Everyone knows how difficult it can be to establish credit. It's
the old "chicken and egg" situation - you need credit in order
to get credit. The fact that you have nothing in your history to
suggest that you will not repay a loan will not help you get
one. You need to have something in your credit history that
suggests that you will repay the loan. And how do you do that if
you have no credit?
One solution that's often suggested
is a secured credit card. A secured card requires you to put up
a cash deposit that acts as collateral against your credit
limit. Your issuing bank knows you will pay your bills because
they have your cash. If you don't pay, they will just take it
out of your deposit.
A secured credit card is a good way
to start building a credit history if you have none, but is
there anything else you can do? How about joining a health club?
That may seem like a strange notion, but it may not be
that far fetched. Most health clubs, especially the national
chains, will have you sign a contract to join. That contract
will require you to make monthly payments for a minimum amount
of time, say two or three years. Most of them will also report
your business to the credit bureaus. If you pay on time, you
will get some positive additions to your credit report. Be sure
to ask before signing up if they report your payments to the
credit bureaus. If not, keep looking until you find a gym that
does.
It's pretty well known that the big health clubs
make most of their money selling memberships, rather than
selling health. If all you want to do is pay them the money,
that's fine. That's what most people do. They attend for a while
and then fall out of the habit after a while.
On the
other hand, an added bonus of using a gym to establish credit is
that you will have an opportunity to stay healthy by engaging in
regular exercise and few methods of establishing credit will do
that.
About the author:
©Copyright 2006 by Retro Marketing. Charles Essmeier is the
owner of Retro Marketing, a firm devoted to informational
Websites, including End-Your-Debt.com, a site devoted to
establishing credit,
debt consolidation and credit counseling.
