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Having no credit history might seem a comfortable idea at first, but having a good credit history is one of the basic necessities, if you want to be financially secure. Credit card is one of the easiest ways of building a strong credit. However, it is difficult to obtain a credit card without a credit history making the whole situation a deadlock. There are other ways to get around the no credit history drawback, but any day, there is no match for a record like good credit history.
There are many established and successful ways to start building a new credit history. Most successful and fastest way to good credit history is a departmental store card. Departmental store cards are very similar to credit cards, in a way that they both operate on credit. They are issued by all leading departmental stores to attract new customers and to keep the existing customers satisfied. These cards are much easier to own, all you have to do is choose your favorite departmental store and apply for their cards. Almost everybody is eligible for it and is approved for the card once they apply for it.
Before you own a departmental store card, make sure of the following things:
Credit reporting:
Make sure your departmental store reports all financial transactions to a credit reporting bureau. If they do not, then the whole idea of choosing a departmental card for credit history does not make any sense. If they do report, then, as you purchase a product on your store card and make timely payments, your records will be reported from time to time. This can positively add onto your credit score and make your report stronger.
Exercise caution:
While it is a great way to start with the credit history you have to be sure of making timely payments. Because these cards are means of sales promotions, the interest rates they charge for unpaid outstanding balance is quite high. Only if you think you can handle credit card system of working, then think of departmental store cards.
Overspending:
Consider the amount you are going to spend every month on the departmental store card. Since these cards offer attractive discount rates and monthly promotional offers, it is easy to overspend and cross the available credit limit on your card. At any given time, exceeding 50 percent of your available credit limit is a bad idea since it will reflect as a negative point on your credit history. Also, avoid making any new purchase on your card if you have not paid the full balance due for the previous month. This can add on to your debt and cause your credit history to go bad. Using the card, only to build a good credit history is mandatory.
Along with all the above measures, another important step after you have started the store card payment cycle is to read your credit report, once in a while. To know that you are safe and have a sound credit history is a very secure feeling. If anything is not good on your credit report, there are always measures to correct them before it is too late.
