The Secret Of Getting Credit And Credit Cards


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The Secret Of Getting Credit And Credit Cards

 

What Is Your Credit Rating Now?

If you have any charge accounts now, or have ever borrowed from the
bank to buy a car, or if you are paying on a mortgage, there is credit
information on you. Up until a few years ago, you could only guess at what
your credit rating was, because the credit bureau who keep track of borrowers
wouldn't tell the borrowers anything! But that's been changed through several
laws, and now the bureau have to send you your credit file when you request
it. If you've been denied credit on the basis of their record, they will send
you a copy of that record without charge, if you request it within 30 days of
the credit denial. If you haven't been denied credit but just want to know
what your file says, you must pay a small fee to find out.

Why You Really Must Get Your Credit Report

It is well worth your trouble to obtain your report. You may well find
(because thousands do) that there is a piece of misinformation that is
injuring you without your knowing it, which you can straighten out by
submitting copies of documentary proof (never mail originals of anything
important - it may get lost in the mail) of bills paid, payments made, etc.

What To Do If You Are "Unlisted"

If, for one reason or another, you are not listed, or they have
insufficient information on you to "rate" your suitability for
credit, you must take steps to correct this.

What To Do If You're New in Town

If you have no record because you hold no cards and have no charge
accounts, or because you have just come in from out-of-town, then you'd
better start assembling one. It may sound a little ridiculous, but nobody
will lend money to someone's who's always paid cash! You have to have
borrowed money or run up charges and paid them back to be able to borrow
larger sums as time goes along.

Start with the local merchants in your immediate area, the ones that
already know you. Even if you don't need it right now, ask them if you can
set up a charge account with them. In most cases they'll be glad to oblige
you, they already know you're local, and that you patronise them regularly.
when you get the credit, charge a few items each week, and pay your account
promptly when presented. In this way, you'll build up a good credit record
with these merchants in a short time.

Get Your Bank In on the Act

Go to the bank where you keep your checking account, and ask to borrow
a nominal sum (say $500), which they are unlikely to refuse you. Do this even
if you don't need the money, because you do need the repayment record on
their books. Repay the loan on a regular basis when due. Do not accelerate,
and pay it all back the next month. Strangely enough the banks do not like
that, because to them that indicates a "feast or famine" situation,
rather than a steady payer. The interest cost on this loan, even if you have
no need for the money, will be well worth paying to build up your credit
record. Besides, you can minimise this interest cost by depositing the money
you have borrowed (assuming you do not immediately need it), in a savings
account, and collecting the interest, which will defray a good part of the
cost of the interest you are paying.

Once these charge accounts and the loan have been operating for a
while, proceed to stage two, and ask a large local department store for a
charge account. Most likely they will be happy to give you their charge card.
Build up your rating with them by occasional purchases and prompt payment,
and then you proceed to stage three, and apply for the less selective
national credit cards, Master Charge and Visa, which you should a this point
be able to get without too much difficulty.

On the Road

Once you have national bank credit, it's easy to get credit from all
the oil companies, which makes travelling around a cash-free pleasure. Some
gas stations take national cards like Master Charge, but most only take their
own credit cards, so you should not overlook these, just because you already
have others.

First Class With No Cash

Once you have all the other cards, a paid-up loan or two, and a fine
record of promptly paying your bills, you may be able to get the most
selective cards of all, the "travel and entertainment" cards. These
are American Express, Diners' Club and Carte Blanche. These cards operate on
a different system than ordinary retail store cards, or the national bank
cards, both of which are revolving credit plans on which you pay a small amount
each month, until your balance is all paid up. The store or bank hopes you
take a long time to pay, because they make their money on the 1 1/2% monthly
(which is 18% yearly!) finance and, or interest charges.

The T&E cards, however, expect you to pay your bills at the end of
the month! Let your account get 60 days or more delinquent, and they'll
cancel you out as fast as a flash of lightning. Although these cards do not
charge interest, they do charge you a fee for membership.

Let Me Entertain You

So how do you get these marvellous bits of plastic that open up the
doors of exotic night spots in Tangiers as easily as your nearby Howard
Johnson's? Your good credit record, that you have already established, will
be the most help. Since the T&E people want you to pay your bills
promptly each month, they want to know that you have a steady record of
paying bills promptly to other people.

So first American Express, or Carte Blanche, or Diners' Club, looks at
your credit record. Then at your salary or other income. Most of them have
cut-off points below which they will not grant their cards. But even if you
earn more than their minimum requirements, they don't automatically okay you
for their credit. They look at your stability! How do they measure stability?
How long have you worked on your present job? If you don't have a minimum of
two years of steady work in one place, they may not consider you at all. How
long have you lived at your present address? At your previous address? And do
you rent an apartment which means you could move tomorrow, or do you own your
own house, which means you will probably still be in the same place next
year. How stable is your livelihood? Do people in your field of work get laid
off frequently?

Now You Can Really Start to Live!

Once you have all the major national credit cards in your wallet, you
can live like the millionaires do, even though you haven't yet become one.
You can go into a fancy store, or even call them on the telephone, and order
those wonderful luxuries which make life so much more exciting, like furs and
diamonds, for your loved one, or new furniture or appliances for your living
room, bedroom or kitchen. All of this can come true in the wonderful world of
credit. Now in today's world you can charge almost anything on a credit card,
from admission to a nudist camp in Yugoslavia, to medical care at a hospital
in Atlanta, university courses in New York City, funerals in Los Angeles, and
even the services of legal prostitutes in Las Vegas.

Erasing the Bad Marks

But what do you do if you haven't been able to pay your bills promptly,
or you've run up more than you can handle, or you don't have a very stable
work history? Do you have to give up the dreams of credit-card living? Not
entirely!

Once you find out which credit conditions in your background are the
most troublesome (from the credit report you have already sent for), you then
start to create new conditions that you can then base your records on. If you
were out of work, perhaps you can get a reference from someone you know who
owns a business and is willing to say that you worked for him, if the credit
card company checks your references. If your bills are too high, and you've
missed a few payments, perhaps you should see one of the free
consumer-counseling services that are springing up in the larger cities which
will enable you to consolidate your debts into a manageable amount. Remember
that credit card companies don't care very much about the amount you owe, but
they care a lot about whether you pay steadily, every single month, even if
the amount each month is small, and the entire debt will take years to pay
off!

Don't overlook ways to establish good credit without buying anything!
For example, you have telephone service in your own name, you have a record
of paying bills to them which is then part of your credit record. The same
for your gas and electric supplies from you local public utilities. These
services, when they are in your name, will show prospective merchants that
you do have a record of paying bills, even if you haven't yet established
retail store or bank credit.

Using Your Credit to Save Cash!

The world of credit has one more trick you should know about, this one
that actually saves you money right on the spot. All you have to do is carry
your credit cards with you when you go out shopping, even if you intend to
pay by cash. Then you have to keep an eye open for the smaller, personal
service-type shops, where the boss himself, or one of the partners, is always
present (you'll see why in a minute). As you walk in, check out the decals on
the door to see which credit cards they accept. Then select your purchase in
the way you normally would - taking your usual care to be sure you're getting
the right item at the right price. When the deal's all set, produce your
credit card (one of those you know he takes), and say "I'd like to
charge it, please!" At this, the merchant's face will probably drop
about six feet, but he'll take your card and walk over to the imprinting
machine (or maybe to the telephone to check your credit status). He hasn't
got much choice, he has to take your card if he uses their decal in the
window. But the point is, he hates to, because he has to pay the credit card
company a percentage of the sale, usually somewhere between 6% and 10%.

Now, while he's vulnerable, is the time to hit him with a casually
dropped remark like "say, how about knocking 5% off the price, and I'll
pay cash instead?" The chances are he'll accept your offer, because it
saves him the other part of the credit card company percentage, and because
it saves him bookkeeping chores, and waiting from 3 to 7 days for his money
to be credited to him by the credit card company.

The reason why this gimmick doesn't work in big stores is that the
clerk doesn't give a damn what it costs the boss, and has no authority to
take an additional percentage off the price, so he'll just go ahead and write
up your credit card invoice.





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