Building Your Credit in the USA

A friend of mine called me up some months ago and we got to talk about all sorts of things, about life and all then she mentioned about how she doesn’t have a credit card since she’s used to paying in cash. I understand how she felt about staying away from creating future  credit card debts but I advised her that she should get started now with a credit card company because that’s one way of building our credit here in the USA. Besides if you know how to properly manage your credit card , you wouldn’t be in the same rut with the millions of Americans who have credit card debts.

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, add to the fact that credit cards can be stolen and you know if that happens, it can be such a hassle, plus I do not want the interests they charge, imagine about 24% if you are a newbie on credit cards. I too, wanted to live without having to worry about these things but I soon found out that things are different here. I need to establish my own credit history so I had no choice but to get started on getting my own plastic card, among other things. I found out that my credit history and my credit score will play a big part on my life here.

For people who have not yet started establishing their own credit, you will need it in the scenarios I will mention below:

when you want to get your very own credit cards ( because it makes you pay later for things, luxuries you cannot afford to pay right now )

when you try to get your own apartment lease

when you want to get your own house, 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 car

when you get divorced or worst, you suddenly lost your spouse

when you apply for an insurance coverage ( medical, dental or 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. I do not worry much about having lots of unpaid loans on my credit cards because I know myself when it comes to spending. Just the other day, I took out my two credit cards from my wallet and decided not to bring it with me anywhere so I will not be tempted to use them.

So to my friends who just got here in the USA, 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 start being creditworthy now but it will definitely hurt you a lot in the future if you’re not.