How To Build Good Credit
DCU's vision is that all members achieve financial well-being. We believe that unbiased, detailed consumer education is essential for you to achieve your financial goals. Why are we different? Read it here.
(Part 2 of 2)
Secure a small loan for a planned purchase.
If you are working or have been saving toward a middle-sized purchase such as a computer system, you may wish to consider taking out a small loan to pay for it. Again shop your rates, the retailer may offer a loan plan but interest rates are typically very high. Explore what your credit union may offer. A loan cosigned by a parent, a loan secured by a savings account, and CashPak are all options offered by DCU, for which you may be eligible. To build good credit, make all loan payments on time; don't be even a day late.
What about an auto loan?
A number of dealerships offer special programs for first-time buyers. The objective of the dealers and manufacturers is to make young buyers life-time customers. Eligibility requirements (including age) vary. But if you're eligible for a dealer's "first time buyer" program, you're usually eligible for a loan from the credit union or bank. The important thing to remember is to shop for any auto and its financing using the approach recommended in our StreetWise Auto Buying Guide. Be sure to compare all financing rates and terms.
More good information on credit.
"Pick a Card-But Not Any Card" -
Explore the difference in credit cards, debit cards and prepaid cards in this article available through StreetWise's connection to Googolplex, the resource for teens from CUNA, Credit Union National Association.
"The Credit Puzzle – How to Use It, and Not Abuse It." Award-winning essays written by students and awarded by NEFE, the National Endowment for Financial Education which created the High School Financial Planning Program that's widely available throughout the country.
"Are You Seeking Credit or Charge Cards? Will You Be a Good Credit Risk?"
Taking this Credit Risk Profile from the Institute of Consumer Financial Education can help you check your financial savvy before you get a card or as you start to use it.
Make sense? Read more about issues like this in our other articles and be sure to give us your feedback.
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