No credit is bad credit
Those who have never had a credit card or car loan may find it difficult come time to apply for a home loan.
This is because having no credit history is almost as bad as having a bad credit history. The main difference is that there is an easier fix for having no credit history. This may be of particular importance for young adults just entering college or the workforce. That is prime time to build up credit history. Besides, a credit card can provide a buffer for life’s little emergencies that may arise.
If you are a longtime customer at a particular bank, check with them for student card offers. They will usually be more than happy to help you out. Gas stations and department stores are also great places for first-time card users to find help. These venues typically are not sticklers when it comes to credit card history, and will offer small-balance cards to help build up a good record.
Key words there: Good Record! How do you do that?
Pay on time each month: You should preferrably pay the whole balance, but at least the minimum payment.
Keep the balance low: Try not to exceed 50% of the available balance.
Pay your other bills on time: As has been well-documented and griped about in this blog, you must pay every bill — even utilities — on time or your interest rate will jump through the roof. It’s a cruel fact of the hard, cold world.
So welcome to the wacky, wonderful world of credit, and happy spending!
