Have you established good credit yet?
Establish Your Credit
It’s a fact of life in this day and age that you need credit to survive and live the good life. After all, without a credit card you can’t rent a car. There are gas stations that don’t accept cash – even if you have 2 forms of ID. More and more, stores have credit card only checkout lanes. And unless you have a lot of cash, you can’t buy a home without credit.
As a young adult, how do you establish your credit?
Credit Cards
One of the best , and easiest ways to start your credit history is to get a credit card. Some companies will issue a card without the need for a prior credit history. However, you may need a co-signer. Other companies will issue a secured credit card. With this, you make a deposit to the credit card company, they will give you credit up to the amount of the deposit. When you make a purchase, and make the corresponding payment, you”ll get a favorable report to the credit card bureaus. Remember to use caution on a credit card. The interest rate is usually high, so don’t spend more than you can afford to pay off right away. If you can’t afford to pay the entire balance, always pay more than the minimum payment. A minimum payment may actually have an adverse effect on your credit score.
Student Loans
If you’re attending college, you may need to take out a student loan. By making the necessary payments on time, you’ll be on the road to having good credit.
Secured Loan
Try this. Go to your local bank and buy a Certificate of Deposit (CD) for $1,000. Use the CD as collateral for a 12 month personal loan of $1000. Put the $1,000 into a savings account at the same bank, and have the payments automatically deducted. This will be reported as 12 payments made on time, and will go towards increasing your credit scores.
Bottom Line
Use your credit wisely and pay your bills on time. It won’t take long to build a good credit history. Then, when you’re ready to buy your own home, contact us.
Would you like to look for a home in other Monmouth County towns?
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