If you don’t have a credit card, you really should get one. Today, almost everyone in America has one, and so should you. Using a credit card is an important way to build better credit. But if your credit rating is so bad that you can’t get a credit card, don’t worry. Help is available. There are privately operated agencies that specialize in obtaining credit cards for “hopeless cases,” and they only collect a fee if they succeed. They’re usually listed in the Yellow Pages under “Credit Cards” or “Credit Counseling.”
These agencies may also advertise in your local newspaper’s classified ad section, or even in the big national papers such as the Wall Street Journal and USA Today CVV shop.
If you cannot obtain a major credit card like Visa or MasterCard, you may still be able to obtain a nationwide retail card even without the help of a special agency. Wards or JC Penny credit cards are ofter among the easiest to acquire, and they are good at any of their stores across the country. A Sears card, though, is generally a little more difficult to obtain.
If you cannot obtain a national retail credit card, try going to a major local merchant, such as a department, furniture, or appliance store. Since they often have their own credit cards or charge accounts, you can try to open your own account with them. Since you live nearby, they may be more willing to issue you their card. You should then use it and pay a few monthly installments and then apply for a national card.
But if nothing else works, try this: Go to a bank that offers Visa or MasterCard, and ask if you could open a charge account with a credit balance. This means you would apply for a credit card in the usual way, and then send along with the completed application a check for several hundred dollars. Ask the bank first how to handle this.
What you are requesting is that the bank Visa or MasterCard extend credit to you in the amount already covered by your check. It amounts to paying in advance for charges in the future. After yo have exhausted your credit balance, be sure the bank is willing to continue extending credit in this fashion for as much of an advance deposit as you are able to make. After a time, your bank should be willing to extend a small line of credit to you without the necessity of depositing in advance. If so, be sure to make all future payments on schedule for whatever you charge to the account. This begins to establish a good credit history, which is the surest way to build better credit.
If you don’t have to start from scratch and already have one or two credit cards, you should ask for others from other national creditors, such as American Express or Discover. Also get another national retail card like Sears or even Home Depot. You can secure one type of card for each type of purchase, and you should definitely start using these cards wherever you used to pay in cash or by check. You want these purchases and your payments to be reflected on your credit report. Continuing to pay in cash or by check does you absolutely no good in terms of improving you credit rating. Use the cards with your merchants and send your checks to the credit card company. Then later, when you go in for your first mortgage loan, your excellent credit history will have already been estabished.
But you must be careful. Don’t go hog wild with all your extra credit cards. If you think you may have trouble keeping a handle on your purchasing, restrict yourself to the use of one or two cards only. Another “trick” of any potential major lender is to add up the credit limits for all your credit cards, which can be a fairly high amount. And even if you never use all those cards, a potential lender might easily think that you could be tempted by such high credit limits to go in over you head and obligate yourself to high monthly payments which you could never afford. So be careful. Evaluate your ability to make payments, and maintain only as many cards as you can handle.
Nowadays, because of the feverish competition among credit card issuers, many such companies have lowered their annual fees and interest rates to some very affordable levels. Sometimes there is no annual fee, and sometimes the initial rate of interest is lower than most home loans. Be aware, however, that those rates ofter increase sharply after six months.
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