Ways To Establish Credit Quickly

If you are new to the financial world or perhaps just wanting to set a new financial strategy for yourself you may be wondering how you can establish credit quickly. In today’s credit driven world it has become imperative to have credit in order to make the financial decisions most adults want and need to make during their lifetimes. Not having credit or having poor credit can handicap you in a number of ways so it becomes imperative that early on in establishing a financial blueprint having credit has become a necessity. While there is a time factor involved in all financial decisions most financial experts recommend that in order to be considered as having a credit history you need to have made about 6 months of purchases and on-time payments. After that point most lenders will see you as a person with a credit history and consider you a valid financial entity when making further credit decisions. But in order to begin here are ways to establish credit quickly-

• Open a bank account. This will not appear on your credit report, but bank account numbers are often requested on credit applications by the lender. In addition banks are often much more willing to extend credit to their preferred customers who have accounts in good standing.
• Apply for the right credit card. To avoid being denied credit, apply only for those cards whose requirements you are most likely to meet. Department store or gas credit cards are usually easier to obtain than a bank-issued card. Before applying, make sure the creditor reports all account activity to the credit bureaus. As the purpose of obtaining any card is to establish credit, you will want to choose a card that will help you do that.
• Charge purchases and make payments on time. Simply having a credit card is not enough be sure to use your credit card for purchases and make sure to pay the balance on time. Once you have used the card responsibly for three months, you may want to then apply for a major credit card. These cards will allow you more flexibility in charging purchases, but keep in mind that they will also give you more opportunity to get in trouble. It is imperative to remember a $5,000 credit limit is not $5,000 in additional income. Credit cards are only a different way to spend the money you already have.
• Create a spending plan. Before you even begin using your credit card, you will want to make sure that you are able to pay off the balance on the items you plan to purchase. A good way to do this is to write down all of your expenses and your income and adjust your spending accordingly.
• Consider applying for a secured card. If you do have trouble qualifying for a credit card, you may opt to apply for a secured card. These types of cards have credit limits based on a required deposit made by you into a savings account. You can then use the card just as you would any other credit card.
• If you are denied credit, ask why. You will want to ask any creditor that denies you credit to give you the reasons you were denied. Some of these reasons may include income, employment or credit history. It is very important to find out why you were denied because frequent inquiries (applying for credit) on your credit report can be viewed as a negative to a potential creditor. If you are denied credit, you can request a free copy of your credit report to make sure that your credit history is being reported correctly and correct any errors that may be on it.