Credit Survival

Good ways to start establishing credit:

• Opening a credit card in your name (paying balance off monthly)
• Open a bank account and use it responsibly
• Pay your bills on time
• Put utility services in your name, including your cell phone bill
• Visit this site: Control Your Credit
  

Here are some steps you should take to maintain a solid credit history:

• Establish a realistic budget and stick to it.
• Always make your bill payments on time, including your student loans
• Pay more than the minimum monthly amount on your credit card.
• Spend within your means – buy it only if you really need and can afford it.

You will eventually build up your credit history, and this will show up on a credit report. You need to ensure that your credit report has only good things to say about you. It is important to view and understand your credit report annually. You are entitled to a free copy of your credit report, once every 12 months. For more information visit, www.annualcreditreport.com or call 1-877-322-8228.

Credit Cards, Good and Bad

Having a credit card with a low balance, which you make regular payments on, is a good idea to establish good credit. Be sure you are aware of the terms and conditions of your credit card before accepting one. Things to look for are:

• Low, fixed annual percentage rate
• Reasonable grace period
• No annual fee
• No or minimal penalty fees

The following is an example of using your credit card, to put into perspective the time it will take to pay off your debt.

• Charge $1400
• Minimum Payment $28
• Interest rate 18%
• Number of payments 93 (nearly eight years!)
• Total repayment of $2607

Learn more about managing your credit card:

• www.nfcc.org
• www.truthaboutcredit.org
• www.bankrate.com

What’s Your FICO score? (www.myfico.com)

A FICO score is a credit score based on the information provided in your credit report. A FICO scores is an excellent predictor of an individual’s level of future credit risk. The higher your credit scores is the better chance you have of getting the credit you want. Some tips for improving your FICO score:

• Be diligent about reviewing your credit report yearly. This will ensure that the report is accurate and without errors.
• Always pay your bills on time.
• Keep balance ratios at or below 25 percent of your total limits.