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Marino on Money: August 5

READ MORE: Marino on Money: August 5
This week we have been talking about establishing credit. Obtaining your first credit card or loan is challenging. Lenders require a credit history, but are reluctant to help you establish one. It really is a catch 22. Tuesday we discussed four factors that lenders consider when offering credit. These are employment history, residence history, bank accounts, and utility accounts. These factors can show stability, which is important to a lender. If I need to establish credit for the first time, I should start with my bank. Having a checking and savings account at the same bank hopefully shows you can manage money responsibly. Also, building a relationship at a bank may carry some weight when they're deciding whether to offer me credit. I would also look to a department store. They offer discounts on purchases when you apply for a credit card. While I never recommend constantly applying for cards to receive a discount, it is worth it to apply one time and see if you the store will issue you a credit card. If you are fortunate enough to obtain a card, be careful. It may feel like free money when you first get it. In a way, it is free. At least until the billing cycle begins. Then, the money you borrowed on that card will probably become the most expensive loan you have ever received. Lenders look at how much credit you use. If your credit limit is $500 and your balance is over $450, your credit score will be negatively impacted. Having a credit card constantly maxed out shows a lack of fiscal discipline. So lenders may be apprehensive about offering more credit. What if someone was turned down by their bank and a department store? Where can you receive a credit card? We will discuss that tomorrow. If you have a financial question for Ross, you can use the Marino on Money page.

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Credit Cards

I saw your report tonight about CC and what do you have to say for people like me that had a credit score of 750, back in february I recived a letter form one of my CC telling me that due to the economy they were mitigating their risk and lowering my credit of $10k to the current balance on my card of $1.5K. So now it looks like I'm maxout in that CC and that lower my credit score. Not to far from that letter I started reciving letters from all my other CC with the same story but now adding that I'm maxout in one or more of my accounts. Mind you that I have not being late in over 82 months in any of my CC. At this point I can care less It took me a lot of efford to get to that score number, they got bail out, they get goverment hel and us as consumer get screw every single day. From now on they are getting the minimun payment. They are no longer in my priority list. Everytime you turn around they are there just to scam you. thanks for yout time Yvonne