| Let's face it, without credit, life would be unaffordable. How many of us can afford to pay cash for a car, house, appliances etc. Credit is a very import part of our culture. With good credit, companies are willing to lend money without charging interest for at times for up to twelve months. Good credit is powerful. It opens up opportunities for most people who would not otherwise afford the necessary things in life. Establishing credit can be a challenge. You just have to be patient. There are companies out there that offer secured credit cards. This is when you the customer deposits money into an account for which you are issued a credit card. You then can charge purchases on the credit card and make monthly payments. You have to be certain that the company providing the secured credit reports to the credit bureaus. The credit card bereaus are Experian, Equifax and TransUnion. After about a year, some companies are willing to switch to a regular credit card. Once credit has been established then you have to have a good FICO score. FICO is a formula developed by Fair Isaac Corp which was designed to measure the likelihood of a person defaulting. Factors included in calculating FICO scores are * punctuality of payments * amount of debt * length of credit history * types of credit * recent applications or enquiries to obtain new credit FICO scores range from 300 to 850, the higher the better. The credit world has become more and more complicated as technology changes. You can do everything in your power to have a good credit only for someone to steal your identity and your record is a big mess. Identity theft has become a massive monster and with the internet, information is on almost anybody's finger tips. There are companies out there that provide monitoring services for a fee. They monitor and send you alerts every time there is a change or enquiry on your credit report. Some of these companies also provide insurance in case you have any damaged from identity theft. This in my opinion is money well spent as I have heard personally of unsuspecting individuals have thousands of dollars charged to their credit cards or even new accounts opened without their knowledge and they a left with the burden of proving that they in fact do not make these charges. Yes, credit is the way of life. Credit cards make life easier, you do not have to carry around large amounts of cash and can have money readily available in emergencies and with some credit cards you can earn rewards as you spend. On the other hand, you have to be responsible, do not over spend, its easy to charge and charge but when it comes to paying it is a different story. The only way to look at it is credit cards come with responsibility. Over spending can lead to financial ruin because that means you are spending money before you even earned it. Also depending on the interest rate and charges on the credit card, you end up paying more for a product that paying cash. |
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