How Do I Get Credit?

Identity theft has become a problem with the introduction of shopping online. Thieves set up
clone web sites much like the ones that are used popularly to make purchases so that they can fool unsuspecting victims into entering their personal information. You can also have your information stolen by not correctly disposing of bank statements and other mail that contains personal information, such as your social security number. It is important to always shred any trash that contains such information, because having your identity stolen can adversely affect your good credit.
Any woman knows that it is a nightmare to have her purse stolen. You lose any money and belongings, and then have to get all of your personal information cards either canceled or replaced. Your debit account could go into a negative balance merely by someone forging your signature. If you don’t have a credit card, the person who holds your personal information can easily open one and charge thousands of dollars worth of merchandise in a matter of hours. If you do not cancel your credit cards and freeze your bank account immediately you could drop from having excellent credit to bad credit sooner than you might think. Other necessary actions would be to file a report with the police and place an initial fraud report on your credit report.
On the Internet and telephone, you take a chance anytime you give out personal information. Prior to entering any personal information, such as your credit card number for making a purchase, be sure to check the web address to be sure that you are on the companies’ official web site rather than a clone with the same appearance but different address. This one thing is often overlooked and thieves have exploited it successfully many times. If you notice this, report the fake site to the official site so that you can help prevent some unsuspecting person from making a simple mistake that could completely ruin their credit.
The best thing to do if you feel that you may have been a victim of identity fraud is to get an up to date credit report and look for activity that you are certain is not your own. In the event that you do find a new account opened or activity that is not your own, contact any companies involved to try to obtain a signature that was not made by you. The sooner you file your identity theft report, the easier it will be when trying to keep your credit report from being harmed. Keep track of every action that you take, and make sure to ask lots of questions about your credit score to be sure that everything is correct.

Credit cards have a bad reputation-many consumers dislike using them because they don’t like the concept of borrowing money, or have fallen into debt in the past. However, the responsible use of credit cards can help you build healthy credit by establishing and maintaining an active credit history on your credit report. Jenny Morgan, credit expert at ACCION, offers the following guidelines for using managed credit card “debt” as a tool for financial success.

1. Think short-term with credit cards. “As a rule of thumb, don’t purchase items that you can’t pay off in a year or less,” says Morgan.

2. Pay more than the minimum. Although credit card companies may only require you to pay 2-3% of your monthly balance, try to pay more. You can save thousands of dollars on interest if you pay your debt off as quickly as you can.

3. Watch your limits! A third of your total credit score is determined by the ratio of credit used to the credit you have available. Ideally, use around 30% and no more than 50% of your credit limit. According to Morgan, ‘Maxing out’ your credit cards will only harm your credit score.

4. Always pay on time! Late payments result in costly fees-not to mention a decrease in your credit score!

5. Find a card to meet your needs. Comparison shop to find the credit card that best meets your needs. Each card offers different annual fees, interest rates, and balance transfer rates. Morgan recommends using a credit card search engine like Bankrate.com to compare the benefits of different cards.

6. Read the fine print! If a credit card seems too good to be true, it probably is! Read the terms and condition carefully-that 0% APR introductory rate is just that- introductory- so make sure you know when the higher rate kicks in.

7. Don’t have more cards than you can handle. If your wallet is overflowing with credit cards, future creditors will think that you’re relying too heavily on credit, making you a higher credit risk. Limit yourself to five active credit cards.