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Building Credit
How to Build Credit & Credit History in this Creditcentric World
Steps an individual can take to build and maintain good
credit history
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1. Keep Number of Credit Cards to minimum. Consumer is getting
bombarded with credit card applications in the mail every day. US consumers on
average have 14 credit cards Applying for too many credit cards,
even if you plan to pay all of them off every month, can have an adverse affect your credit history.
If you have too many credit cards, it might be worth it to reduce the number
or consolidate them into
credit cards with
no annual fee low or no limited time interest and rewards.
2.
Budget Every Month. A good
credit practice is to budget every months and
see what cash inflows and out flows are. This gives an individual a visual
realization of where he/she stands and help in deciding what and where to
spend the money on. |
3. Differentiate between absolute
necessity and things you'd like to have. Don't over extend yourself.
Buy what you can afford and charge what you can afford to pay back every
month. In extreme circumstances of need, try to borrow from family and
friend's, home equity loans, personal loans. Only when you have exhausted all
other sources, must you consider credit cards. In that case, look for credit
cards with favorable terms such as no annual fee credit cards with low
interest rates, credit cards with low low teaser interest rates offers for new
customers etc.
4. Use Credit Cards intelligently. you must know full well the risks
you run by relying on plastic. For one thing, recognize that some cards'
"teaser rates" (introductory interest rates that can be as low as 0%)
inevitably spike, often to stratospheric levels. Moreover, read your card's
fine print: While low interest rates apply to conventional purchases, some
cards have exorbitant rates for cash advances. So, be careful how you use the
card, as it may ultimately cost more than you think.
5. If need be, put things on hold. If past credit problems simply seem
insurmountable — either you can't get the money you need or what's being
offered is at an ugly interest rate — give some thought to put your expenses
on hold for the time being. That may give you some breathing space to
right your finances and, eventually, start things up under much brighter
circumstances.
6. Keep your personal and business finances separate. If you have a
business as well, protect yourself by keeping your business finances
wholly separate from your personal money matters. That means separate credit
cards, separate bank accounts and as impervious a wall separating the two as
you can possibly build.
There are websites
that offer different credit cards to help meet your personal and business
needs.
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7. If Run into credit problems solve it immediately: If unfortunately
past credit problems and poor credit practices are catching up with you,
resolve it immediately without any delay. Bad credit history can affect every
single aspect of your life must be aggressively dealt with.
Click here for help with credit repair
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