When used correctly, credit can be a great tool in financial planning when it comes to reaching financial goals. When used incorrectly, poor credit can be devastating to your finances and your financial well-being. Credit is a contractual agreement whereby a borrower receives something of value in agreement to pay the lender at a future date. Once credit has been accepted it becomes debt. People acquire credit by making promises to pay in the future for something they receive in the present.
- Have a utility bill put in your name. This can include a phone bill, an electric bill, or even your cable bill.
- Apply for a gasoline card. They are fairly easy to get and it is fairly easy to plan for how much you will need to pay each month.
- Open a savings and checking account so that you can demonstrate a history of deposits, withdrawals, and transfers.