Start building credit rating while young, but learn the lessons of smart credit
News from The Guardian Charlottetown:

TORONTO — To young people credit can be the gateway to the seductive goods their bank accounts can’t afford or an interest-rate trap to be avoided at all costs.

But experts say establishing a solid credit rating is key to building life-long financial stability and not throwing away money on high interest payments.

Later in life when you’re shopping for a new home, the latest sports car or a loan for a new boat for the cottage, your credit score will be what your lender will red circle when reviewing your application.

Credit, when used responsibly, can help improve that score.

Daniel Sarlo, a student at the University of Toronto, got a credit card when he turned 18 on the advice of his father, an economist.

By using the card for his day-to-day purchases and paying the balance fully each month, Sarlo avoids interest charges and increases his ability to borrow more later.

“Realistically, there is no reason to use cash when you could be building up your credit. That’s why I almost never carry any cash around,” he said.

Sarlo says he ensures he never spends more than he can afford to pay off at the end of the month.

“I am using the credit card to my advantage, rather than allowing the credit card company to take advantage of me. I have never had to pay a cent of interest,” he said.

Young people might think b…………… continues on The Guardian Charlottetown

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Related News:

Consumer credit scores for auto loans drop to near prerecession levels …
News from Sacramento Bee:

/PRNewswire/ — Experian Automotive today announced that average credit scores for consumers buying a vehicle have dropped to near prerecession levels. According to its quarterly automotive credit analysis, the average credit score for financing a new vehicle dropped six points to 760 and dropped four points to 659 for used vehicles. Comparatively, credit scores in Q1 of 2008 were at an average of 753 for new vehicles and 653 for used.

Lenders also continued to set favorable terms for consumers during Q1 2012. Interest rates were lower year-over-year and loan terms were longer, giving consumers access to potentially lower monthly payments. For example, the average interest rates dropped to 4.56 percent on new vehicle loans and to 9.02 percent for used. The average loan terms also increased, extending by one month for new and used vehicles to a total of 64 and 59 months, respectively.

“During the first quarter of 2012, car shoppers definitely found more favorable conditions for their vehicle loans,” said Melinda Zabritski, director of automotive cr…………… continues on Sacramento Bee

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