Obtaining Credit

Why do we so often feel apprehensive when faced with the prospect of having to obtain finance? Whether it be for a new car, to buy real estate, or simply to fund a vacation - the art of obtaining finance has long been something that seems to have it's own set of rules and laws. But does it need to be that way? Perhaps not, if you follow a few fundamental tips when applying for a loan. 

You can be pretty well assured that you'll be scored on the number and types of existing loans and charge cards you have. In fact, one of the ironies of obtaining finance, is that it is a lot easier to do so once you've already used other types of credit. The most highly desired options for establishing a credit rating are travel-and-entertainment cards, followed by bank credit cards and department store charge cards. 

In most countries, you are entitled to obtain a copy of your credit report if you are refused finance. Mistakes have been known to happen, so you may need to clear them up and re-apply. Or you could go to another lender. Each one has their own minimum standards, so you may find one who is prepared to take a greater 'risk' in order to provide finance. Finally, if you are new to the credit world, here are some tips you can take to establish a credit rating. 

1. Open and use a checking account

2. Start a savings account and make regular deposits (and minimum withdrawals!)

3. Join a credit union where you work

4. Take out, use and repay promptly your bills on a department store credit card.

Tip: Department store cards are usually easier to acquire than bank and credit cards, which generally require you to earn a certain minimum salary, and also have several other credit requirements. 

In many cases where obtaining finance is required, it is important that your attorney and accountant is involved from the start. Contact us if you'd like some assistance in determining how best to apply for finance, and to ensure that all the necessary steps are covered.