Getting the Financial Job: Part 4

You need good credit to get a financial job, which is why I have written this series. Blog one dealt with repairing bad credit, the second blog with keeping a positive and respectful attitude and the third with maintaining credit. This blog will deal with establishing credit for those without credit but with credit that isn't bad.

This usually applies to the young, or to someone who never established credit because they didn’t want debt. Unfortunately, in this world, having no debt can be as bad as bad debt. Financial institutions don’t like to loan to people who have never borrowed from someone else.

They are several ways to go about getting credit:

The first is to pay according to terms agreed upon with the creditor. If you have a student loan, you received it because the government co-signed on the loan. Make full payments on time. If you have utility bills also pay responsibly. The utility bills have to be in your name though, not someone else’s for this to affect your credit in a positive way. You can get bills put in your name with a security deposit.

Paying on debt you incurred like a large hospital bill can turn a financial drain into a financial benefit. But before you do anything, read my blog “Getting the Financial Job: Article I” and "Getting the Financial Job: Article II." if the bill's a bad debt.

Secondly, in establishing credit, you can get a collateralized bank loan or a secured credit card. This is where you establish credit by using your assets. Financial institutions love collateral. But take at least 6 months to repay the bank loan, making on time payments, or the credit rating agencies won't count it towards your credit. Any credit card needs to be paid in full whenever possible and on time.

Thirdly, get a job, even if it is menial. Employment's a must for establishing credit. Even in a bad economy, there are jobs that others won't do. Remember, you're looking long term.

Fourth, don't give away personal information to companies if contacted over the phone or in an e-mail. Institutions like Pay-pal, banks, etc. won't ask you for personal information over the phone or in e-mails when they contact you. These are con artists trying to trick you. Also beware of people who call you over financial issues demanding payment, especially if they're threatening.

A collection agency that's legit cannot contact you again by phone or cannot contact your boss if you request that they don't. There are crooks that will call to scare you into giving them personal information. I cannot go into every detail, but this isn't 1800; there are no debtor’s prisons, so use common sense. Oh, and the story about the Education Department having a swat team for unpaid student loans is a myth.

Maintaining and protecting credit's important to establishing credit because it only takes one mistake to lose your credit. And it's hard to re-establish it once you have lost it.

Fifth, establish credit outside the banking system, perhaps at a buy here, pay here auto dealership. Make sure you have a trust worthy mechanic check the car thoroughly though. Also, department stores give credit easier than Visa. Getting a cell phone too will establish you with a creditor.

Lastly, get a checking and savings account. Keep a balance in your savings and don't bounce checks. When you finally get credit, keep your debt to income ratio down. Be responsible, and you'll get responses. You're the master in your finances if you choose to be. Credit cards don't kill credit, borrowers do.

By

Jeffrey Ruzicka

Jeffrey Ruzicka is a retired executive of a small company that specializes in industrial water treatment. He lives happily with his wife in Western Pennsylvania and is a contributing writer to FinancialJobBank, FinancialJobBankBlog and Nexxt.