subject: 2 Credit Misapprehensions [print this page] When you want to begin building credit, don't simply get the first card which you find. This newsletter will explain what can count and what doesn't count for building your credit. There are numerous different factors which go into credit but establishing credit takes certain factors.
The first myth relating to credit is that power and water bills will help you build a good credit report. Household bills don't go on your credit report. These bills can help when you are looking to obtain a mortgage. If you've got little credit but can show a stable payment history, you are able to obtain a mortgage. Your household bills as well as rent payments can be used to show evidence of the stable payment history. Activities like these can help in building good financial habits for students if they should learn how to pay the bills on time and have money budgeted for them every month. What counts towards your credit are any credit accounts like study loans, vehicle loans, and mastercards.
The second credit myth is that no credit trumps bad credit. This isn't usually the case. Blemished credit does indicate that you have a payment history. This isn't the case with any credit and creditors will shy away from this more than someone with no credit. If you haven't got any credit in the slightest, you may just about likely not be well placed to get a studio if you wanted without a co-signer. Subprime credit can be corrected and some info can be gleaned about the person's monetary history from this while the person who has no credit has nothing with which a company extending credit can often work with.
The third myth about credit is that you need to help out mates with credit. To return to the prior paragraph, let's take a look at the definition of a co-signer. If you don't have enough credit, you want a co-signer. A co-signer guarantees a loan or a credit card so if the person who has no credit doesn't settle up, the company who extended the credit will go after the co-signer.
there are numerous stories which you can read online of people co-signing for buddies faithfully only to have their own credit demolished. If you have got good credit, you need to guard that meticulously. Be certain to help friends who you know pay their bills on time because what they do will be a reflection on your credit. You don't want to have to reconstruct your credit as a result of someone else's inactions or inabilities to pay his or her bills.
Hopefully this tract on a couple of credit misconceptions has helped you realize what can count towards building your credit together with why you need to establish credit. You should guard your credit smartly and if a buddy ever asks for help, understand why you must decide yes or no.
