When many women think of credit, their first thought is the array ofplastic cards in their wallets -- one from nearly every store in themall. Maybe you're at the other extreme -- so wary of credit thatyou've paid off your mortgage and your car loan and cut up all yourcredit cards.
Too much credit or not enough -- both can hurt your credit scoreand cost you thousands of dollars or even a job offer. And if you'reone of those women who lets your husband handle all the bills,investment ignorance will not lead to financial bliss.
Whether you're fresh out of high school or college, just married,long married, just divorced or widowed -- you need your own creditscore. Used correctly, credit can be your BFF (best friend forever) as,married or not, you build a strong credit history that will help youreach your goals. Here's how to begin building.
1. Start small
Open new credit cards and credit linesgradually. "If you open too many credit cards in too short a period oftime, it looks like you're desperately seeking money," says ManishaThakor, co-author of "On My Own Two Feet." "A young woman just startingher career goes shopping for a career wardrobe -- it could hurt hercredit score when she goes to get her first apartment."
2. Limit yourselfTwo or three credit cards are enough.Although many retailers offer a discount on the first purchase when youget a store card, that discount can cost you in higher interest ratesand higher penalties than for a traditional card, Thakor says.That additional card also could be the tipping point that pushesyour credit score down a notch. "Someone goes out and gets a Kohl'scredit card, saving 10 percent," says Todd Huettner, president ofHuettner Capital in Denver. "You think that's good until you realizeyour credit score just went from 720 to 719 or from 700 to 699 and thatcost you one-half point on a loan of $100,000. You saved 10 percent ona $50 purchase, but you just lost $500 on your house."Plus, if you have too many bills to juggle, you increase thelikelihood you'll pay one of them late, dinging your score again. "Iknow one woman who had 20-some credit accounts," Huettner says. "That's300 payments in a year. If you have a 99 percent accuracy rate, you'restill going to have three late payments a year."3. Get your ownShare and share alike doesn't work for credit-- get some bills and credit cards in your own name to establish aseparate credit history from your husband. "Many married couples tendto share credit cards or loans in a joint account, often under thehusband's name. All women need to have their own credit in their ownnames to establish their own credit history in case of an unfortunateevent such as divorce or death of a spouse," says Liza Landsman,executive vice president at Citi Cards.
4. Knowledge is freedom"When my ex left, I thought I kneweverything about my own financial position," says Joan Perry, author of"A Girl Needs Cash." "It surprised me how much digging I had to do tofind out my own financial situation." Make sure, Perry says, that youknow the interest rates on your mortgage, credit cards and loans, andwhen those rates will adjust.5. Separate finances slowlyIf you and your husband divorce,closing too many accounts at once can hurt your credit score. "In adivorce, people's first instinct is to go and shut down accounts so theother spouse can't charge stuff," Huettner says. "That's the worstthing you can do from a credit standpoint is close a bunch ofaccounts."Instead, close accounts gradually over time. "I had one divorcingcouple who closed one account every six months," Huettner says. "Ittook almost 24 months to close their last card because they wanted tokeep their credit score high."Next Page>Bankrate.comis the Web's leading aggregator of information on financial productsincluding mortgages, credit cards, new and used automobile loans, moneymarket accounts, certificates of deposit, checking and ATM fees, homeequity loans and online banking fees. Visit Bankrate.com to get the tools and information that can help you make the best financial decisions.
