Credit Card eZine - News and Articles about Credit Cards

Build Good Credit History

02:31:48 AM Thursday, May 17, 2007

How to get a credit card deal that gives you instant approval!

Everyone wants an instant online approval credit card. Instant approval means that you have excellent credit and the credit card company doesn’t even have to think twice about giving you their best credit card deals because you have shown great financial responsibility. However, the only way you can get a great credit card deal is to have good credit history, but…the only way to get good credit history is to have a good credit card! This is a confusing position to be in but as long as you are a disciplined and patient person you should have no trouble building a solid credit history!

The type of credit card that you apply for will depend highly on your lifestyle and the way you spend. If you are a student, you should get a student credit card. If you are a business owner then a business credit card will fit you nicely. If you currently have bad credit then you may have to get a co-signer credit card or a secured credit card. Here’s how they work:

Co-signer credit cards build credit! If your credit is so short that you can’t get a regular unsecured credit card offer then you may be forced to get a co-signer credit card. Basically this is where you get a family member or friend with good credit to be your guarantor. If anything happens between you and your credit card company it will be their responsibility to take over. While this can be a risk for them, as long as they trust you, you can build credit until you are able to get your own credit card.

Secured credit cards are much like debit cards! Secured credit cards are a trusted way to build credit because they don’t allow you to spend beyond your means. As a matter of fact you can’t spend what you don’t have at all because you have to make a deposit first! This is how a secured credit card works: You go to the bank and fill out a bank credit card application. You deposit a certain amount of funds into an account and you can spend only up to that amount.

These secured credit cards look identical to any other VISA or MasterCard, only you can’t overspend! Why get one of these cards? If you have bad credit and are looking for a way to build it back up while not forfeiting the convenience of a credit card then you should apply for a secured credit card.

Strong credit histories come with time

The longer you can go paying your bills on time and in full the stronger and quicker your credit score will grow. Sure, you can use co-signer credit cards and secured credit cards to help you grow your credit quicker but having your own unsecured credit card is definitely the best option. The sooner you can get your very own card the better.

If you are interested in building your credit score to the best of your abilities then you should first understand how your creditors see you. Creditors pretty much focus in on your ability to pay back debts, your financial history and your personal assets. Each of these three categories will play a part in whether a credit card company will give you the best credit card deals. If a creditor feels that you don’t have the ability to pay your debts (not enough in savings/ investments), haven’t had a good history of paying debts (from your credit score) or have no personal assets of value (home, car, ECT) then they will most likely turn down your credit card application.

If you have never viewed your own credit history then you should go to one of the three main credit bureaus in the United States- Trans-Union, Equifax or Experian. Each of these bureaus will be able to pull your full credit history from file. What good will this do you? If you know what your credit score is you can better build it. Generally a good credit score is above 620. If you are over this amount then you will most likely be instantly approved for most cards. Above 720 and you will be labeled as excellent credit.

However, it is those that are under 620 that may be consider bad credit or poor credit. It will be much harder to get a good credit card offer with a score lower then 620 (scores go as low as 350, no credit). Your report pretty much figures out your financial responsibility- how much debt you have, how many types of credit you have, if you pay your bills on time or not, ECT.

Building your credit really isn’t that bad!

Many people view building their credit as the impossible task while it really isn’t too bad. Once you know what your credit score is you will be much more equipped to improve it. Knowledge is the key! If you find any negative, incorrect information on your report (as over 80 percent of people do) you should report it immediately as this negative info is dragging your credit score lower! If you want to dispute something on your credit report you should go to a consumer credit counseling agency or credit repair company. Law firms are also known for helping consumers fix problems on credit reports.

It doesn’t cost a dime to dispute incorrect information on your report, so go ahead! After you have fixed all of the negative info on your report you can start reapplying for credit cards. Here are the three biggest things you can do to keep your credit score growing:

• Pay your bills on time! This is the key to a financially secure future!

• Don’t pay just the minimums on your credit card statements! If you can pay your balance in full or at least two thirds of it!

• Don’t have too many credit accounts open at once! In other words don’t have 12 credit cards and a few loans under your name!