You Just Started To Establish Good Credit

Everyone has their own opinion on credit cards. Conversely, they can really harm your credit when they are used incorrectly.

They are a great tool when used correctly. In my own personal experience, credit cards have really made my life easier over the years. The key is to make your payments on time. I primarily use them for small and sometimes large purchases. Like anything else in life you must know your own limitations. They over extend themselves. This is where the majority of people get themselves in a real bind with credit cards.

In my opinion, I wouldn' t have more than 3 credit cards. It's very easy to max a credit card out and only make the monthly minimum payments and the credit card companies love that. Any more than that and your asking for trouble. They can make a lot of money this way for many years. I' m in car sales and have had many young people ask me how they can they buy a car if they have no credit? If you want to establish credit and build a good credit rating. credit cards are a great tool to do so.

Auto loans are very difficult to get if you have no credit established and it usually requires a good credit co- signer. For a young person just starting out, this can be daunting! For people who can' t get a co- signer they have to do something on their own. The following steps can help establish credit. The time table can be adjusted. It is just a general guideline. STEP ONE: Apply for a small max limit credit card. say for$ 500.

It could be the futon you always wanted or a. small home entertainment system, etc. STEP TWO: Once you receive the card go buy a single medium sized ticket item for it. STEP THREE: Make monthly payments on that item for say 6 months, and DON' T BE LATE ON YOUR PAYMENTS! You just started to establish good credit! STEP FOUR: Congratulations! But, your not done yet. Then go out and buy another single ticket item that will be a large purchase to you.

STEP FIVE: Repeat the above four steps again, only ask your credit card company to increase your limit say to$ 1, 000, $2, 000 or even$ 3, 000 dollars. Again, make your payments on time and do so over the next 6 months to a year. Yes, but it's very effective! Now, is this process lenghty? With a decent income and established credit on your credit card/ cards, you should be able to easily walk into any auto dealership in the U. Not only that, your good credit will give you a great auto loan with a low percentage rate.

S and make your first auto purchase on your own without any help from a co- signer! Bottom line, don' t be afraid to get a credit card if it's your first time and secondly, cut up those credit cards if you have more than three. If your like me and follow these simple and effective guidelines you will LOVE your credit card/ cards and your life will be better for it! In addition, don' t use credit cards for everyday expenses like paying for groceries and make your payments on time.