Advantage Realty, San Francisco East Bay Homes, Real Estate, Mobile Homes, Manufactured Homes, Joanne Gardiner, Broker, 510-429-4800 | Joanne L. Gardiner, Broker, e-PRO Realtor®

Get ready to buy by learning how to build your credit.

1) Make a budget
This is a first step in learning how to monitor your finances and avoid making costly mistakes, like bouncing a check or paying lots of interest on credit cards because you can’t pay off your balance. List all your expenses, including tuition, books, school supplies, food, gas (if you have a car), your cell phone bill, entertainment, and miscellaneous costs. Then decide if you’re going to get a job to help offset your costs. If you do decide you will work and take classes, move quickly – the best part-time jobs usually go fast. Aside from the money a part-time job pays, it also helps you avoid having too much unstructured free time – time which tends to go to waste.

2) Learn how credit works
If you have ever watched a two-year-old child at play, you know that people are more vulnerable at some ages than they are at others. Just as two-year-olds are prone to touching hot stoves because they don’t know the danger, so too are 18-24 year olds vulnerable to causing pain by using credit unwisely. Students, do yourself and those who care for you a favor and learn how credit works before you start using it. There’s plenty of useful and free information available in the credit education section of myFICO.com.

3) Use credit with care
Students are vulnerable to developing bad spending habits and abusing credit cards. If you’re a parent or a student, you should know that credit card trouble is common among college kids these days. Don’t let yourself fall into this trap.

A Nellie Mae survey of college undergrads in 2000 revealed some disturbing numbers:

Average credit card debt per student was $2,748
Thirteen percent had credit card debt between $3,000 and $7,000
Nine percent had more than $7,000 in credit card debt

Credit cards are the most expensive way to buy on credit if you consistently carry balances from one month to the next. Use your new card sparingly and get a feel for how interest charges affect the balance from month to month. After a month or two it will become clear that if you can’t pay off the balance in full, you should at least limit it to an amount you can pay down quickly so as to minimize interest charges. Once you understand this basic concept, your odds of getting into credit card trouble will be greatly reduced.

If you find yourself running up balances on credit cards to pay for everyday expenses, you should probably consider getting a student loan (or some other form of longer-term loan) to pay these expenses instead. You’ll still be living on borrowed money, but at least you’ll be paying less to do so.

Finally, when starting out, try to limit the number of credit card accounts you open. This will make it easier for you to manage your credit card use and cut down your odds of getting into trouble. By using credit cards responsibly, you’ll minimize your borrowing costs, get a good start on building your credit history and be more financially secure when you graduate.

4) Check your FICO scores at least once a year
Once you’ve built enough of a credit history, you will have FICO scores. Lenders will use your FICO scores to determine the interest rates you’ll pay when you borrow. If you’re college-bound or in college now, get used to checking your FICO scores and credit reports at least once a year. myFICO offers two products that give you instant online access to all three of your FICO scores and credit reports – FICO Deluxe and Suze Orman’s FICO Kit Platinum. Either product will help make you a more savvy consumer and build awareness of how your money habits affect your FICO scores.

Reprinted with permission
© 2005 Fair Isaac Corporation. 901 Marquette Avenue, Suite 3200. Minneapolis, MN 55402. (612) 758-5200. All rights reserved. Fair Isaac, FICO, and myFICO are trademarks or registered trademarks of Fair Isaac Corporation in the United States and/or in other countries. Other products and company names herein may be trademarks of their respective owners.

Thank you,
Joanne
Assisting buyers and sellers throughout the San Francisco Bay Area for more than 30 years.

P.S. For information on buying or selling east bay homes, please contact me at 510-429-4800 or send me a note on the Contact Joanne form.

Joanne L. Gardiner, Broker, e-PRO Realtor®
California Department of Real Estate Brokers License Number: 00822285
California Department of Housing and Community Development Occupational License Number: SP1178511

Office: 510-429-4800
Cell phone: 510-589-4794

We serve the greater San Francisco bay area.

Our primary service areas in the San Francisco Bay Area are: Hayward, Castro Valley, Pleasanton, Dublin, San Ramon, Danville, Fremont, Newark, Niles, San Leandro, San Lorenzo, San Ramon, Sunol, Oakland, Foster City, Burlingame, and San Mateo.

The types of real estate in which we specialize are: single family homes, duets, condominiums, townhomes, garden homes, PUDs, manufactured homes, mobile homes, income property, investment property, tri-plexes, four-plexes, apartment property, and special use properties such as churches and mobile home parks.

Count on us for: Alameda County homes for sale, Contra Costa County homes for sale, San Mateo Country homes for sale. And now with our expanded Multiple Listing Services (MLS), we easily serve all bay area communities.