It requires your debtors to lower finance rates to no more than 6%.

Anonymous said

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on 11/22/2005 Follow these steps, too, if you've had a bad credit rating in the past! Take it slowly to re-establish your credibility and trustworthiness. Pay everything on time or early and avoid the very real temptations to overextend yourself again.