How To Get Credit

Learning how to get credit is a part of every young adult’s life in most industrialized countries.  Having a good credit history is the key to unlocking home ownership, automobile insurance, and future financial security.  It is very important to maintain a healthy credit rating, but in order to maintain a healthy credit score you must first learn how to get credit.

How to Get Fico Score

The first thing that you should do when you get ready to establish your credit is to learn how to get credit score information. Your credit score or fico score is tabulated based on what the three major credit reporting bureaus have on file for you. The fico score is based on a model that was devised in the late 1950’s to help fairly judge the creditworthiness of an individual.  US citizens are entitled to get fico score information each year for free at annualcreditreport.com.  If you are denied by a credit card company you are also entitled to get fico score information detailing why you were not approved. It is very important that you know how to get credit score or get fico score data.

How To Get Credit Cards

Once you have learned how to get credit score information it is time to do something with the information you’ve gathered.  The best way to do to this is to learn how to get credit cards. The best way to jump start your credit, if your credit is good enough to get you approved is to try to get credit cards through gas stations, department stores, or your bank.  These cards carry a higher interest rate but are usually very easy to obtain compared to major credit cards.

If you are unable to get a credit card from a gas station or department store than you should consider getting a secured credit card.  These cards are usually very easy to get because there is no risk on the behalf of the creditor.  You are given a card that you prepay with a certain amount.  You are able to charge up to the amount you paid in advance.  Many of these card companies still report to credit bureaus, making them a great way to jump start your credit.  After you have had your card for about 6 months you should get fico score data again to see how you are doing.

Once you have learned how to get credit by getting a credit card you need to know how to use the credit card to your advantage. You need to use your card regularly to obtain a good credit rating and appear a worthy customer to credit agencies.  You do not ever want to charge more than you can pay off in a month however and you do not want to continuously carry the entire balance of your card.

Maintaining Your Good Credit

Though using your card is a good thing, you ideally want to keep your card at 20% of its balance or less.  For example, if you are approved for a $1,000 limit on your first card then you do not want to keep the balance above $200.00 for any extended amount of time.  It would be even better to keep the balance at $100.00 or less.  This is a very important step in learning how to get credit.

Once you know how to get credit you should always strive to get fico score ratings above the median which is in the 700’s.  This will help to maintain your credit. It may take you a while to get fico score ratings above 650 but once you get there you do not want to do anything to damage your hard work.