The Lazy Mentor's Reference Journal
"If you're not embarrassed by your offer, then you offered too much"


Building First Time Credit

Building Credit  (part 3)

The credit card offers that said "Apply Now" were tougher to get.  They were using lists of people who "might" be ready to get a credit card.  College students, people with checking accounts, property owners, etc.  But that was all the information they had on you.  There was a long application, and they would pull your credit report before issuing a card.

In contrast, the offers which said "You're Pre-Approved" were just that.  You simply wrote in your social security #, checked the address as correct, signed your name, and got a card.  They got my name from lists of people who already had credit cards and paid on time.  Knowing I was low-risk, they never even pulled my credit file before issuing a card.  In the days before identity theft, some of them even mailed you the actual card with the offer.  No activation, just start using it and you're in.


But I had to look carefully over all the applications before getting a card.  Some said pre-approved, although they really were not.  The more information they asked for, the less likely it was true.

The offers which pulled my credit would leave an inquiry on my report.  The more you have, the more doubtful other creditor become.  If you're truly pre-approved, they can still check your credit, but it will register as an existing creditor looking for updates on you, and it doesn't affect your rating.

Once you have a credit card, use it wisely.  After 6 months or more, they will begin increasing your credit limits.

When I began all this credit building, I kept a log book of all my accounts.  I wrote down the total owed, the minimum payment, and the total credit available.  I updated it weekly and also listed my income for the week, my checking and savings balances, etc.

Since I had little in assets, it was easy to track my exact net worth, and available credit on any given day.  It helped me plan ahead, know how much I could spend, and make sure I never missed a payment.

There are also secured credit cards available which are great for building credit.  There are several ads for them on this page.  You deposit money with them, and use it like a debit card.  But the important thing is that they report to the credit bureaus just like any other creditor.

Copyright 2006 The Lazy Mentor

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