Finding the Best Credit Card Applications to Build Good Credit

At almost every turn in life we are faced with Catch-22 scenarios. Trying to get that first job without any experience or trying to pay for college but you can't get a loan because your parents make to much money. Or what about later in life when you are faced with other Catch 22 situations like not being able to get car insurance because you had a few slips in the last year but you need your car to get to work? It seems that we take two steps forward just to be forced three steps back at every turn in our life.

But building good credit can be one of those Catch 22 scenarios you avoid if you are smart. Utilizing credit cards and credit card deals can help you build up your Triple-A credit rating if you are smart, responsible and careful about your credit decisions.

For example, at some point in your life you are going to need credit: to buy a car or to buy a house. If you reach that point in your life and you have no credit, this can be a very difficult task. But, if at the beginning you start building your credit in small, easy steps, you can avoid the inevitable...NO DEAL...from your car dealer.

You Credit Beginning

In the beginning of your credit life, you want to be able to show potential lenders that you are stable. A good start, other than getting and maintaining employment with the same employer for more than a year, is to get a credit card and make your payments.

In that regard, you should try and get a secured credit card and pay your bills on time every month. This will show the potential lender that you have set a precedent in your financial life as someone who pays their bills.

Next, request a copy of your credit report from all three credit agencies (TransUnion, Equifax and Experian). You can do this online. If you are just getting started in life, you may not have a lot of information on these reports. That's OK. That's what you are trying to do now...build up good credit. Knowing where you stand is the first step to building and maintaining your good credit. If these agencies already have a credit report on you need to review the information to verify its accuracy. Resolve any problems before you go any further.

Credit Alternatives

Now it's time to get the ball rolling and kicking you're your credit building process into high gear. Among your choices to quickly building and maintaining your good credit status:

• Apply for an unsecured credit card. You've already acquired a secured credit card. Now it's time to establish "credit on your word."
• Apply and use a pre-paid credit card whenever possible. Why not start out your good credit life without being trapped by high finance charges?
• If you are still having problems obtaining a credit card, try using a co-signor. This guarantees the bill will be paid even if you default.
• You can also apply for gasoline or retail store credit cards (they're easier to qualify for).

Whichever alternative you choose, or if you choose all of them, this process assures that you now have a credit record and that record will be updated each month. Now it's just a question of maintenance.

Maintenance of your Good Credit Standing

Now you have credit and it can be tempting to abuse that credit. Abusing that credit can improve your overall lifestyle allowing you the opportunity to travel, play and buy things you can't afford. But only in the short run. That type of credit card use and abuse will come back to bite you in the hindquarters much sooner than expected. It's easier to maintain your good credit rating in the beginning and play later. Just follow these simple steps and you will enjoy many more rewards.

1) Pay your bills on time - This seems the most obvious of the common sense rules about maintaining your good credit. But you would be surprised to learn that this rule above all others is the broken most frequently.

2) Limit the number of credit cards you carry - While just carrying one card may not lend itself well to the lifestyle you think you deserve, carrying too many can have the same effect. Too many credit cards send up a red flag to credit card companies and other creditors that you are abusing your credit privileges and over-obligating your financial resources. Two to four credit cards is more than enough.

3) Limit your number of requests for any type of credit - only take out credit when you really need it. Regularly seeking credit because it is available will eventually drive down your score and conveys a reckless attitude that both new and existing creditors do not like to see.

4) Never max out your credit limit - maxing out your credit cards indicates to creditors that you are reckless. To keep it manageable, keep your purchases to less than 30-percent of your available credit.

5) Whenever possible, pay more than the minimums. If you stick to the minimums you will never pay off your debt. The credit card companies like this method of only paying the minimum, but your good credit rating doesn't.

To put it simply, pay your bills on time and don't over extend your resources. If you follow these steps, you can build and maintain your good credit rating. Whew, that's one Catch 22 scenario avoided.

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