How do I Establish Credit in Middle Age?

Establishing credit can be a very important step to self-sufficiency. Establishing a positive credit history opens the door to qualifying for many types of financial assistance by lending institutions. The type of lending you may qualify for with an established credit history ranges from home mortgages, personal lines of credits, and personal credit cards. Without establishing a credit history, a lender will be unlikely to give you access to the breadth of their financial services. There are several good habits and methods you can employ to establish credit, even when middle-aged.

Instructions

1

Open a checking and saving account in your name. This will help you establish a relationship with a banking instiution. With some lines of credit, the lending institution will want to establish that you have money and spending habits through your bank account.

2

Open "Store" accounts. These are lines of credit given out by retail stores, that are typically only good to use at the specific store they were opened with. Make sure to pay any balance on these cards off at the end of every month, as the interest associated with these cards tends to be rather high. Also ensure that the store reports the opening of the credit line to one of the major credit bureaus. Once your credit is established and you can qualify for an unsecured line of credit, cancel any store accounts you may have.

3

Open a "Secure" credit card with a banking instiution. A secure credit card is a line of credit that you have "secured" with a downpayment equal to the limit of the line of credit (i.e. You pay down $500 on the secured line of credit to open it, the limit of the account is $500). Pay off the balance on the card every month to help establish a positive payment history.

4

Find a co-signer to open a line of credit with you. By using a co-signer, you are effectively using their credit history as your own. This will help you open credit accounts you would otherwise not qualify for. There are risks to both signers when this is done, as both are responsible for the repayment of the loan. If you default on the loan, your co-signer will be affected negatively.

5

Pay your bills on time, every time. One of the most important things to lending institutions is how responsibly you have behaved in the past with your financial obligations. By establishing a positive payment history, you are establishing a positive credit history.