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A Guide for Establishing Credit the Smart Way

Today's economy has more of a need than ever for a good credit score. This essentially affects your ability to buy a car, home, and other things that you need credit. Not only does it affect the things that you can buy, but also in some cases your ability to get an apartment or get a job, along with other things not expected.

For those that have not had a lot of credit in the past, you are more likely to quality for a lower limit credit card. The limit does not matter, but rather the way you use it to establish your credit. Using your card sparingly will allow you the opportunity to pay the entire balance off as soon as you receive the statement. Immediate and full payment reduces the risk of forgetting to pay and getting a late fee.

It never hurts to schedule a payment online, especially if you are waiting to be paid. This allows you to know the payment will come out of your account the last day of your statement and gives you enough time to cash your paycheck. Make sure you deduct any payments arranged online, since you want to avoid the risk of overdraft fees.

When you are making the choice between different cards, start by researching all the different ones available. Try to find one without an annual fee and offers incentives. If you have a card with cash back incentives, remember the money is free as long as you pay the balance off every month without interest.

Consider your present credit before applying for some of the cards, since they are not for people with little to no credit. It is not a good idea to make applications to cards, until you have found the right one, since a turn down does not show up in your credit report, but numerous inquiries do.

See also  Four Tips to Help Rebuild a Credit Score

A credit card limit around $500.00 is a good way to start. Just make sure you keep your purchases at an amount you can afford. You really do not want to go over thirty percent, with you debt to available credit.

If however your credit scores is too low and it will not allow to qualify for a traditional type of credit card, then you my want to consider getting a secured credit card. This kind of card generally has the limits of your cash available. Establishing credit takes time and pays off in the end, however trying to re-establish credit is not as fun.

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