Is There Anyone Who Can Help You Establish Credit ?

As you begin what can be the frustrating process of trying to establish credit you may wonder if there is anyone who can help you in this process. Establishing credit can seem to be overwhelming since few lenders are willing to extend credit to you if you have no credit history but you cannot develop a credit history without having credit. As you go round and round you may wonder if trying to establish credit is even worth it. But in today’s financial world not having established credit can be a deterrent to making large purchases or even securing your financial future. Yet before you give up know that there is help. If you are looking to establish credit there are people and places that can help you. While there are no guarantees there are options to consider when you are asking-Is there anyone who can help you establish credit?

• Your parents-If you are a young person looking to establish credit you may be able to have your parents help you. Lenders often look favorable upon young lenders who have parents who will vouch for their credit worthiness. It is crucial to understand though the role of a co-signer is only a guarantee of payment it is not a license for you to run wild with your new credit line in the hope that Mom and Dad will pay the resulting charges. This is a very good option for young people in high school or college to be able to establish credit and show that they can manage money responsibly. Consider asking your parents to co-sign an application for a credit card at a local department store to begin establishing credit. As you show that you can manage money down the road your parents may even be willing to co-sign a bigger credit line such as needed for buying a car.
• Other co-signers-If you are looking to establish credit you may need a friend to co-sign for you. This is generally someone who has a well-established credit history. If parents are not available to help you establish credit other people can be called on to co-sign. Again it is important to realize that a co-signer’s signature only serves as a guarantee of payment not as a signal for you to run wild with your line of credit.
• Your bank-If you are an established customer at a local bank they may be just the organization who can help you establish credit. The first thing to do is to make sure that you have a well-maintained checking or savings account at their institution. Banks and other financial institutions always want to expand their customer’s base and help their loyal customers. If you have established accounts at a local bank approach them about opening a small line of credit either in the form of a loan or credit card. This may be the easiest way to begin to show a credit history.
• Yourself-Believe it or not you may be able to help yourself. If you are finding it difficult to establish credit you may want to consider opening a secured credit card. A secured credit card is a line of credit that is guaranteed by a deposit from you. While this requires you to put down an amount of money (usually a minimum of 200-300 dollars) this can be a starting point to establish credit. After depositing the amount to guarantee your card you can then begin making purchases to start establishing credit. You must understand though that your line of credit will be similar to your deposit and if you fail to make the payments the lender on your card will take your deposit and close your card. This can severely damage a new credit score. In addition you will probably have to pay a much higher rate in interest so you will need to make it a priority to pay the full balance on your card every month.