Most creditors want to see a solid credit
history before they give you a loan
If you're like me, a teenager or young adult,
just getting started in the big wide world, getting credit can be tough.
Most creditors want to see a solid credit history before they give you
a loan. They seem to be as clueless as I am as to how to get a credit history.
After all, how do you get a credit history when you have to have one to
get credit? Duh!
As frustrating as it can be for a young
person, there are a few ways to get some credit history, to at least give
you a little something to show the bank.
Co-signer
The easiest way to get started with credit
is to get a parent, grandparent, etc. to co-sign a loan for you, usually
a car loan. However, for some of us, that is not an option for one reason
or another. Another option you can consider is a co-signed credit card.
Just be sure that you pay your bills on time, or you'll just get yourself
a bad credit history and be in worse shape than when you started!
Secured Credit Card
You can also get a secured credit card.
You would make a deposit of perhaps $500 to the issuing bank. They would
then issue you a credit card with a $500 limit. That protects them, and
will give you a credit history. A word of warning the leading
bank that issues secured credit cards has a very bad record with the Better
Business Bureau, so check out the bank first!
Secured Loan
You can also get a small secured loan.
You deposit $1,000 with the bank as collateral, and they loan you $1,000.
This is really pointless, except it does give you a credit history.
Lastly, once you get some credit history,
keep in mind that you may be able to get a fuel card or department store
card before you can get a credit card. Check and see if the fuel / dept
store card will report to the credit agencies and help improve your credit
history.
One final tip if you're buying
a car and need a car loan, a good salesman will help you get a loan. That's
actually how I got mine along with a large down payment and
a co-signature.
Author-Bio: For more great resources on
credit and financing, visit the Money Forum: http://www.gotalkmoney.com
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