Pay your utility bill to create credit history?

When thinking of credit; most people think credit cards, home mortgages, personal loans and what not. An important aspect of credit report is almost always overlooked and that is your utility bill.

If you think about it, you use electricity, gas, water and any other utility first and then pay bills at the end of the month. So you are using these services on credit and that is why your credit report has a section on payment of utility bills. When you pay your utility bills on time you are building up your credit and not paying these in time, hampers your credit.

This brings up an interesting point. For someone who is starting off on building up credit or looking to rebuild credit, utility bill payments are a good way to score some points on your credit report. Most people will be able to get utilities on their name and then simply paying off your water or electricity bill every month will help you build your credit history.

If you don’t have credit history or have a damaged credit history most companies will still allow you to hold utilities in your name but will have you make a deposit in order to secure their payments.
This still works in your favor because once you get the utility in your name that will help you build your credit history. Utilities also include post paid phones so if T-Mobile refuses you to give you a post paid plan on your name and Verizon does (different companies have different policies) apart from the free minutes and cost you should seriously consider that having the phone in your name will help you build your credit history.

So if you are looking at building your credit history, make sure you get all the utilities as well as phone plans in your own name to gain advantage of these payments in your credit history.

What is a credit union?

Credit Unions are privately owned and managed organizations that are owned by the members that contribute funds to it. This means that each member in a credit union is also owner of it. They are run by the objective of promoting thrift, providing financial assistance like loans and credit cards to its members and are usually not for profit organizations. The policies of a credit union and the day to day working are monitored by a Board of Directors and usually the board is made up of volunteers.
The differences between a bank and a credit union are not very apparent because both these organizations offer similar services, however banks are usually much larger and will have a much broader range of services than a credit union among other differences.

Credit unions are also popular because once you are a member of a credit union it becomes easier to get a credit card or a loan and this is usually a very good way to build credit history.

How to get a credit card without credit history?

Credit unions and secured credit cards are two ways of getting a credit card without a credit history. For this article we will look at a credit union credit card.

There are several credit unions in United States and as far as you and I are concerned they work just like a bank. You can open a savings and checking account, get an auto loan and get a credit card from them. However they are slightly different from banks and if you are interested to know how they operate, you can read about them in Credit Union.

As far as a credit card is concerned, you need to get yourself enrolled as a member of a credit union first. For this there are certain eligibility criteria that you must pass.

Usually these are the ways in which you can get registered:

1. Relatives are members: The easiest way to join a credit union is when someone from your family is already a member. They can just refer you and thats it!

2. Your employers is an eligible entity: Credit Unions have a list of companies which are their affiliates. If your employer is part of this list then you qualify automatically.

3. Your organization is an eligible entity: If you attend a place of worship, school or any other organization that is on the approved list, you can join the credit union.

4. Your community is eligible: If you attend school, job, church or any other organization that is part of an approved community, you get automatic membership.

So as you can see getting membership in a credit union is easier than you think and once you have membership, you can apply for a credit card and in most cases get one.

This may well be the best way to start building up your credit.

How to build your credit history?

Building and maintaining a good credit history has become more important than it has ever been. This is because, today not only do you need a good credit history while applying for a credit card, phone connection, cable, internet, renting out a house but in many cases even employers check out your credit history to determine what kind of person you are.

It is important therefore to understand the components of your credit and what it takes to improve your credit report.

Generally speaking your credit score consists 35% for history of payment, 30% for your debts, 15% for how long your history has been, 10% for new credit and 10% on type of credit used.

The first step that you need to take in order to build a credit history is to get a bank account, depending on your situation you can get a savings, checking or both. While it is not possible for everyone to get credit cards, most people are able to get a bank account. If you are starting from scratch, then this is the best thing to do. Get a bank account and start off.

Once you start off, next thing to keep in mind is that you need to consistently pay your bills on time. This is an important part of your credit report and if you are not in the habit of paying off your bills on time then your credit will get damaged. Even a single missed report will cause damage and you will regret it later. Keep paying your bills on time and build your credit.

An important part of your credit is, how much of it, you don’t use. That means that if you max out your cards regularly, your credit is likely to be worse off than if you used just 10 to 30% of it. It is always a good idea to spend very little on your card and pay it all on time. This helps you create a good history in a reasonably short amount of time.

These are just some tips that any one starting off building a credit history should keep in mind. Its simple to understand, but sometimes get a little difficult to follow, so be disciplined in your finances and reap the rewards in the long run.

What is a stock beta?

If a stock has a beta of 0.7 that means for every percentage gain, the broad market makes, this particular stock will make a 0.7% gain. So if the market moves 10% up, this stock will move up by 7%.

You can define Beta as a value that shows the correlation between the price movement of a major market index and the price movement of a particular stock. A beta of 1 shows that there is a perfect correlation between the index and the stock, effectively if the market goes up by 10% then the stock will also go up by 10%.

Because large companies also form a large part of any major index, the Beta of large companies is always close to 1. In any market movement it is the smaller companies that go up or down substantially and therefore the beta of smaller companies is generally much higher than 1. This means that a 10% gain in market leads to a more than 10% gain in such stocks.

Hardly any stocks have a negative beta because that means that when the market moves up, this stock goes down and vice-versa and this is rarely ever the case with any stock.

A beta of zero indicates that there exists no correlation between how the stock moves and how the market moves and it is rare to find such stocks also.

Beta is calculated using regression analysis and is a measure of stock volatility. Ultimately what we are saying looking at a Beta value is how much the stock is expected to rise or fall with respect to the rest of the market and this is nothing but a means to express volatility.

Manshu Verma