How Does Your Bank Credit Rating Affect Your Credit Rating? - January 11, 2008 -

If you are a young person who is just getting started out on your own, you need to seriously think about working to establish a good credit rating. Why is a good credit rating so important? It can set the stage for how the rest of your life will unfold. The strength of your credit will determine whether or not you are able to buy a home or rent an apartment, pay a decent price for auto insurance, or get that good job you are up for. A great way to set the stage for stress-free credit is to let your bank help you get your credit score get off to a good start.
Keep a Check on Things

If you have never had a credit card before, it’s still a good idea to check your credit report. If your report is empty, then you should open a checking and/or savings account at a bank of your choice. How can this help you to get your credit started? When you have had either of these accounts and kept them in good standing for a period of time, a lender is going to look upon you much more favorably. Especially if you are a young adult, it shows responsibility when you have managed to keep an account solvent without it going into arrears.

Your bank can help your credit rating in other ways, too. Once you have had your checking or savings account for 6 months or longer, your bank may allow you to apply for a secured credit card. This is the type of credit card where you must deposit money in another account with your bank in the amount that you want the credit limit on your card to be. These cards are popular with young people just starting out, as well as people who are starting over with their credit history.

When you have had your secured credit card for anywhere from a year to 18 months, many banks will let you convert it over to a regular, unsecured credit card. Both the secured and the unsecured credit cards will help you to build your credit if your bank reports to any of the three main credit bureaus.

Once you have started your credit history with a bank account and a bank credit card, you can branch out a bit and get a single credit card from a gas company or a major department store. These are good choices for credit cards because they typically are easier to get than cards like American Express or Mastercard. You don’t want to get too many cards at this point. Your goal is to slowly build a solid credit history, and getting too many credit cards at an early age can be a recipe for disaster. Slow and steady wins the credit card race!

Use your cards regularly and keep the payments strictly up to date in order for your credit rating to build up to the point where you will have a top credit score. As an added bonus, your bank credit rating will rise as you prove your credit worthiness.

About the Author:Ann Richter
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