Now that you are familiar with the issues surrounding establishing credit, credit reports and agencies, types of credit accounts, and some of the primary credit laws, it is important to go back and review some of the most common barriers to obtaining credit.
As has been stated, late payments recorded on your credit history are one of the primary barriers to credit. Therefore, it is critical to routinely inspect your credit report for incorrect information.
Many persons, especially first time home buyers, may have difficulty securing a home mortgage, due to lack of credit history. If you are new to using credit, begin by establishing a banking presence and developing a positive credit history.
If a family member or good friend asks you to co-sign for a loan or credit account, know what you are getting into. Co-signing can negatively impact your credit if the primary borrower does not pay. Other creditors may believe that you have not successfully managed your credit, and thereby not give you a credit card or loan.
It is very important to manage your credit in a manner to avoid judgments, collection accounts, charge-offs, bankruptcies, and foreclosure. These items are viewed negatively and will stay on a credit report for several years.
Finally, always be sure to pay off all students loans. An unpaid student loan can prevent you from obtaining a home mortgage in the future.
