“How do I establish credit, when I don’t have a credit history”? This is probably the most commonly asked question by most consumers looking to open a credit account. Not having credit can be just as difficult as having bad credit unless you know how to go about proving yourself to a potential creditor.

The crazy catch twenty-two:
How can you get credit if nobody is willing to extend you credit because you don’t have any credit history?
A good place to start is by obtaining a letter of credit from a company that you have been dealing with already that does not report to the credit reporting agencies.

An example would be your electric company. It is possible to contact your electric company and request a letter of credit. They are likely to require that you have had an account with them for at least a year as with most companies that you are asking for a letter of credit. Your cable company may be another option for a letter of recommendation for credit. If you have had an open account for at least a year and have made on time monthly full payments, without payment arrangements, these two companies are good candidates to provide you with a letter of recommendation for credit.

To establish credit either with or without a letter of recommendation for credit, you could also start with your banking institution. All banks offer credit card and loan accounts. If you have banked with the institution for at least a year (sometimes 6 months) they may strongly consider extending you a line of credit. In the beginning of any credit account, your interest rate may be high, but don’t despair, after your first positive review in about 6 months, the interest rate may fall dramatically as well as your payments if you have been making minimum payments.

Just to get you started. Your new account may be very low. After about 6 months of on time payments, your lender may review your account for a larger credit line. The smartest technique is to start with baby steps. Start with just a small account, pay the accounts regularly, get used to the monthly obligation, and make on time monthly payments before jumping into any other credit account(s). You are very likely going to find creditors coming out of the wood work and hunting you down to offer you a line of credit, consider their offers with caution. Actually, the best recommendation is to give your self at least 6 months to a year before taking on a new account. Jumping in too fast can easily wipe out all of the hard work you have done so far to establish some credit.

Once you jump on the credit bandwagon, it is vital that you keep track of your own credit rating. You will find many great offers online for programs that can inform you, on a regular basis, of your credit standings. You could also request your free annual credit report and verify your status regularly.

Once your credit becomes active, keeping track of your credit report is crucial for many reasons:

1. It could prevent the use of a fraudulent credit account by an unknown user.
2. It could prevent the unfortunate event of somebody stealing your identity and using your credit.
3. It could help find a lost payment and assist you with keeping track of how your creditor is reporting your payment activity.
4. It is just good credit etiquette to know your own credit rating.
5. Knowing your own credit rating and status gives you bartering power when dealing with a new potential creditor.

Once you’ve established some credit, take caution with accepting credit offers from other creditors, look into the interest rate the lenders are offering, consider the monthly obligation in addition to your other financial responsibilities such as rent, utility bills, car insurance, groceries, laundry expenses, gas, day care, etc., and feel free to decline credit offers.

In the beginning of your adventure with new credit accounts, it can be very exciting to have several creditors offering advances, it can be an uplifting and powerful event, however, pursue with caution in order to maintain a healthy credit rating and score. Keep your credit history in mind and respect the great task that you have accomplished by establishing credit with caution.

Credit card debt consolidation is regarded as the first step towards getting rid of credit card debt. Credit card debt consolidation loan is one of the ways of consolidating credit card debt. Besides, credit card debt consolidation loan, you can also go for balance transfer to another credit card. In fact, due to the publicity by credit card suppliers, balance transfers seem to be more talked about than credit card debt consolidation loan. Some people kind of forget about credit card debt consolidation loan being available as a method of credit card debt consolidation. However, credit card debt consolidation loan too is important to consider when going for credit card debt consolidation.

So what do we mean by credit card debt consolidation loan?

Put simply, credit card debt consolidation loan is a low interest loan that you apply for with a bank or financial institution in order to clear off your high interest credit card debt. So credit card debt consolidation loan too is based on same principle as balance transfers i.e. moving from one or more high interest debts to a low interest one. The credit card debt consolidation loan has to be paid back in monthly instalments and as per the terms and conditions agreed between you and the dispenser of credit card debt consolidation loan.

Credit card debt consolidation loan, in general terms, is an unsecured loan i.e. doesn’t require you to pledge any security. However, if you have a really bad credit history and you want go for credit card debt settlement using credit card debt consolidation loan, the credit card debt consolidation loan will take the form of a secured credit card debt consolidation loan. This type of credit card debt consolidation loan requires you to pledge a security e.g. the home owned by you or something else that has a value which is comparable to your credit card debt consolidation loan amount. So, worse the credit rating, the more difficult it is to get a credit card debt consolidation loan.

Though balance transfers and credit card debt consolidation loans have the same objective behind them, the credit card debt consolidation loans are sometimes considered better because you end up closing most of your credit card accounts which have been the main culprit in landing you in this difficult situation. However, balance transfers have their own advantages which are not available with credit card debt consolidation loans. Choosing between credit card debt consolidation loan and balance transfer is really a matter of personal choice.

If you have problems with debts that are spiraling out of control then you will probably benefit from some debt consolidation help from a credit counselor. Many credit counseling organizations are nonprofit and can offer you debt consolidation help and work with you to solve your financial problems. Not all debt consolidation help is free and some credit counselors may charge high fees so it is important to research all of the available debt consolidation help that is available before you decide on a particular credit counseling service.

The best debt consolidation help is usually conducted face-to-face rather than over the phone or the internet. It is much easier to discuss all of your options if you meet with a credit counselor and they can see the type of debt consolidation help that best suits your needs rather than trying to read between the lines of an online form that you filled in. You will find financial counselors who can offer debt consolidation help at local offices near you but your financial institution, local consumer protection agency and friends and family can be good sources of information and referrals. You will probably find that there are a lot of people that have sought debt consolidation help and will be happy to tell you about their experiences.

The best debt consolidation help organizations will advise you on how to manage your money and debts more effectively, help you develop a budget and offer free educational materials and workshops. You need to be sure that any credit counselors who offer debt consolidation help are certified and trained in consumer credit, money and debt management, and budgeting. You want to be able to find debt consolidation help that will be able to cover your entire financial situation and help you develop a personalized plan to solve your money problems rather than working to a standard model that may not include your particular circumstances. This is another reason why you want to seek debt consolidation help from an organization that offers personal appointments. You may only need an initial counseling session which typically lasts an hour, but you want to be able to have the choice of follow up sessions if you need further debt consolidation help if sticking to the plan id proving difficult.

When you first look into the amount of organizations offering debt consolidation you need to get as much free information as you can about a particular company and the services it provides without having to provide any details about your situation. Any company that promotes the fact that they give debt consolidation help but does not want to provide you with any background information to help with your research should be avoided. There are plenty of debt consolidation help agencies available who are happy to disclose information about themselves to ensure that you make an informed choice.

What is a Credit Card?

Put simply, a credit card is just a small piece of plastic that easily fits in your wallet. Well, it’s not ‘just a piece of plastic’; it’s a very powerful piece of plastic which can be regarded as a compressed form of cash. We can define credit cards as a credit system that allows the consumer to borrow money on the fly from a bank or a financial institution and use it to make payments to the merchants.

In order to obtain a credit card, the consumer needs to fill-in an application form that is actually like an agreement between the credit card supplier and the credit card consumer. The credit card supplier approves the application form and provides the consumer with a small piece of plastic (i.e. the credit card). This plastic (or credit card) contains electronically encoded security information in the form of a magnetic strip (which is generally located at the back of the credit card). This information is used for authorising payments whenever the consumer uses the credit card. The consumer can use the credit card for shopping at merchant outlets or on the internet etc. Of course, this is subject to merchant’s capability to accept credit card payments. Accepting the credit cards is, however, not enough. The merchant should be able to accept payments made through the credit card provided by that credit card organization (of which you hold the credit card) i.e. VISA, MasterCard etc. You can also use credit card to withdraw cash from ATMs (automatic cash machines) – also known as cash machines or Day/Night machines.

There are eight main credit card organisations and most of them operate in a lot of countries world wide. These are American Express, Citi, Diners Club, Discover, JCB, MasterCard and VISA. Master card and VISA are probably the most popular ones. Then there are credit card suppliers or issuers who have tie-ups with these organisations and issue credit cards on their behalf e.g. you have various banks that issue VISA cards (like HSBC VISA card)

To make a payment using a credit card, the credit card has to be either swiped into special credit card processing machine (when shopping in person at shops) or the details of the credit card have to be entered on the merchant’s website (when shopping online). The credit card supplier sends across the bill for these transactions to the consumer who is then required to pay either the full amount or a partial (minimum) amount. If you pay in full, the credit card supplier doesn’t charge any interest on the amount you owe, otherwise the pre-agreed interest rate is charged. If you don’t pay even the minimum, you might land up with a late fee too. Moreover, the credit card supplier generally puts a limit on the maximum amount you can spend per month using your credit card.

Identity theft victims are those people that loose simply because someone has stolen their identity and run up their bills. If you are victim of Identity Theft you are well-aware how difficult it can be to get back on your feet again. Identity Theft victims often have to go through a series of steps to repair their credit and identity. Once the victim has made contact with the 3 credit bureaus they often put a Freud Alert on your credit report, which is supposed to be a protection to you, but the truth is it is a ‘mistake’ since it labels the victim. If you go to apply for a loan or credit card it is likely you will receive a rejection in the mail. So, is there a solution for Identity Theft victims and how can they repair the credit? First, it is important to avoid Identity Theft by protecting your Social Security Card, Driver License and other important information about yourself. However, if you are already in the credit bureaus labeled under the Freud Alert, then you may find yourself giving up. Identities are stolen in several ways. The Internet is swarming with predators waiting to mess up someone else’s life. People may stand over your shoulder peeking down at you while you are keying in your PIN number at the bank. You might have been in a relationship and the person decides he/she owns you and when you break up that person takes your identity. There are several ways that your Identity can be stolen. The solution is then protecting your identity with shields that no one can break through. If you are a victim of Identity Theft then your identity needs to be protected more so than ever. This sounds crazy since someone already has your ID. You will need to stay alert to the activities that affect your credit report. It is important that you keep updated copies of your reports at all time. If you notice activity, immediately dispute the claims against you. Be sure to file a police report since you will need these reports to show the 3 bureaus and others that your identity has been stolen. Once you receive the reports be sure to send copies to each credit bureau so that the companies can get you on record. The companies are going to put up a Freud Alert once the copies are evaluated. Here is where you need to stay alert. Instead of Freud Alerts, the companies can put up a FREEZE on your accounts. A Freeze gives you the options that Freud Alerts will not. For example, if you go to a bank and apply for a loan with a Freud Alert on your accounts, most likely you will be turned down. However, if the banks see that you have a FREEZE on your accounts, they will investigate and possibly give you the loan. Freeze means that someone has affected your life by stealing your identity, while Freud means that someone has committed a criminal act on your account, and that someone could very well be you. You will also need to report any checks that you suspect were stolen. Monitor your banking account at all times to make sure that no out of place activities are going on. It is important that you alert your utility providers and anyone that you have open accounts with. If you have credit cards report them immediately to get replacements. You may even want to cancel your current bank account and open a new account. This will offer a source of protection. It is also important that you contact your Social Security Office to find out if your Social Security has been used out of place. If actions have been listed on your card, be sure to let the Social Security Administrators know. Making others aware of what is going on in your life, can spare you additional headaches. You are already a victim of criminal behaviors, why not take the steps to repair your credit and restore your life. Finally, you will need to contact Washington D.C. or the Identity Theft Clearinghouse, Federal Trade Commissions and let them know you are a victim of Identity Theft.