In this times of recession .. times are bad .But often when you go to get a home loan or credit a established credit can help you get a loan or credit much easier .So a bad thing can also neccesarily be good.
When you don’t have a credit history, it can be difficult and frustrating when trying to obtain a credit card or other type of loan. Establishing your initial credit history can be a Catch-22. If you don’t have credit, not many places are willing to give you credit, yet how can you ever establish credit if nobody is willing to give you any?
There are a few things you can do that can help in your quest for establishing credit. The first thing you should do is open and maintain a checking and possibly even a savings account at a local bank. This is helpful in two ways:
When you have active bank accounts in good standing, you are proving that you can manage money. While bank accounts aren’t typically a part of your credit score, lenders can use this information to determine whether or not you are a credit risk.
Establishing a relationship with a bank will improve your chances in obtaining a loan or credit card through them. If you already do business with a bank, they should be the first place to look. They know you and they value your business. This existing relationship should carry some weight when seeking credit.
Believe it or not, a credit card is a good thing. It builds credit. That is, as long as you don’t use it to go out with your friends or buy stuff you don’t need.
Establishing a good credit history takes time. There are no shortcuts or tricks that can take you from no credit at all to a high score in a matter of months or even a few years. Your credit score is based on a number of factors such as payment history, length of time you’ve had credit, and much more. So, while it is important to initially establish credit, it is even more important to take the time to do the right things to maintain good credit.
You can establish good credit (so you can get things like a car).
It could come in handy if you have an emergency.
Some credit cards will insure whatever you buy with them.
You could max it out and get in way over your head.
You could be unable to pay your bill and mess up your credit (for SEVEN years)!