Obtaining Credit

Loans | Credit Cards | Acceptance | Sample Credit Applications

What is credit?
Credit is provided based on the trust that you will repay within a specified time. It is an agreement that allows you to use goods and services today and permits you to pay on some agreed schedule in the future.

Where can I get credit?
Banks, credit unions, savings and loan institutions, department stores, utility companies, government-guaranteed student loans, finance companies, credit or charge card companies.

Obtaining credit can be a difficult task. Whether you are looking to establish your credit for the first time or need to re-establish credit from previous problems, you almost certainly will need some sort of credit card--not only to use for purchases but also, with a good payment record, to give you a good credit rating.

Here are some tips to help you get started with obtaining credit:

• Open a bank account and use it responsibly. This is the first step in establishing a financial history.

• If you have utility services in your name (telephone, gas or electric), make sure you pay them in full and on time.

• Apply for a credit card. Shop around and only apply for a card if you can meet the lender's requirements. Responsible use will help you build a good credit history. If you have been denied a credit card in the past, you may want to consider a "secured" credit card. A secured card is often considered a "first step" for those with little or no credit history. A deposit is required and the spending limit on the card is usually equal to the amount of the deposit. The secured card can be used in the same way as a credit card with the same convenience and payment flexibility.

• Consider applying for and using a credit card offered by gasoline companies and retail stores. These typically have low credit limits and if you are spending responsibly, you can pay them off each month.
  
• Create a spending plan. Before you use your credit card, you will want to make sure that you are able to pay off the balance on the items you plan to purchase. Write down all of your expenses and your income and adjust your spending accordingly.
  
• A secured card is an option. If you have trouble qualifying for a credit card, you may opt to apply for a secured card. These cards have credit limits based on a required deposit made by you into a savings account. You use the card just as you would any other credit card.

• Always pay any loans and credit accounts on time each month. Be sure to always pay at least the minimum amount due.