Credit Cards & Build Credit History

Many of us, when we go shopping at a store let say Kohl’s, Old navy, GAP, Sears, Macy’s or any store you can think of, the cashier asks for a question : Would like to apply for a XXX ( store name) card and save an additional 30% ? And they will say, you will get 10% discoutn every time you buy here. Many of us, especially who do not know the concept of credit cards and credit history, just do simple math and say, I will apply to save money, But, That the BIGGEST mistake ! NEVER EVER DO THAT. If you keep applying for too many credit cards, you ruin your credit history. It is a business strategy the company is using on you to lock you down and let you buy only at their shop. If you are in US in the first 6 months or even more and you never had a credit card before, the chances for you to get reject are very very high. If you get a rejection, it stays on your credit history for at least 2 years. It lowers your credit score. So, do NOT Do that. It seems very tempting, but NEVER do that, it ruins your credit history. You should own credit cards from Banking companies and use them instead.

First of all, when you come to US, you do not have credit history. You have to build your credit history slowly. If you are a student you can apply for student credit cards in the banks in the school. If you are H1B visa and would like to build credit history, first you need to open a checking account in a bank like Chase or Bank of America or any other good bank. After that, ask them for a SECURE credit card. It is similar to a debit card, but a credit card. What you do, you give the bank $500 and get a secure card, so your credit limit is $500. You can start using your card and use it and pay it off completely by the month end. Never keep outstanding balances. After 6 months, you can ask for increase in credit limit. If you have paid your balances on time fully and maintained well, you should get an increase in credit limit. Slowly, after that you use your card and start building credit history. Here is the trick : DO NOT APPLY for more credit cards in stores or anywhere else. It takes time to build credit history, so give it an year or so. Also, do not have more than 3 – 4 credit cards at the maximum. I recommend only 2. Your good credit history will make your bank give you more limit. Some ways to build credit history are : Have a utility bill like Electricity bill or phone bill on your name, Pay rent on your name.

You can check your credit history for FREE once in an year. YOU will not get credit score for free. According to Federal Credit bureau act, you have the right to know your credit history. You can check it for free at https://www.annualcreditreport.com/cra/index.jsp . If you need score, you might have to pay. Credit history has all the info about your finances and personal info. It lists all your accounts, address you live in, amount of credit limit you have, your credit inquires that got rejected, etc. It is very detailed. Go the website I have given above and you will get more info. Check other Post for credit score concept !

Again, DO NOT Apply for more credit cards becuase you will save 30 % on something….It screws up your credit history !