Secured Credit Card to Establish your Credit History
What is credit history?
Your credit history is a list of facts gathered from financial institutions, utilities, retailers and other lenders, on how you have handled credit in the past.
The three credit reporting agencies monitoring exercise on the habits of borrowing and repayment.They then assign a credit rating. A good credit score is proof for lenders that you pay your bills and make payments on time.
When you apply for a loan from a bank or open an account with a utility company, for example, the bank or the company will check your credit history before approving your application.
A helping hand to establish credit history
One of the simplest and most effective to start building credit history is to apply for a secured credit card: Visa or Master Card.
Using your secured credit card and making regular payments, you gradually build your credit history. Later, when you request a bigger credit, your track record will help you get a good credit rating.
It can take 18 months to establish a good credit rating. It is therefore important to start the process now.
Why do you need a credit card?
This is a convenient way to pay for goods and obtain services;
credit cards are essential in some cases, such as establishing a contract with a cell phone company, renting a car or shop online;
they allow you to make routine purchases without having to keep large sums of money on you; they can often serve as identification.
Who should have a credit card?
You can also designate another person – your spouse, for example – as co-owner of your credit card. The co-owner will receive a separate card, but since you are the primary owner, all purchases charged to the card included in your account and contribute only to establish your credit history.