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How do I [build credit]?
Krikee
Registered User regular
Registered User regular
It's pretty much all in the title. I've tried buying a new car, not enough credit history; new motorcycle, same story. I'm contemplating financing a new TV + stereo but, will that send me in the right direction?
Krikee on
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Then, and I cannot emphasize this enough, pay the full balance every month. At this stage, there is no reason to carry a balance unless there's some emergency.
Once you show Visa or whatever that you are a responsible person, your credit rating will improve.
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I have a credit card I got in the past month (had a co-signer, couldn't get one without... damn economy) so it looks like that will fix me up shortly. Thanks for the input everybody; this part of finances kind of blind sided me and it sure does make everything a pain.
This is the way to go. Financing a car is one thing, buying a TV or stereo is the kind of thing you should buy with real money, not credit.
TVs and Computers are a great way to do it.
save up your money until you have more than you need for a computer (say 1300 on a 1000 dollar computer) put the computer on your card. after the cycle rolls around pay 600, then the remainder the month afterwards.
I did this the moment I was eligible for credit (my card had a cosigner then as well) and I am only 21 and was told by the bank earlier this month that I had spectacular credit.
it pings your credit every time so if you charge a bunch of small things it takes a bunch of hits. I was able to sign up for my own cell phone plan with $0 deposit and unlimited spending amount with ATT when I was 19 (something most people my age have to pay a $300 deposit or more for) because I charged a computer, paid it off, then upgraded my computer and paid it off.
I charge almost everything to my credit cards and I have amazing credit. Over 800 on two out of three agencies, the third being the one with which I have no cards (or one that I don't use). I have no clue what you mean about your credit getting pinged by small charges.
I second the "get a card and use it for stuff you would normally buy then pay it off every month" advice. If you're too nervous to do that, get a card and stick it in your sock drawer and never use it; you will still build credit this way.
Paying off a loan quicker than scheduled does in fact have a better beneficial impact on your credit than paying it off on the payment schedule? Didn't know that. This is good stuff. I've even looked on the internet for a better description of the mechanics of credit and have come up short.
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I use my credit card every month for bills, groceries, gas, etc. and pay it off in full every month. My credit is excellent. I would recommend you try to do something similar. If you can't get any credit cards, ask your bank about a secured credit card, that might help. Getting a co-signer on a big purchase will also help. Having bills in your name that you pay on time every month will help
I see your logic, but I've never encountered any actual evidence of this. Whether or not you make them money they will still report to the credit agencies that you were not late/missing payments and that you paid greater than the minimum amount required.
The thing is that you're also going to need the credit card companies to up your limit to get a higher credit rating. If you keep a $500 - $1000 balance on a credit card for a year or two without ever going delinquent, you should be able to get your credit limit to jump from around $1000 to the over $10000 mark pretty easy. Then pay it off every month and now you have a large amount of available credit available to give you a high credit rating. Keep in mind that this advice is intended to go from no credit to good credit in a hurry.
I'm fairly certain that this isn't the best way to build credit. Actually, I'm 100% certain that this isn't the case.
You won't build credit "better" or "faster" by leaving a balance. In fact, the less credit you use, the better your credit will be. The "core" factors in building credit are 1) having multiple tradeline accounts (that is, having multiple credit sources) usually around 3; 2) paying your balance in full every month; 3) keeping your total balance at under 10-30% of your total credit limit.
Here's a quick MSN Money link.
What you don't want to hear is that building credit takes time. Open a Checking and Savings account, then get 3 credit cards. Start charging just one thing on each, ensuring that you pay your small balance every month in full. The banks want to see that you 1) take on reasonable debts, and 2) are financially able to meet your credit obligations in full. Having a good credit score has zero to do with how much money the finance companies make off you.
If you want to fast-track it have a family member co-sign an auto loan for you. If you have no credit, you'll probably need them to so-sign those credit cards, too. As soon as you do have credit, close those accounts or otherwise remove that co-signer from the account.
Co-signing is serious business, and you need to have a co-signer understand that. A co-signer isn't only to get you the loan in the first place, but to be held accountable if you can't pay the bill, as well. Don't put someone else (even family) in that situation if you can help it.
Best of luck.
also, I put all big purchases on my credit card and pay them off immediately. heck, I put the down payment of my new car on my credit card (which the dealer looked at me wierd for because I was puting 1000 on a 9.9% credit card instead of a 0% car loan....) and then paid it off. just make sure that you never have more than 50% of your total credit used at any time as that can effect your credit as well.
If you really want to increase your accounts you can also get some 'store credit cards' (like a sears card or a bestbuy card) and use them whenever you go to that store. make sure you pay them off IMMEDIATELY as those things usually have a 20-25% interest rate)
Other than that, you can wait. time will increase your credit score so long as you don't do anything bad to it. I suggest going to annualcreditreport.com and checking your credit first. get the experian report and see whats poorly effecting it.
And don't go overboard with getting cards, because the immediate effect of opening a new line of credit, to my knowledge, is to slightly lower your credit score. I believe this is because your credit score can be affected by the number of inquiries as to said score.
thats only if you solicit the request for a credit card.
those credit card offers that you recieve by mail for example are unsolicited but the company still ends up checking your credit before they send you the offer. these don't affect your credit score if you accept them.
I believe store credit cards work the same way since the 2 in store credit cards didn't show up on my credit report as negative inquiries.