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Because having good credit is so important these days, many individuals are wondering how to get credit for the first time.  Getting credit for the first time can be difficult, depending on the actions that you have performed prior to applying for credit.  In the world of credit reports and frequently updated credit scores, even small mistakes can have a large impact on your credit history which affects your ability to obtain credit in the future.  In fact, many people have already done things that had an impact on their credit history before ever applying for a credit card or a loan.  There are things that you can do to improve your chances of getting credit for the first time and following these tips may allow you to obtain a lower interest rate for your credit products as well.

The Importance Of A Good Payment History

When attempting to get credit for the first time, it is important to remember that every payment that you make on accounts has the ability to affect your credit history.  Even if you have never applied for credit from a lender or a bank, a credit history is still being created which details some of the choices that you have made.  Late or missed payments can have a great impact on your credit history and may stay on your records for as long as seven years.  Maintaining a good payment history is very important when getting credit for the first time.

Finding A Co-Signer

Another important tip for getting credit for the first time is to “piggyback” on someone else’s credit until you are able to establish your own credit.  This technique works by having a person with established credit and a good credit history co-sign for a loan or a credit card, allowing you to obtain credit to begin establishing your own credit history.  The person that co-signs the loan for you should be some one that you can trust and that knows that they can trust you, like a parent, a grandparent, or other close family member.

Obtaining a co-signer to help you obtain a credit card or loan is one of the fastest ways to obtain a credit history, but there are some risks involved with the technique as well.  If the person chosen as a co-signer has had credit problems in the past, then they may not be able to help you get a lower interest rate than you would have qualified for on your own.  Another danger with this method is the fact that any mistakes that you make when using the credit card, such as missing a payment or paying late, will be reflected in the co-signer’s credit report and may create a reduction in their credit score.

Getting credit for the first time does not have to be a difficult task, but there are a number of different ways that can be used to make the process easier.  By remembering that virtually any transaction that you make has the potential to affect your credit score, you will insure that your credit history is positive, which will make it easier for you to get the credit products that you desire.

Too often, people overlook the importance of their credit rating and how it affects many different things in their life.  Your credit rating can affect the interest rate for loans that are made available to you as well as your employment and housing opportunities. Sometimes, blemishes on your credit history will start to show adverse effects when you need to purchase a car, when you would like to move into a new house, or when you need a loan to handle a financial emergency.  If there are blemishes on your credit history, you will be paying extra in the form of higher interest rates, shorter loan terms, and additional fees for obtaining the loan itself.

What Creates A Poor Credit Rating?

A poor credit rating usually occurs for one of two reasons.  The first is a number of missed payments or a pattern of late payments, which can lead to repossession and/or collection efforts directed toward the account holder.  The low credit rating will affect any purchases that require a line of credit and is a reason for the rejection of a credit application by most lenders.

The reason lenders deny credit applications based on a poor credit rating is because they gauge their risk of lending money to you based on your previous practices dealing with debt obligations.  By simply looking at your credit history, lenders can determine if you have abused your ability to obtain credit and your level of responsibility when handling your debts after receiving lines of credit.  If a lender has determined that you are a credit risk based on your credit history, they will most likely deny your application for any type of financial assistance that you seek.

The second reason that a poor credit rating can occur is too many open credit accounts or maxing out the credit that you have obtained.  Too many credit obligations can cause an individual to fall behind on payments or simply miss payments all together if some sort of financial hardship occurs.  If lenders believe that an individual is living on a circle of revolving credit rather than using credit to supplement their income, the lenders will determine that the person will not have the money to repay any additional lines of credit that they extend to the person.

It is important for every person to know where they stand with their credit rating. The credit market is more stringent today than it has ever been and it is vital to have a desirable credit profile if you need to use credit in the future.  If the person is aware of the standing of their credit rating, the easier it will be for them make the right financial decisions the future.

Your credit history is one of the most important pieces of personal information that you have because it is used in many different parts of your life.  An error in your credit history could end up costing you hundreds of dollars in additional interest payments, get you turned down for a loan, have your job application rejected, or disqualify you from renting a particular apartment.  Experts estimate that nearly 25% of adults have errors in their credit history through no fault of their own.  To fix errors that have been placed in your credit history, there are several steps that need to be taken to ensure that the information has been corrected properly.

1st Step – Take The Time To Review Your Credit History At All Three Credit Bureaus
Checking your credit history is one of the easiest ways to discover if there are errors that need to be fixed.  Errors in your credit history can cause a drop in your credit score which could result in increased interest rates and the denial of applications for loans or other financial products.  Reviewing your credit history reports from each of the three credit reporting bureaus will show you what information is in your credit history and allow you to spot any errors before they become major issues.  It is important to check the reports of all three credit reporting bureaus to make sure that none of them contain any mistakes.

2nd Step – Check Your Records For Any Information That You Have
If you do not remember having a delinquent payment on an account but one has been reported to the credit bureau, check any records that you have first before calling the credit bureau to report the error.  In some cases, it may be a case of a payment that was sent not being applied to the account but in other cases, you may have never made the payment even though you thought you had.  By checking your records first, you will refresh your memory about the situation and will know what to say if you need to contact the company about an incorrect item on your credit history.

3rd Step – Call Or Contact The Credit Reporting Bureau To Have The Error Corrected
If incorrect information is found in your credit history, you will need to contact the credit reporting bureau to have the information corrected.  You will need to explain why you believe that the information in your credit history is inaccurate and ask the person that is helping you which steps you will need to take to correct the situation.  The credit reporting bureaus are required by law to investigate allegations of incorrect information in a credit history and must correct any information that is found to be invalid.

4th Step – Make A List Of Who You Talk To And When You Talked To Them
When you deal with a company or a creditor, you will want to create a log of what people at the company you communicated with and when the contact occurred.  Every time that a different person is contacted about the incorrect information in your credit history, you should write down their name, position, method of contact, and the time of the contact.  If any documentation must be sent by mail, pay the extra for a delivery receipt so that you know when the documentation was received by the company and which person at the company signed for the documentation.

5th Step – Take Your Case To Court If Needed
If the company is being uncooperative about taking incorrect information out of your credit history, it may be necessary to plead your case in court.  In most cases, the threat of having to prove to a court that the information that the company submitted to the credit reporting bureau is valid is enough for them to agree to remove the incorrect items from your credit history.  Keeping a record of what steps have been taken to correct the issue will be valuable if you need to testify about the situation and may even prove your case.  It is important to treat going to court as a last resort and attempt to resolve the situation using other means first.

There are 4 different credit card mistakes that people commonly make that lower their credit score, resulting in the person being less credit worthy to the credit card companies.  Most of the common credit card mistakes are items that many people would not even imagine affecting their credit score, but the reality is that there are many items that can influence your credit score that you may not be aware of.  If you can steer clear of the common credit card traps that millions of people fall into each year, you can keep your credit score elevated and the interest rates for your credit cards low.

Delinquent Payments
The most typical mistake that many people make when it comes to credit cards is to believe that a delinquent payment on their credit card is not important.  Some people think that the only consequence of a delinquent payment on their credit card is a penalty charge and are willing to pay the charge to avoid having to pay the minimum amount due on the credit card at that time.  These people do not realize that not paying a payment on time will also be reported on their credit report and will lower their credit score by a significant amount each time it occurs. 

Not Keeping Credit Card Information Secure
Another common mistake that many people make with their credit cards is to not keeping the information about their credit cards secure.  Preventing the information from being stolen by scam artists and thieves is simple as long as you are diligent about protecting your personal information.  These thieves know how to capitalize on common mistakes that people make when distracted or not paying attention to the information that they are giving out on the internet, on the phone, or by mail and can open many different credit accounts in a person’s name with a small amount of personal information disclosed.  It can take years to repair the damage that these thieves can do your credit score.

Not Paying Off The Balance Of The Credit Card
The best way to use your credit card is to only charge the amount that you are able to repay each month.  If you pay off the balance of your credit card each month, you will not only save a lot of money in interest payments but you will also raise your credit score by demonstrating that you know how to use credit responsibly.  The credit card companies may increase your credit limit so that you have more credit available if you need it because they know that you will repay them at an acceptable rate.

Maxing Out Credit Cards
Another common credit card mistake that many people make is to use most of their credit line or max out their credit cards.  Companies that issue credit card consider people that use more than 50% of their available credit to be a credit risk because the company assumes that the person is using their credit to extend their monthly salary and maintain their lifestyle and will not have the ability to pay the money back promptly because they are spending all of their salary plus more each month.  There have been many cases where a person was not allowed to take out a loan or an additional line of credit because they had used a more than 50% of their available credit and had been labeled as a credit risk by the credit card company.

Making mistakes with your credit cards can be an expensive proposition. Your credit score can be negatively impacted and your ability to increase your credit lines on your existing credit card offers can be hampered significantly. So if you’re in the market to make a with one of the better 0 APR credit cards available, make sure that you don’t make these common credit card mistakes.

With the economy in the state that it is in today, learning how to get your credit report for free can be a very important for maintaining a good credit history.  When you review your credit report on a regular basis, you have the ability to verify that there are not any mistakes on your credit report that could drag down your credit score and you can make sure that no other person has opened a credit account in your name that you are unaware of.  Errors on your credit report can reduce your ability to buy a home, buy a car, or obtain a credit card.  Errors on your credit report can also result in lenders charging you a higher interest rate than you would have qualified for if your credit report had been accurate.  There are several different ways for a person to get a credit report for free and some methods are better than others.

Free Credit Report Websites

There are many websites available on the internet that will show you how to get your credit report for free.  The most popular websites for obtaining a credit report will normally allow the person to view a credit report from one of the three major credit reporting agencies; Experian, TransUnion, and Equifax.  A credit report from any of these agencies will provide a complete picture of any activities that have been added your credit report. 

The credit reports obtained from the credit bureaus will list any accounts that have been opened, any late or missed payments that have been reported, and the limits of the open credit accounts.  Having this information in hand allows you to check your credit history for any suspicious items that other people may have placed in your credit file.  It also gives you the ability to dispute any mistakes that may be on the credit report before it affects your ability to obtain a loan.

People need to exercise caution when obtaining a free credit report from one of these websites.  Many of the websites that offer free credit reports will automatically sign you up for a credit monitoring service when you request access to your credit report.  This credit monitoring service will send an alert to the person when any changes are made to the credit report.  The credit monitoring service is typically free for the first 30 days and then the person is charged a fee, usually charged monthly, to continue using the service.  Some people that have obtained their credit report from one of these websites have reported that they had a great deal of difficulty unsubscribing from the service and were sometimes re-enrolled in the service without their authorization, so it is important to be cautious when requesting information from these websites.

Official Government Website

There is only one website authorized by the Federal Government for people to obtain a credit report for free without any strings attached.  That website is annualcreditreport.com and is run by the three major credit reporting agencies who handle the majority of credit reporting in the nation.  This website allows consumers to obtain one credit report from each of the three credit bureaus for free each year.  The website teaches people how to get a free credit report without any of the additional services required by other websites that offer free access to the person’s credit report.

Many people do not understand how important a good credit report can be to your future happiness.  A credit report is one of the first things that many lenders and creditors look at when trying to determine whether or not to give you whatever items you have requested and has the ability to affect many different areas of your life.  Keeping your credit report positive and ensuring that there are no negative entries on your credit report can go a long way towards helping you get the things that you want in life.

1. Credit Approval
Having a good credit report means that you have a good chance of being approved for additional credit or loan products in the future.  Whether you are looking for a new credit card, to purchase a new car, or interested in getting a mortgage loan, a good credit report will increase your chances of getting approval from the lender or the credit card company that you are interested in doing business with.

2. Higher Credit Limits
If your credit report does not have anything negative reported on it and the length of your credit history is significant, then many lenders will approve you for a higher credit limit than they would have if you had a shaky credit history.  For example, a person with an average credit report may be approved for a credit line of $5,000 where a person with an excellent credit report could be approved for a credit line of $10,000 or more.  This gives the person increased purchasing power for the things that they want and allows them to have enough credit in reserve for any financial emergencies that may arise.

3. Lower Interest Rates
People that have a good credit report will typically qualify for a lower interest rate on their loans and credit cards than a person that has a lot of negative information on their credit report.  This is because a good credit report means that you will not be a credit risk for the company that approves your request for a credit card or a loan and they can give you a lower interest rate because there is a very good chance that they will be receiving their money back in a timely manner.  Having a lower interest rate on your credit cards and your loans can save you hundreds of dollars in interest payments each year.

4. Employment Approval
Many employment positions where the person would be operating in a position of trust have started to review the credit reports of applicants for the position to determine whether they would be trustworthy in the position.  The reasoning is that people that are good about paying their bills and their loans on time would be less likely to steal from the company or abuse the trust of the customers that give them access to their financial information.

5. Rental Approval
If you are looking to rent an apartment, a condominium, or a home, the landlord will typically request your permission to review your credit report before approving your application for renting the property.  Because it can be very costly to evict a tenant for the non-payment of their rent, many landlords want to know that you do not have a history of not paying your bills before they agree to allow you to occupy their property.

Your credit report has the ability to affect many different areas of your life and a bad credit report can have you denied for many things that you probably would never think of.  Because it is much easier to maintain your credit report than to repair it, it is very important that you do all that you can to prevent negative information from going onto your credit report.

One of the easiest and fastest ways to lower your interest rates and keep more of your own money in your pocket is to correct any mistakes that can be found on your credit report.  It is estimated that as many as 25% of the credit reports generated by the three major credit card bureaus contain some type of mistake that could have a negative effect on your credit score.  By having these mistakes fixed, you can raise your credit score which in turn will lower your interest rates for credit cards and other types of loan products.

Step One – Check Your Credit Reports
It is very important that you check your credit reports from the three major credit bureaus on a regular basis to look for any mistakes that may have been made on your credit report.  Each of the three credit reports can be obtained for free once per year at annualcreditreport.com per a law passed by the United States Government to protect consumers from fraudulent information being placed on their credit reports.  Reviewing the credit reports on a regular basis will help you find mistakes quickly while they are still easily corrected.

Step Two – Nicely Ask To Have Mistaken Items Reviewed And Corrected
Credit reporting bureaus are required by law to investigate any claims of mistaken items entered onto a credit report if the person requests that an entry be validated.  Calling and harassing the person that you need to help you will only make them less inclined to assist you and may make it even harder to get your credit report corrected.  Talk to the person that is trying to help you in a calm, clear manner and let them know exactly why you believe that the information incorrect and what proof you may have to validate your claim.

Step Three – Keep A Log Of Who You Talked To And When
Although many mistakes that are commonly found on credit reports can be taken care of quickly and easily, in some cases it will take multiple calls to multiple people to have the situation corrected.  It is very important for you to keep a log of who you talked to at what company while trying to take care of the issue so that further down the road you will have an accurate account of the steps you have taken to attempt to correct your credit report.  This will also allow you to sound intelligent as you move up the ranks of the company from the customer service reps to the managers because you will be able to tell them which employees from their company you have already spoken to.

Step Four – Check To See If You Have Any Independent Verification Of Your Claim
Most of the cases of incorrect information being placed on the credit report are a result of a company claiming that they never received a payment that has been paid.  In these cases, you may be able to prove that you have paid the company the money that was owed by producing a bank statement or a check receipt indicating when the company was paid and when the money was taken out of your account.  If an account for you had been opened for an address that you have never lived at, residency documents can prove that you had never lived at that address and the account is fraudulent.

Step Five – Prepare To Argue Your Case In Court
If all other reasonable avenues of dialog with the company have failed, you may need to prepare your case to be taken to court.  This is where records and detailed logs become helpful as you will be able to show the judge that you have done everything possible to have the issue resolved through other means and that you are truly dedicated to having the issue resolved.  For many cases, the company will be willing to settle and fix your account rather than having to prove their case in court, especially when they are the ones that are wrong.

Although credit reports have been around for a very long time, many people still do not understand what their credit report contains and how it will affect their lives.  Because of this lack of understanding, many people dismiss the importance of their credit report and neglect to review it for inaccuracies or negative information.  The truth is that a credit report is one of the most important financial instruments used today and it can have a bigger impact on your financial future than any other item in your life.

What Is On A Credit Report?

Your credit report is a very important part of your financial future because this is the information that most creditors look at when determining whether you are credit worthy or not.  Your credit report contains a history of every account that you have ever opened and the status of those accounts, whether they are current or have had late and missed payments in the past.  Your credit report also details any credit obligations that you have defaulted on in the last 7 to 10 years, with balance amounts and the length of time since the account has received a payment listed beneath the name and address of the creditor.

Your credit report details your credit history which is used to determine your credit score.  If there are numerous defaults and late payments listed on your credit report, then your credit score will be decreased for every piece of negative information that is reported to the credit bureaus to be listed on your credit report.  Even having a creditor pull your credit report to determine your credit worthiness can decrease your credit score by 5 points per occurrence.

How Does This Affect Me?

If there is a lot of negative information listed on your credit report, it could cause a number of problems in different areas of your life.  Creditors, such as mortgage lenders, credit card companies, and car dealerships, may deny you credit because you are considered a credit risk and they do not know if you will pay back any loan that they extend to you.  Obtaining a credit card from a retail store may be difficult as well, as they also determine whether they should give you credit based on your credit report and credit score.

Credit reports are used in other areas of your life as well.  Some employment positions use your credit report as an indication of your level of personal responsibility and may be reluctant to hire someone that has a bad credit report.  People have also been turned down for apartment rentals because of a bad credit report indicating to a landlord that you have trouble paying your creditors and may not pay your rental payments on time.  Your credit report is very important to your economic future because it can affect so many significant areas of your life.

Your credit score is a very important part of your financial future, affecting a number of different areas of your life.  A bad credit score from excessive balance transfers or otherwise can affect your ability to obtain a home loan, a car loan, an apartment, even a job.  There are several things that will definitely destroy your credit score and these actions should be avoided at all costs.

Credit Score Killer #1 – Late Payments On Your Credit Cards

Information about your credit card accounts is the easiest information for the credit bureaus to obtain and is the information most likely to affect your credit score.  If you regularly miss payments on your credit card accounts, that information is being reported to the credit bureaus each time and each time your total credit score is being decreased by a significant amount.  If you miss several credit card payments on several different credit card accounts, your score could decrease by 100 points or more in a relatively short period of time and it may take years to rebuild your credit score to its previous level.

Credit Score Killer #2 – Canceling Old Credit Cards

An important part of your credit score is the length of your credit history, which is often calculated by how long you have held your credit card accounts.  Canceling your oldest credit card, even if you have not used it in a while and do not intend to use it in the future, reduces the length of time listed in your credit history and can drop your credit score by a large amount.

Credit Score Killer #3 – Maxing Out Your Credit Limit

The amount of your available credit that you are using at any given time is another credit criteria used by the major credit bureaus in calculating your credit score.  If you are using close to your total amount of credit available, credit bureaus determine that you are not using your credit wisely which in turn causes them to drop your credit score because you are now a credit risk in the eyes of the lenders.  To keep your credit score high, you should be using no more than 50% of your available credit on each of your credit card accounts.

Credit Score Killer #4 – Opening Numerous Credit Accounts

Each time your credit score is pulled to determine your qualification for a new credit account, the credit bureaus reduce your credit score by 5 points.  Opening a number of accounts at the same time could reduce your credit score by a significant amount and even drop you into a lower credit score bracket.  Also, having a large number of revolving credit accounts, such as store credit cards, signals to the credit bureau that you have the ability to create a great deal of debt quickly, which makes you a credit risk. Having two many credit card applications open at once is a killer.

Credit Score Killer #5 – Not Reviewing Your Credit Report

It is estimated that nearly 25% of all credit reports contain an error and the size of this error could be costing you when it comes to your credit score.  Most of the information that is included in your credit report was entered into a computer system by a person, making that information susceptible to human error.  If the information found in your credit report is inaccurate, the credit bureau has a legal obligation to determine the validity of the debt reported and remove the debt from your credit report if it is not a valid debt.

Incorrect credit histories are much more common than many people would imagine.  Some experts estimate that nearly one-quarter, or 25%, of adult individuals have mistakes on their credit reports through no fault of their own.  This is not difficult to imagine when you realize that the huge volume of credit information available on each individual with a credit history is handled by the three main credit bureaus of the nation, Equifax, Experian, and Trans-Union.

To fix incorrect information that has been issued to your credit report, there are several things that need to be kept in mind.

Tip 1 – Review All Three Credit Reports On A Regular Basis
Not checking your credit report is one of the biggest financial mistakes that you can make and the neglect could be costing you a great deal of money.  Incorrect items on your credit report can cause your credit score to drop, resulting in higher interest rates and the denial of credit in some cases.  Not all of the credit reports from the three credit reporting bureaus will reflect the same information so it is really important to check all three to make sure that none of them have any mistakes on them.

Tip 2 – Be Professional At All Times
The old saying that “you catch more flies with honey than with vinegar” holds very true in the case of an incorrect entry on your credit history.  You will want the person that you talk to about the issue to help you and that person will be more inclined to help you if you are nice and non-confrontational than if you call the company ranting and cursing about how they made a mistake and that they better fix it.  By speaking in a calm, clear manner, you will be better able to explain why you believe that the information in your credit report is inaccurate and will be able to understand which steps you will need to take to correct the situation.

Tip 3 – Keep Track Of All Steps Taken
When dealing with companies and creditors, an accurate log of whom you communicated with and when could be an invaluable asset.  Every time that you talking to a person about the incorrect information on your credit report, you should write down their name, position, way to contact them again, and when you talked to them.  If sending correspondence by mail, be use to request a delivery receipt so that you know when the information was received and who signed for it.

Tip 4 – Verify The Information To The Best Of Your Ability
In some cases, the information that has been reported to the credit bureau is accurate and it is the individual’s records that are flawed.  If you do not remember missing a payment on an account or you believe that a payment was not applied to the account, check your records first for confirmation before you call the credit bureau or the creditor and alert them to the situation.  If you do find that the credit report is accurate and the mistake was on your part, try to fix the mistake as soon as possible, by either paying the amount owed on the account or talking with the creditor to create a repayment plan for account balances that are large.

Tip 5 – Be Prepared To Take Your Case To Court
Although no one would like the situation to get this far, sometimes it is necessary to go to court to plead your case about removing incorrect items from your credit report.  Having accurate records of the steps that you have taken to correct the situation will be very beneficial if you are called to testify in court about the situation and will go a long way towards proving your case, as records show that you tried to resolve the situation by other means before going to court.