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No Credit Can be as Bad as Bad Credit, Yes It’s True

By Sandra Wellman


“I do not need a credit line or credit card; I pay all my bills each month with money.” Is this you? Well then, you are one of the lucky ones. In today’s world, we are almost required to have at least one major credit card. If you apply for a job, apartment, mortgage, car loan, or any other credit line you most likely will get rejected if you do not have one or any credit history. Most lenders will not give credit to anyone that has no credit history. The reason is that we are expected to establish a credit line when we are teens, and if we do not the lenders are often suspicious. The lenders can only base their judgments of you on assumptions. They have no previous record to go by. There are many reasons that lenders will refuse to give you a loan if you do not have any credit history. The best solution is starting up a line of credit now, pay your bills on time and avoid making purchases on items you do not really need.


Building credit can cause stress if you do not know where to get started. Creditors come in all forms and some of them are out to take you for a ride, so this alone makes the struggle increase. If you do not have credit, it is time to start building for a better future as soon as possible.


Instead of taking out a loan or applying for a credit card on your own, you might want to take a trustworthy friend or family member. Taking a friend or family member with you will come in handy when the lenders say, “do you have a co-signer.” After you are approved for a loan or credit card, make sure that you pay your bills on time to avoid defaults on your credit files as well as avoiding enemies. If you miss payments, the friend or family member that co-signed your contract is obligated to pay your bill.


When starting out if you don’t want to get a co-signer, you will have to start small, like getting a gas card, department store card or pay a small deposit on other services, like utilities or a cell phone. The latter will return your deposit after 6-12 months of on time payments and you’ll have a very good start to building your credit. You can apply for something every 4-6 months and you should be approved if you’ve been making your payments on time.


Making on time payments is more important than the amount of credit you have. I used to work for a cell phone company and they said they’d rather give a “no deposit” account to someone who had little, but good credit, than someone with more credit, but had some late payments. Be organized with your bills so you will pay them 5-8 days before they are due.


This all sounds crazy if you think about it. People everyday are filing bankruptcy, suffering debt issues, and so on, yet the system requires us to establish credit at an early age in life just to have basic things in life. The system is set up to get you one-way or the other.


Therefore, if you are building credit for the first time, make sure that you do not overdo yourself. If you are moving into an apartment for the first time, don’t go crazy on all the furniture and appliances you will need to fill it. It can be fun spending money, but you may get yourself into too much debt, more than your income allows. Before you move out, have a budget already to go and try to buy the small things you will need that you can store where you are currently living. Once you are ready to move, look in the papers for used furniture, tables, chairs, etc. Many people have “moving sales” because they are moving out of state and will not bring these items with them. You may get a good deal on a whole “lot”.


If you are purchasing a car, make sure you know what you are getting into to avoid future debt issues. When purchasing a car, consider one that is inexpensive and economical, to avoid overpaying for a fancy car that will only last for a short time. None of us really needs a Mercedes Benz, but some of us can afford it. If you can afford a Mercedes and know that your future is prosperous by all means, apply for the loan. On the other hand, if you see that your future is shaky and you do not have the funds to support an outrageous lifestyle, then, go for the Bug it is cheaper and it will save you from stress and getting bad credit in the future.


Building credit is building a better future. Nowadays it takes good credit scores to purchase a home, buy a car, get a credit card and so on.


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