Or Is One Enough?

Q: I've lived in the US little over six months now, and am trying to establish credit, which is proving to be a bit more difficult than expected. I'm not planning on buying car or a house anytime soon, but since my crystal ball is a bit hazy, I'd like to get prepared for the future. Though living here before as a student, my credit history was blank. But I did get a secured credit card, and I've had that for maybe four months now or so. It's from Orchard Bank. Now, would getting more (secured) credit cards help build my credit, or is one enough? Does the type of the card matter, is there a difference how a secured and unsecured with a low credit limit are reviewed? I was looking at the unsecured ones, and they just don't seem attractive; I'd be almost well over $100 in debt without even using the card, by just taking it! And do I have to actually use the card in order to build credit, or is it just based on having it and paying whatever balance there is in time? Also, I didn't realize it before, but requests for credit are negative also, and I've had rejections for too many requests. Apparently they stay on the report for one-two years. But I shouldn't worry about that too much, since in that time I'm just starting to be established, right?

A: The best way to go is to establish your credit with your local bank or credit union. If one is available to you, credit unions are usually better deals. Start a savings and checking account. Go for the "free" checking account without all the costly bells & whistles. If you don't have enough money to establish the minimum for a free checking account (seldom more than $1000 at a bank, often $5 at a credit union), you might want to rethink why you need more credit cards. Once you have established yourself at the bank or credit union, research the terms for their credit cards. Again, the credit union is likely to have annual better fees (often 0) and interest rates. If you don't qualify for a "free" or unsecured card, you may be eligible for a card secured by a portion of your savings account. Though it will

restrict your use of that money, you will still be drawing interest on it, and it will not actually "cost" you anything. Continue to shop around, though, if you don't find exactly what you want. To build credit, you have to take out loans (or use credit cards) and pay them back on time. Merely having a credit card (or several) with a big credit limit does not "build credit." You have to demonstrate that you can USE money responsibly. The easiest way to do this, since you already have a card, is to use it to pay for necessities ONLY, and pay off the full balance every month. That way you establish a pattern of responsibility without incurring interest charges.