A Checklist - Are You Credit Worthy?

Oct. 20 marked the ninth annual Get Smart About Credit (GSAC) Day. The GSAC program, sponsored by the American Bankers Association Education Foundation, is a national campaign of volunteer bankers who help young people develop responsible credit habits. In honor of GSAC Day and the thousands of young people across the nation reached with presentations about credit throughout the month of October, here is a checklist to test your creditworthiness.

• Have you opened a checking account and a savings account?
  Applications for most forms of credit will ask for both types of accounts. Demonstrating that you can save money and manage a checking account can improve your standing as a loan candidate.

• Have you opened an account in your name only?
  It is important to establish and maintain an individual credit history -- one separate from relatives, friends and even spouses.

• Do you use retail store and gasoline credit cards and pay them off on time?
  Cards for local department stores and gas stations are easy to obtain, but be careful not to over-extend yourself. Be sure you always pay your bills on time. Remember, your goal is to establish a positive credit history.

• Can you show some stability?
  Most potential creditors like to see that you have been in your residence for at least a year and that you have a consistent source of income.

• Have you applied for a secured major credit card?
  Your bank may be willing to give you a credit card if it is secured by a savings account. Your credit limit may be defined by how much you have in that account, and that account cannot be used for withdrawals. You may also be able to obtain a card if you demonstrate a few months of responsible use of a store or gasoline credit card.

• Have you applied for a standard, unsecured bank credit card or small loan if needed?
  If you have used credit responsibly and have established a positive credit history, you improve the likelihood that a lender will extend credit to you in the future.