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The easy answer to the question "How do I get credit?" is "Apply for credit". Knowing how to apply and which types of credit to start out with can make the process simpler, however. Read on to learn how to get credit.
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Step 1: Establish a Financial History
- Establish a relationship with a bank.
- Open a checking account, making sure to have enough in your account to cover the checks you write. avoiding overdrafts, and proving that you can manage a checking account will help you establish a good financial track record.
- Even if you are living at home, have a utility bill put in your name. Regularly paying a telephone, electric, gas, or cable bill will give you a credit history.
Step 2: Apply for a Credit Card
- If you have a relationship with a bank, apply for a credit card with them. An institution that knows you will be more apt to give you a credit card.
- If you can't get a Mastercard or Visa through your bank, apply for a department store, specialty shop, or gas station card.
- If all else fails, consider a secured credit card. These cards require you to have a balance deposited with the bank equal to your credit line. As you develop a good credit history, the card can be converted to a regular credit card.
Step 3: Establish a Good Credit History
Once you have begun to use credit, make sure to use it carefully.- In the beginning, only charge purchases that you can pay in full each month.
- Be careful not to exceed your credit limit.
- Pay your bills on time each month.
Step 4: Check Your Credit Report Annually
The Fair Credit Reporting Act requires each of the three nationwide credit reporting agencies — Experian, Equifax, and TransUnion — to provide you with a free credit report every twelve months. They will not automatically send it to you, however; you need to request it. Once you've worked hard to establish good credit, you want to make sure that your credit score isn't being brought down by errors on your credit report.About this page
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