Credit Card FAQ

How to Build Credibility?

5 April 2011 by CreditCardsCo™

While the financial situation is tough for most working people across America, getting credit and building credibility is getting tougher. For young Americans out of college, new immigrants, and people with a bad credit rating, the current economic scenario is certainly affecting them adversely.

But things are improving, albeit slowly. As more and more banks restructure themselves to operate in the uncertain climate, building credibility may be tough but definitely not impossible. Many upcoming and small businesses need credit and the banks and credit unions are willing to offer them.

The Need for Good Credit

The magic words for today's financial times are "good credit" which in general terms translates to high credibility. Having good credit to your name has a lot of advantages. Qualifying for mortgage loans with low interest rates is a big incentive for building a good credit history. The ease of availability of Student loans, car loans and even employment are all related to having good credit.

High fiscal credibility means that you can literally save thousands of dollars over a lifetime. It also means that you qualify for better offers everywhere you go — whether in business or vacation travel, hotel deals, credit cards, buying boats or RV's, new products — everything can depend on credit scores.

Today's generation needs the power of credit to be working for them. Whether it is telephone bills, airline tickets, hotel bookings — everything needs a credit card. With a good credit history, getting a good credit card is practically a non-issue.

Building your Credibility

Too many people end up learning about credit the hard way. Building credibility in America is one of the most important and serious aspects of life in this country. There are many things you can do to begin building good credit.

  • Start with a bank account. If you don't already have one, open a checking account with any bank. Maintaining a good account over a period of time takes a little bit of effort. This effort goes a long way in establishing credibility. A well maintained bank account without any overdraft problems can be a good way of establishing financial responsibility — one of the many things that credit bureaus look at.

  • Apply for a secured credit card or a low interest credit card with low credit limit. One of the best ways to build your credibility is to prove that you can be responsible with credit. Many banks offer secured credit cards. The idea is that the deposit covers the credit limit and paying bills on time ensures that good credit behavior is reported to all the credit bureaus.

  • Never pay minimum balance on your card. Paying minimum balance is not a good habit and it never resolves debt. Always pay as much as you can and pay all your bills in time. Establishing credit score and good credit history means showing good credit behavior.

  • Apply for and pay off a personal or a store loan. For example, try to use store credit when purchasing a computer. Just make sure that the loan is a fairly short term loan, one which you can pay off completely within six months. You many need a co-signer if your credit history is too short. Once you are approved, pay off the bills every month on time and reap the benefits as your credibility starts building. Your credit report will show the amount of loan taken as well as your payment history.

  • Keep a track of your financial health. With most banks having ATMs, online banking, mobile alerts for transactions and websites offering free credit ratings, it is easy to maintain a record of the progress you have made in building a good credit. Use these tools effectively to serve your purpose. Building a good credit history takes time. Earning credibility can take effort, but when you start saving money on insurance, interest rates, mortgage payments — it is all worth it.

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