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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.

When a person has been a victim of credit card theft, often their first indication of the violation is charges that cannot be explained appearing on their credit card statement.  Without knowing the proper way to dispute these charges, the victim may be held liable for these charges and will end up paying for items that criminals have purchased using their credit card number.  Most credit card companies have policies that state that the victim will not be responsible for charges made on their credit card due to criminal usage, but the charges will only be dismissed if the person knows how to properly dispute the charges.

Review Your Records

If a credit card charge that is not familiar shows up on your credit card statement, the first thing that the person should do is review their records to determine whether they may have forgotten that they have made the charge.  There is nothing more embarrassing than attempting to dispute an unauthorized charge and realizing that you were actually the one that made the purchase.  People that use their credit cards on a regular basis should especially be careful because it is very easy to forget about a charge or miss identifying a charge that shouldn’t be there.

Inform The Credit Card Company Of The Charge

If a charge that cannot be explained does appear on your credit card statement, it is important to inform the credit card company of the unauthorized charge as quickly as possible.  In many cases, the charge that is made on the credit card without your consent will be one with a high dollar value as the thief tries to obtain as much as they can from the account as quickly as they can before their actions are noticed.  If the credit card has only been used for purchases less than $100 in the past and all of a sudden a $600 charge on the credit card appears, this is a good indication to the credit card company that the purchase may have been fraudulent.

The faster the charge is reported to the credit card company, the easier the charge will be to remove from the account and the better chance the company will have of finding the thief and prosecuting them.  If more than a few days has passed since the charge to the account has been made, the credit card company may require that you send them a written statement attesting to the fact that you did not make the charge and that you do not know who charged the purchase to your account.  These written statements often have to include permission for the company to prosecute whichever person is found to have used the credit card or credit card number to make the purchase. 

Keeping Track Of The Issue

After the credit card company has been contacted about the unauthorized charges on the credit card account, it is important for you to continue to monitor the situation to make sure that it is taken care of.  You should save the credit card statement that includes the unauthorized charge until the next credit card statement arrives so that you can make sure that the charge has been taken off of the account and the account balance has been corrected.  If you have online access to your credit card account, you may want to monitor the account online to make sure that the representative at the credit card company has taken care of the problem.

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.

Any financial expert will tell you that we are facing the biggest financial dilemma the country has ever seen.  Along with the nation’s financial crisis and credit crunch, an increasing number of individuals are falling deeper into personal debt with very few solutions for extracting themselves from this financial quagmire.  So how did this sorry state of affairs come to be?

The Steps That Led To Disaster

For quite some time, many individuals have been living lifestyles that are beyond their financial means and financing their lifestyles with credit cards and home equity loans.  A number of people purchased new homes that they could barely afford, taking advantage of the lax lending standards prevalent at many banks and lending institutions.   People were rewarded with low interest loans on homes that were priced much higher than what they could actually afford.

Other people obtained high limit credit cards and spent recklessly, never thinking of the day when the balance would become due.  The credit card companies began to offer double and triple reward points for major purchases on credit cards and our nation’s leaders pushed people to spend money to stimulate a suffering economy as a patriotic act.  Many companies capitalized on this trend by convincing people that they needed their products and services, no matter if it was for the latest fashions, the newest cell phone with the best data plan, or acquiring the home of their dreams without having to prove that they could afford it.

These simple luxuries were the catalyst that started the trend of individuals slowly growing deeper in debt, gradually chipping away at the savings many of us had tucked away for a rainy day.  Our outlooks toward finances were changed from saving for the future to spending just to save our future.  Now, those days of easy credit are gone and the credit crunch is quickly cutting off the circulation of cash that people had used to support their lifestyles.  The lending standards and interest rates for home equity loans are at an all time high and many people are obtaining them to pay off the other lines of credit that they had relied on in order to maintain their lifestyles. 

What Must Be Done

Some people believe that in order for them to pull away from the hold of debt, they should eliminate that debt by paying it off quickly, which in theory is a good method of getting out of debt.  However, paying off loans with more credit based loans or home equity loans is not the answer.  Credit based loans and home equity loans will just transfer debt from one place to another, which does not solve the problem

The simplest and most effective solution for getting out from under mounds of debt is to monitor your spending and cut back on the extras. Take any extra money that you may have after paying your monthly obligations and apply it to your debt instead of spending it on frivolous items.  Personal restraint in your spending is the only way to truly become debt free and the more restraint that you exercise, the faster you can eliminate your debt and the headaches that come with it.

As the economic climate of the country continues to deteriorate and threaten the stability our finances, many people are trying to figure out a way to save money for their retirement needs.  As we witness home values and employment opportunities plummet, many people are wondering whether they will ever be able to retire and if there is any way to obtain a secure financial future.  Although circumstances are difficult currently, it is very important for people to continue saving for retirement and for their future.

Planning for retirement is very important regardless of whether the economy is showing signs of strength or weakness.  What many people fail to understand is that the time that the person will be beginning retirement is growing nearer each day and each day that passes without any money going toward the growth of your retirement account cannot be recovered at a later date.  Most individuals know that time is of the essence when it comes to being able to save enough for retirement and yet still fail to place enough into their retirement accounts to be able to live comfortably in the future.

Elevate The Importance Of Saving For Retirement

Many individuals believe that saving for retirement should be put off during economic downturns, keeping the bulk of their income for the immediate financial needs at hand.  These people may decide to lower the amount of their monthly contributions to the retirement account, redirecting that money back into their paycheck where they will pay taxes on the higher amount before pocketing the additional amount.  Redirecting funds from a retirement account is one of the worst things that you can do during an economic downturn because you are taking money from your future to pay for your present.

The first thing that should be done to secure your finances during an economic downturn is to slash any non-essential spending from the monthly budget.  Sacrificing the luxuries now will ensure that we will be able to afford some luxuries later in life. Many people can save $15 to $20 dollars a month just from deleting extra services on our cell phone bill along, not to mention dialing back the “Super Hi-Speed Internet Connection”, or taking the time to cook a meal instead of going to a restaurant to eat. Once people can begin to audit their spending honestly and quit spending money on items that they really do not need, many of people start to see that they have much more money available than they previously thought.

Leave Your Nest Egg Alone

Any money that is already in your retirement fund should remain there untouched until you actually retire.  Why should a person resist dipping into retirement savings?  For the simple reason that it is very difficult to replace the money borrowed from a retirement savings account and even if the money is replaced, you will lose the money that you had to pay in taxes for taking the money out of the account and the interest that you would have earned if the money had been left alone.  Resisting the urge to borrow from your retirement savings and searching for alternative methods to come up with additional money is much easier that trying to replace the money that you have taken out of your retirement account.

In recent years, more and more people have begun to use their credit cards for everyday purchases instead of using their credit cards for special purposes.  Commercials have been running for years trying to encourage people to use their credit cards for everyday purchases and many credit card companies have begun to offer rewards for using the credit card at the grocery store or the gas station.  Credit card companies are willing to spend the money on advertising this because the more people use their credit cards, the more opportunities that the credit card company has to earn interest and apply finance charges to the purchases that have been made.

Always Pay Off Your Credit Card Balance

There are a number of ways that a consumer can use to reduce the amount of money that they are paying to the credit card companies each month and the most effective way is to pay off the balance of the credit card each month.  Under the law, the credit card companies must give the person a grace period of at least 25 days to pay off the purchases that have been placed on the credit card before the balance of the card is subjected to interest and finance charges.  If the balance that has been placed on the credit card is paid off within that time limit, then the company cannot charge the person for placing the purchases on the credit card and the person gets a 25 to 30 day loan for free.

Use The Credit Card Sparingly

Although the temptation to place a majority of your purchases on your credit card and forget about them can be very high, going this route will cost the person a great amount of money in the long run.  In addition to the interest charges and finance charges, there is a good chance that the person will spend more with the credit card than they can afford to pay, will go over their credit limit triggering an over limit charge, or will carry a balance on the card which allows the company to charge higher fees for using the credit card.  The best way to use a credit card is to only use the credit card for emergency purchases and to pay cash for everything else.

Pay The Bill As Soon As It Arrives

A significant percentage of the profits that credit card companies bring in each month are due to the number of accounts that they have charged a late payment charge to.  These late payment charges can range anywhere from $25 to $39 per occurrence and are charged directly to the account, which will add to the balance amount that the person will be paying interest on.  In some cases, the late payment charge causes the person to go over their credit limit which can trigger another charge of up to $39 which will also be added to the balance of the credit card.  By paying the credit card bill as soon as it arrives, you will ensure that you will not forget about making the payment and the payment will not be mailed so late that the deadline is missed due to the pickup and delivery of the mail.

Debt collectors calling to say you must pay a debt that you owe is a call that many people have experienced in the last few years.  Most of the people that work for debt collection agencies are very respectful of the people they are attempting to collect from, but some companies are abusing the trust of people that they are contacting by trying to collect on past debts that the individual is not legally obligated to pay because the debt has expired.

Understanding Expired Debt

A debt that has expired is a debt that has existed for more than seven years and has not any type of activity on the account throughout that time.  Legally, a person is not obligated to pay these debts due to a legal statute of limitations placed on collections of debts across the nation. These laws were put in to place in order to prevent the collection agencies from attempting to collect on debts that are virtually impossible to validate.

Even though this type of debt collection is illegal, there are some unethical debt collection agencies that still try to collect on these debts anyway. Why do they do it? Simply put, they are relying on a person’s lack of knowledge of the laws surrounding debt collection to collect money that they are not legally entitled to. These companies have nothing to lose due to the fact that all they have invested in the account that they are attempting to collect on is time, nothing else. 

The debt collection companies do not have any affiliation with the original account holder as they have typically purchased the debt from the original company for pennies on the dollar or have been assigned the account from another company. This means if they can collect any portion of the original debt it becomes nearly 100% profit for the debt collection agency.  For this reason, many of these companies use highly aggressive collection tactics that a legitimate collection agency would not use for fear of being held accountable for the tactics in court. These unscrupulous companies want to achieve a level of fear that would get the individual to pay the debt more quickly without asking too many questions about the transactions.

Can I Do Anything About It?

Yes.  If you know a company is trying to collect on a debt that is more than 7 years old and there has been no activity on the account, you can simply inform the debt collection agency that is attempting to collect the debt that you are fully aware of the laws surrounding the debt, and any further attempts to collect that debt will cause you to report them under the Fair Debt Collection Practices Act.  Sometimes alerting these companies just is not enough, as there have been cases where they have actually changed dates to reflect current activity on the debt, so they can extend the period of time to make the debt valid. If you find this to be the case, report them under the Fair Debt Collection Practice Act without hesitation. If you need to you can even take the collection agency to small claims court and have them pay you damages for harassing you about an expired debt.

Every person that attempts their own financial management will experience some level of risk when trying plan their financial future.  Financial stability can become uncertain from year to year and the many things that play into these fluctuations can make it difficult to predict how stable the financial future will be.  In many cases, situations that are beyond the person’s control can create chaos to the person’s financial planning, such as death, illness, or the loss of a job. Sometimes, predictable events can greatly affect one’s personal financial situation because the person failed to take into account just how much the event will end up costing them.  Reviewing the events that could have an affect on your financial situation and adapting your finances prior to these events occurring can help you effectively manage any risks you may be taking with your financial future.

Allowing for a small amount of risk when planning for your financial future is not always a bad thing.  Assuming some risk with your finances can actually help them quickly grow, such as investing in stocks in the stock market. The trick is to know when to hold on to assets and when to get rid of them to reduce the impact on your account balances. The most difficult thing is learning how to manage the risk that you take.  A few mistakes may be made in the quest for a person to gain the experience needed to manage risk effectively, but knowing some of the pitfalls ahead of time can prevent you from making a major mistake.

Limiting The Risk

Most of the time, when financial mistakes are made, a person will find themselves facing a large deficit.  The wrong thing to do at this point is invite more risk to recoup any losses the person has realized.  This may result in the person facing even greater losses than they were exposed to before they doubled down on the amount of financial risk they were taking.  The most appropriate action would be to accept the loss as a learning experience, then find ways to reduce your exposure until your financial stability returns to its previous level.

Any major financial decision should be well researched before any decision is made in order to successfully manage your financial risk. Before buying a stock or making a major purchase, research the company itself rather than listening to what is telling you about those particular stocks. Stocks can rise very quickly and can fall just as fast, taking your finances down with it if you have invested heavily in a particular company. Take the time to look at the positives and negatives of each financial decision to greatly reduce your exposure to risk in your financial future and increase your ability capitalize on good opportunities.

Being able to secure a loan to purchase a vehicle can have many benefits for the people that need a vehicle for transportation.  Having a personal vehicle in the home makes it easier for the person to get to and from work, retrieve ill children from school and get them medical attention, and shop for food or clothing.  There can be many difficulties associated with obtaining a loan for a vehicle for many people, but knowing what these obstacles are beforehand can help the person prepare and increase their chances of getting the vehicle loan.

Determine A Price Range
One of the first things that a person will need to do is to determine how much they can afford to pay for the vehicle and find a payment range for the vehicle that they would be comfortable paying each month.  It is important to remember that the cost of owning a vehicle will include making repairs to the car when needed, paying for car insurance, and putting gas into the vehicle.  If the person believes that they will not be able to pay for all of these additional items as well as making the payments on the vehicle, then they should hold off on purchasing the vehicle until they feel that they are more financially stable and will be able to afford the costs.

Review Your Credit Report
The next step in securing a vehicle loan is to review the credit report to make sure that there is not anything present on the report that would disqualify the person from receiving the loan.  If there are mistakes present in the person’s credit report, they may be enough for the person to be rejected for the vehicle loan, even though the information is inaccurate.  It is best for the person to clear up any of these mistakes with the creditors and with the credit reporting agency before applying for a vehicle loan so that they will have a better chance of being approved for a vehicle loan that is affordable with a lower interest rate.

Applying For The Loan
Obtaining a vehicle loan requires the person to provide detailed information about their finances to any lender that will be providing them a vehicle loan.  The lenders will gauge the ability of the person to repay the loan granted and will create a loan agreement with terms that can be beneficial to both the lender and the borrower.  To ensure that the borrower is getting the best rate for their vehicle loan, they may want to consider shopping around for lenders that will provide them with the best lending options.

With the popularity of the internet skyrocketing, many people have found it very easy to get information on obtaining vehicle loans from internet websites dedicated to the topic. The person will be able to compare multiple loan options from many different lenders in the comfort of their home or office, often being able to review interest rates, terms, and insurance products that protect their investment in their vehicle.   In some cases, the person will be able to obtain a quote directly from the lender that is specific to their financial needs and ability to repay the loan.  Searching online for the lender can help the person find the loan that they need to get the vehicle that they desire.

The choices that people make everyday can eliminate the possibility of becoming free of debt any time in the near future and in many cases, they do not realize the damage that they are doing to their financial future.  Each of these bad financial habits can cost a tremendous amount of money in higher interest rates on loans, late fees, additional charges, and increased debt to creditors.  All of these habits can be very difficult to break, but the quicker you learn how to avoid these common mistakes, the faster you will reduce the money wasted each month on bad financial habits.

Not Checking Your Credit Report Regularly
Many people have never checked their credit report for any inaccuracies.  Regardless of whether you believe that there is inaccurate information on the credit report or not, checking the credit report should be done each year to ensure that none of the information within your credit report has changed.  The current law requires credit reporting agencies to investigate any disputed entries in your credit report and correct any mistakes that are found. The removal of inaccurate items from your credit report can raise your credit score by a significant amount and allow you to obtain lower interest rates on loans.

Neglecting To Create A Monthly Budget
For some unknown reason, a large number of people view budgets as bad thing or something that only lowly paid individuals should adhere to. Creating a budget is essential for routine purchases and paying the bills to make sure that you are not spending more money than you can afford. When people take the time to take control their finances by creating a budget, they ultimately get the opportunity to see exactly where their money is going to each month. With a detailed budget, you can see if money is being spent on unnecessary purchases and can trim your costs to help you save money in the future.

Brushing Off The Seriousness Of Your Financial Situation
One of the biggest financial mistakes a person can make is electing not to talk to their creditors once financial hardship takes place. You may be embarrassed or even upset about your situation, but hiding and ducking creditors will only make the situation worse. In most cases if you have a valid reason for the financial hardship, such as illness, death of a spouse, loss of job, or divorce, your creditor may be willing to work out a payment plan to keep you from falling deeper into debt.

Obtaining Store Credit Cards Just For The Initial Discount
Signing up for store credit cards that are promoting special savings for using them is only effective when the balance of the card is paid off in full at the end of each month. Most of the store credit cards available have much higher interest rates attached to them compared to the rates for major credit cards.  If you need to make a purchase on credit, the cost of that purchase should always go on the major credit card you hold if you cannot afford to pay off the purchase within the month.

Neglecting To Save Money For Emergencies
Many people hold off saving money for unanticipated expenses so that they can have the immediate gratification of acquiring an item that will satisfy their desire. Unanticipated expenses are one of the leading contributors to falling into debt and can cause the accrual of late payment penalties from creditors, higher interest payments on credit accounts, and less credit available for any other unexpected expenses that just might arise.