Building Good Credit
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DWeigs;190630 wrote:
Well I just turned 18 the other day and I am very intrested in building good credit for myself at a young age. I was just wondering on what advice you guys could give me as to doing this. I do plan on putting my cell phone in my own name here pretty soon, I know that is a big one for a kid to build credit. But what else can I do? Thanks for your input in advance!!I thought i would do the same thing. Don't worry about your credit. Don't go out of your way to get credit cards or bills especially if you don't need them. You will have credit... just pay all your bills you encounter on time.
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Best suggestion. Get a secured card thought USBank. Minimum $300 dollar limit and you put down $300. They put that money in a savings account. If you ever get in trouble with the card they can use the money from the savings account to pay off the card. Trust me im doing tyhe exact same thing. If you gonna use your card dont use more then like 70% of the credit limit.
> Parker;299126 wrote:
> blah blah blah blah blah blah blah blah blah blah blah blah German cars are the best thing since sliced bread. -
Just get a credit card and buy gas only with it. Pay it off at the end of every month. Don't ever exceed 50% of the credit limit and NEVER miss a payment. If you can find a card that doesn't penalize you for never using it you could open two CC accounts and when you get the cards in the mail make sure you validate/register/whatever them so they are active...then shred one card so you can never use it.
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Bookem;190655 wrote:
See if your bank will do a starter loan, usually like $500- $1000. You will pay a little bit in interest, but just keep that in your account to repay the loan. Do that along with a credit card and you'll be on the right track.Except this way makes you lose money for no reason. A CC is an interest free 30-day loan basically (up to the credit limit) as long as you can pay off the balance before it accrues a financing charge. That's why you just buy gas with it and pay off the balance on time and you'll be fine.
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StangerBanger96;190657 wrote:
Except this way makes you lose money for no reason. A CC is an interest free 30-day loan basically (up to the credit limit) as long as you can pay off the balance before it accrues a financing charge. That's why you just buy gas with it and pay off the balance on time and you'll be fine.Sometimes you have to pay for things you want. @ 7.25%, what my bank has these loans set at, $36- $72 over a 6-12 month period isn't that bad. If you can't afford that probably shouldn't have a credit card then. Just an option though. Not all credit cards are 30 day free money. some of the starter cards are charged by an average daily balance. Also some starter cards you have to pay a yearly fee.
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DWeigs;190661 wrote:
Well here is the next question how long should I wait until I should apply for a credit card?? I turned 18 on tuesday...I applied the day I turned 18.
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DWeigs;190667 wrote:
Well i applied for a capital one card today and i got shut down!!Wells Fargo, student card.
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StangerBanger96;190668 wrote:
Wells Fargo, student card.I just did some research on this card and it says.... "You must be a U.S. resident, age 18 or older, and a student enrolled in an accredited two- or four-year college, university, or trade school."
The problem with this card is that i am still in high school.
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You might have a better chance if you go in to a physical bank and talk to someone. That way they can see if you're level headed and you can tell them that you just want a low limit card to start building credit.
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Small credit card, and ALWAYS carry a small balance on it (under $100). If you carry no balance from month to month it does not get reported as credit on your credit report. You may also want to look at an auto loan for 12 months or so. After that, student loans, personal loans and mortgages will be the logical next steps.
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tjamz;190680 wrote:
Small credit card, and ALWAYS carry a small balance on it (under $100). If you carry no balance from month to month it does not get reported as credit on your credit report. You may also want to look at an auto loan for 12 months or so. After that, student loans, personal loans and mortgages will be the logical next steps.Do you really have to keep a balance on your credit card for it to show as credit?? Cuz i pay mine off every month whenever i use it??
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It builds faster if you carry some balance. It shows that you are able to manage debt. You'll notice that as you start having continued months of manageable debt that the good credit card offers (4.99% fixed APR for example) will start coming more frequently. You become a good credit risk for these companies. Also, don't cancel your credit cards unless they have annual fees/dues/etc... Part of your credit score is based on available credit vs. debt owed. The higher your available credit the better your FICO score will be (within reason).
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I have a very high credit score and I have never carried any balance on any card ever in over 10 years of card usage. Carrying a balance is entirely unnecessary to establish good credit.
I've got multiple cards with "healthy" limits. All are no annual fee. I spend enough with all of them that if we forget to pay a bill or something like that because we're on vacation, when we get back, I or my wife call up, demand that they rescind the late fee and finance charge, and they always do.
We route as much spending as possible through a card with a cashback bonus. It adds up pretty fast, honestly.
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thrash;190824 wrote:
I have a very high credit score and I have never carried any balance on any card ever in over 10 years of card usage. Carrying a balance is entirely unnecessary to establish good credit.I've got multiple cards with "healthy" limits. All are no annual fee. I spend enough with all of them that if we forget to pay a bill or something like that because we're on vacation, when we get back, I or my wife call up, demand that they rescind the late fee and finance charge, and they always do.
We route as much spending as possible through a card with a cashback bonus. It adds up pretty fast, honestly.
Your credit will build faster by carrying small balances, nearly every financial adviser that I've ever read about/spoken with will attest to this. Like I said, it doesn't need to be a lot that you carry, but a small amount is actually healthy for your credit establishment. Necessary, absolutely not....but he asked how to do it w/ the quickest results.
Paying your credit card off in full is a smart thing to do except when you're trying to establish credit. You're trying to demonstrate you can handle credit. Make your payments on time, but keep a small balance on the credit line, say, $100 to $200 dollars. Card holders that pay off their balance each month are low-profit accounts for the credit card issuer. So keeping a small balance on the card demonstrates that you can handle your credit line and aren't unwilling to pay interest on outstanding balances. That makes you a better prospect the next time you apply for credit.
Carrying a zero balance on a student card will give you a credit history, but it won't help the next lender decide if you can manage a loan where you carry a balance. This Bankrate feature has more on what's good about student credit cards.
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