Got Credit? Why Shoud I Have It?


Credit cards

Image via Wikipedia

Why?

There’s a great need to build credit in this country, especially if you’re considering buying a home or making other large purchases.  If you don’t have credit or if you need to rebuild it with credit repair, I hope this post will be a great reference point.  To prove credit worthiness, consumers and young people should build their credit over time to qualify for larger loans in the future and to also show that they are responsible debt payers.  In other words, if you don’t have credit, lenders won’t know if you’re a good customer.  When you prove your credit worthiness, the result is high credit scores.

 Who?

Who needs to have credit?   Everyone of legal age, especially young adults who are beginning to have more financial responsibilities and  U.S. immigrants who have no credit history at all need to establish credit.  When the time arises, such as a major need or emergency, solid credit will help you be able to qualify for what you need.  You certainly need to have solid credit to buy a home.  It’s the American Dream and the single most biggest purchase you will make, so build it!

How?

It is actually pretty easy to build credit.  Try one of the following ideas:

  • Ask your bank or credit union about a secured credit card.  You can make a deposit to your account and have a credit limit in the amount of your deposit.  The bank takes little risk and you build credit slowly (avoid Secured Credit Card Problems).
  • Use a co-signer on your first few credit accounts.  Lenders will consider the co-signer’s existing credit.  The co-signer essentially ‘vouches’ for you while you build credit.  Note that this is a big responsibility – you can cause major headaches for the co-signer if you don’t pay as agreed (see How Co-Signing Works for details).
  • Use retailer programs for modestly large purchases like furniture.  For example, you may buy a television on the “$40/Month Payment Plan”.  Gas station cards may work as well.  These programs can be easier to qualify for and they certainly help you build credit.  Be sure that the retailer will report your loan to the major credit reporting companies.
  • Get a credit card with any reputable institution that will give you one.  Again, you have to make sure they’ll report your timely payments to the credit reporting companies.  Of course, you have to always pay at least the minimum before the due date.

Please, please be careful after you start to build your credit.  It can lead to trouble!  Make wise decisions when it comes to purchases and “enticing” credit card deals.  Credit card companies, banks, and retail institutions may inundate you with offers so please use good judgement.  Also, monitor your credit reports for correct information and to remove any errors.  However, in case you do get into trouble, there are ways to improve it and get your life back on track.  In my opinion, these days, credit is like a life-line so in a future post, I will discuss repairing credit and other related information.  Thanks for reading my thoughts.

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About Kecia Thurman Bland

Kecia Bland is a professional full-time licensed NC Real Estate Broker (since 2008) focused on providing excellent customer service and expertise for those interested in buying and selling real estate in the Greater Raleighs areas- the Triangle area, and surrounding counties- Wake, Durham, Johnston, Chatham, Franklin, and Granville. Kecia provides her clients with a pleasurable and smart real estate experience. View all posts by Kecia Thurman Bland

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