It’s difficult to get a credit card or a loan without credit. Having “credit” means someone has determined that you are a good risk. You have proven yourself to be someone who repays their debts and someone who makes payments on time.
Most people start with a small loan, like a computer or a larger loan for a car. At the Credit Union, we’ll work with you to establish your credit.
A good way to start is to have a small loan that is secured by your share savings. While it may seem dumb to borrow with savings in your account, those saved dollars are collateral for the loan. With collateral, it is always easier to grant a loan to someone without any history of repayment or creditworthiness.
Did you know that credit is based on the three C’s – Character, Capital and Capacity? You have to show that you are responsible. We look to see if you already have acquired things such as a share savings account, a car or other financial resources. Finally, you must have earning power (a job) from which you will be able to repay the loan.
A warning – treat your credit record with care.
If you do not repay a loan or are late with any payment, it will follow you. Careless treatment of a loan will make it even more difficult for you to get loans in the future and could make it more expensive (companies could charge you a higher rate vased on your credit history) because everything is reported to the local credit bureau. The credit bureau then makes your credit report available to all companies or other financial institutions who want information on your credit history.
