Do you need a credit card to establish good credit?

One Response to Do you need a credit card to establish good credit?

1. greenmachine

   January 31, 2010 at 5:44 pm

   With the changes to the credit laws effective Feb 22, you will be hard pressed to be able to get a credit card until you are 21. No rush, but unfortunately having a credit card that has been used responsibly is an integral part of establishing good credit. A couple years of good payment history from a revolving credit account (ie, credit card) is an excellent way to build credit.

   Here are the items that go into determining your credit score:

   Factors used to score you, in order of importance (information marked with a * is obtained from an application, not considered in a credit bureau score):

   1.Major derogatory items on your report (bankruptcy, collections, foreclosure, slowpays)
   2.Time at present job
   3.Occupation (Professionals are given heavy weight)*
   4.Time at present address
   5.Ratio of balances to available credit lines (the lower the better)
   6.Are you a homeowner? (if you are, this is heavily weighted)*
   7.Number of recent inquiries
   8.Age (50+ is the best)
   9.Number of credit lines on your report
   10.Years you have had a credit in the credit bureau database

   For a bunch of information regarding how credit scores are determined, here an an excellent article to consult:

   Good luck!