Before deciding to buy credit insurance, ask lender following questions:

How much is credit insurance premium?

Will credit insurance premium be financed as part of loan?

Can you pay monthly instead of financing entire premium as part of your loan?

How much lower would your monthly loan payment be without credit insurance?

Will insurance cover full length of your loan and full loan amount?

Can you cancel insurance? If so, what kind of refund is available?

Prior to signing any loan papers, ask lender whether loan includes any charges for voluntary credit insurance. If you don't want credit insurance, tell lender. If lender still insists that you take out credit insurance, find another lender.

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Most creditors use credit scoring to evaluate your credit record. This involves using your credit application and report to get information about you, such as your annual income, outstanding debt, bill-paying history, and number and types of accounts you have and how long you have had them. Potential lenders use your credit score to help predict whether you are a good risk to repay a loan and make payments on time.

Many people just starting out have no credit history and may find it tough to get a loan or credit card, but establishing a good credit history is not as difficult as it seems.

You might apply for a credit card issued by a local store, because local businesses are more willing to extend credit to someone with no credit history. Once you establish a pattern of making your payments on time, major credit card issuers might be more willing to extend credit to you.

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