Tuesday, July 14, 2009

How to Start Building a Credit History

Unless you have a co-signer, the easiest way to start a credit history is to apply for a credit card. Because it will be your first credit, you will probably not get very good terms on your interest rate that will be charged. So it's important to charge small amounts each month and pay the balance off fully each month so that you don't have to pay that high interest rate. Make your payments on time and soon you will have built up a good credit history.

If you aren't able to get approved for a traditional credit card then you can apply for a secured card. With a secured you will be sending money to the card company to be held as collateral against your charging. For example: If you send them $250 to hold, they will grant you a credit limit of $250. As long as you don't try to charge more than $250 at a time you will be okay. Again, only charge small amounts, pay the bill on time and balance in full each month to avoid paying interest.

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