Establish and Maintain Credit Part 1
Credit is your track record with regard to meeting your financial responsibilities, sometimes called your creditworthiness. If you pay your bills on time and no one has any lawsuits against you, your credit should be fine. However, all credit is not the same.
Depending upon your earnings, the property you own, and other factors, you may have credit up to a certain amount of money, but not beyond that amount. This is sometimes called your borrowing capacity.
In the beginning, you have no credit whatsoever. That is why the guarantee of a parent or other responsible person may be necessary for things such as credit cards. As time proceeds and you prove yourself worthy of the amount of credit that has been extended to you, your creditworthiness and the amount of credit you may acquire increase.
You may find it difficult to get your first credit card. However, when you do get it (and use it responsibly), you will become flooded with invitations to get other credit cards. One of the strange things about credit is that often those who need it least have the most of it. For the average person, establishing credit is a process of receiving a limited amount of credit, using it wisely, and then receiving more and more credit up to the point your circumstances justify.
There are a number of companies and services that obtain credit information and make it available for a fee. For most people, the most important credit information available to others is found in three agencies: Equifax, TransUnion, and Experian.
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