4
rates. Comparison-shop for the best
rates.
e Hold on to your credit receipts;
carry them in your wallet, or keep a
running list of the month's charges in
your checkbook. Remind yourself
that some of the money in your ac-
count is already spoken for, and you'll
be less likely to spend it before the
charge bills come through.
e Limit your initial short-term debt
(retail accounts, installment loans-
everything but a mortgage) to no more
than 15 percent of your take-home
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pay. For most of us, credit debts
above that level spell T-R-O-U-B-L-E.
In the Beginning...
Building a Credit History
Start small.
Building a credit history takes time
and patience-but, contrary to some
popular money myths, it's relatively
easy to get first-time credit.
Some ways to jump-start your cred-
it-ability:
e Open savings and checking ac-
counts. They allow you to show you
can handle money responsibly and
they will score points on credit appli-
cations.
e Open one or two charge accounts
at local department stores and pay
your bills on time. You can use the
stores as credit references after about
three months.
e Use your car or the money in your
savings account as collateral for a
small loan. You are developing a good
credit history by paying the loan off
according to the terms of the contract.
e If you don't have assets to use as
collateral, ask a parent or adult friend
(somebody with a good credit rating)
to cosign your loan application.
e Apply for a gasoline credit card.
Like retail cards, they're relatively
easy to get.
Once you've built a credit rating,
keep it clean! It's important to make
payments on time. Don't commit
yourself to monthly payments you
can't afford.
And if you get into trouble? Bite the
bullet: Call or write your creditors if
you're sending a "short" payment
this month. (It's better to send partial
payments to all creditors than to pay
some and not others.)
"There's no question that people
would rather discuss their sex lives
than their financial situation when
they're in a bind," one credit expert
told The Wall Street Journal. "But it
gives you an enormous edge if you
contact your creditors before they
have to pressure you.''
In Control:
Be a Credit to Yourself!
Going out into the "real world" is
something to celebrate. But the oppor-
tunities and privileges of adult life also
include responsibilities.
Coping with adult credit means cop-
ing with yourself: learning how to tell
wants from needs, sidestepping emo-
tional spending, finding ways to sepa-
rate who you are from what you own.
You are the key to your own credit
success. Can you keep credit spending
to no more than 15 percent of your
take-home income? Will you be able
to resist overspending when your
friends start buying original artwork
and imported cheeses?
Credit. It can provide immediate
comforts and ease your way to a com-
fortable future. And it's yours just for
the asking.
Handle with care! Q
10 plus/SPRING 88