Apr 04 2008
Build Your Credit
A friend of mine, a new Filipino immigrant in the USA like me, called me up sometime ago and we got to talk about all sorts of things about life and all. She mentioned how she doesn’t have a credit card since she doesn’t want it and she’s used to paying in cash.
I understand how she felt about staying away or creating debts when she has money to pay for things right away but nevertheless, as a new immigrant, building her own credit, is one very important thing here in America.
Because I grew up in the Philippines, I too, am not much of a believer in credit cards because I want to pay everything in cold cash. I know for a fact that credit cards can be stolen and you know if that happens, it can be such a hassle. I also do not want the interests they charge, imagine about 20% if you are a newbie on credit cards. Like my friend, I too, want to live without having to worry about these things. But soon I found out that things are different in America. The less debts you have , the less creditworthy you are. I found out that my credit history and my credit score will play a big part in my life here in Uncle Sam’s land.
I needed to establish my own credit so what other choice do I have but to get started on getting my own plastic card, that’s one way to start off with my agenda of credit building. And very important too, is to get a job, of course. Nobody will give you credit, if you have no job to support your loan, or no means to pay your credit card bills.
Anyway, if you will ask me why building your own credit is important and where in the world would it be needed, you will be needing your good credit in the scenarios I will mention below:
- when you try to lease an apartment
- when you want to buy your own house or your own condo
- when your spouse’s credit isn’t enough and the creditors will need an additional guarantor
- when you want to get your very first, very own car
- when you get divorced or worst, you suddenly lost your spouse, you will need your own credit to be able to do things on your own.
- when you apply for an insurance coverage ( medical, dental, car insurance )
What I did to personally establish my own credit was to put all our bills in my name. I also got two credit cards ( which I admit has a higher interest rate since I am a newcomer in this “charging” business.) I also opened my own bank account. Be careful with overdrafts though. Overdrafts are also indicators as to how you are as a spender. Be sure to not have them because they are also points against your creditworthiness.
They say that credit card debts are one of the problems of Americans. Yes, but if you know how to handle yourself and put a leash on your spending, I don’t think it is a problem at all. With credit card debts, I do not worry much about that because I know myself when it comes to spending. I am very conscientious and very stingy 
.
One thing I do so I will not be tempted to spend beyond what I can afford is to take out my credit cards out of my wallet. I do not bring them with me unless I have paid the past bill in full. Paying your bill in full rather than just paying the minimum amount, is a good indicator that you are a good credit material. It means you can pay off your bill quickly and you are not a candidate for bad debts in the future. But should you really need to use your credit cards or get loans from financial institutions, you should just be wise and smart and not go beyond what your paycheck can afford.
If you just got here in the US of A, if you have not yet done anything to build your own credit, start establishing your credit now before it’s too late, I mean who knows what the future will bring, right? It won’t hurt to do it but it will hurt you a lot in the future should you need that credit for something.
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