Comments on: How to Safely Build Your Credit History

By: Noosheh

Noosheh — Fri, 07 Aug 2009 01:27:38 +0000

I did what he told me….Looks like it worked….\

By: christie bice

christie bice — Thu, 23 Oct 2008 16:57:47 +0000

i would like to find out how i can build my credit.i am 22 years old and i am starting remington college on november 17, 2008. i am going for pharmacy technician and i would like to start building my credit so i can get nice things in life and i wont have to worry about having no credit. if you could e-mail me back and let me know what i can do i would really appreciate it. thanks, christie bice

By: Jake

Jake — Fri, 10 Oct 2008 15:28:36 +0000

The strange thing is, to have good credit, you pretty much have to be in debt, which many people think is a bad thing. But with good management, debt can be your best friend. Consumers with excellent credit can obtain loans with low interest, which can help you free up money to put into equities or other investments. If done right this result in a better financial situation vs. paying cash for large purchases. Managed right credit and debt can be rewarding.

By: Rahn

Rahn — Mon, 06 Oct 2008 22:28:00 +0000

Not all Secured Credit Cards are created the same. At my credit union, I was able to acquire one with a $500.00 deposit, zero fees and a 7.9% interest rate, that, if I understand correctly, I will never be charged, as long as I pay off the entire card before the due date.

I use this card for grocery, gas, etc. purchases and pay it off every month. I usually run the card up to 1/2 or 2/3s of the total credit line, then pay it off before the due date.

By: John

John — Mon, 06 Oct 2008 06:09:11 +0000

My credit score is very high even in this crazy economy, and here’s how I did it:
1) Be a very very responsible person and do not spend or live beyond your means. That is a given. Also given do not be late on payments and check your credit account every other day for your balance and identity theft. We all spend at least 2 hours a day on the PC, make this part of your daily routine.
2) As mentioned before, have 2 monthly payment automatically paid by your credit card, so there is a sense of ‘steady expense’ from the credit bureau side.
3) This step takes a lot of self discipline, watch your step (!!!!) it’s a slippery slope you have to take if you want good credit fast. check your balance every week so you don’t go overboard !!!! –
Remember we are a consumption economy, and credit bureau need to maintain that in order for the economy to flow in the right direction. Naturally if you consume and still manage to pay, you are a great asset to the economy, and it would be wise to get you to spend more, meaning give you a better credit rate, so -
DO USE your credit card ALL THE TIME, but keep your finger on the pulse. Use your card to buy milk, clothes, pens, paper, ink, gas and everything you would with cash. I repeat – MAKE SURE YOU DON’T GO OVERBOARD and NEVER max your credit. Use up to 80% of your credit every month; when it’s up, switch back to your debit card or cash mom gave you. (remember to take into account expenses from step 2)
My system was every evening I would check my expenses for that day from the slips I saved (please tell me you keep those), and took the money (cash)from the ATM and put it somewhere safe, so you can’t spend it. Later on, I had a quazi-savings account which wasn’t for saving, it was a ‘parking’ for the credit costs, and at the end of the month I transfered it back to my checking and paid my credit bills with. For example, you have $500 credit limit. Spend $400 every month with the card, but make sure to transfer $400 (in chunks, as the month goes by) to that saving account, or withdraw cash as spend . At the end of the month, transfer $400 from saving to checking, or deposit the ‘stash’ back to the checking and pay your credit bill at the same time (we all do it from our pc, so it’s an easy two-step dance).
4) don’t pay your balance to the fullest, always keep 3%-5% on the card. It’s not really logical, but it works. They need to feel you need them.
5) if you can’t get a good secured card, go to capital one with whatever crazy slashing rate they give you, you can always bargain later on. Every 3 month make the payment by phone and ask for an APR decrease and credit increase. And insist. If you’re embarrassed to ask, I can’t really help you … trust me it’s just like a market, they bargain with everyone.
6) Advanced stage once you have established something, say $5000 – always have a loan on file, and make sure to pay it of course. If you don’t need the money, put the loan in an account that pays directly to the credit card AND DON’T JUST SPEND THE MONEY. Again, this goes to show you keep borrowing, but stand up to your monetary obligation. If you do this 4-5 times for 12-24 month loan, your credit will skyrocket.
————-
Please remember some of these step require a lot of self discipline and control. Do not follow step 3 and 6 if you feel urges you can’t control when ever you walk by a shoe store or ‘best buy’.
In other words, grow up, and do not repeat mistake 80% of your fellow Americans make.
Be a smart consumer, and spend wisely.
Good Luck !

By: Morgante Pell

Morgante Pell — Sun, 05 Oct 2008 20:32:20 +0000

I’ve often thought about getting a credit card, but I’m not sure I am old enough.

I want to build credit, but I don’t think I’ll be able to open a card yet (I’m only 15).

I have a good job and a debit card/checking account, so I’m confident I’ll be able to pay. Any advice for getting a first card? Do you know the minimum age?

By: Tom

Tom — Wed, 01 Oct 2008 21:25:23 +0000

This might sound stupid but here goes…

If I pay off the bill in full each month what is the incentive for the company to lend to me in the first place? Surely the ideal customer (from the bank’s point of view) is someone who doesn’t keep up with their bills but has good collateral?

I have two cards which I got for the cashback and I just pay off the bill in full every month by Direct Debit.

By: reulte

reulte — Tue, 30 Sep 2008 13:01:51 +0000

Andrew – #43 – I have nothing to support my claim that the bill / name / address isn’t mine. (How can I prove a negative?) The /credit bureaus/agencies say they have the bill under my SS# and the police won’t take a report without me jumping thru a dozen hoops of their making because I wasn’t in my state or residence when the bill (a utility bill – even though I CAN prove I lived 1500 miles away at the time) was originated and it happened ‘so long ago’ (that was when I returned to my home state and got my credit report). At this point I don’t want to make hash of it by the bill somehow getting back to the original defaulter with my SS# on it. Every so often, I think about pushing to have it off my report, but then I sink back into work, kid, life and all the attendant busy-ness.

Comment 44 – Hmmm. Obviously, I’m wrong — and I’ll keep that in mind when my boy gets a bit older. Assuming that he’s like his thrifty mom!

By: Martin Wilson

Martin Wilson — Sat, 27 Sep 2008 21:22:58 +0000

I too am surprised you didn’t mention annualcreditreport.com. It’s free and just forwards you to the either TransUnion, Equifax, or Experian. It’s very easy.

In fact, the law firm at which my mother works recommends this website to all their clients. I want to note, this is NOTHING like freecreditreport.com.

By: Old Gold

Old Gold — Fri, 26 Sep 2008 18:37:05 +0000

It’s “The Simple Dollar”… from the starting point of having little to none. With a greater goal (personal goal) of cash-on-hand investments only, this article supplies some good concepts for the “if-you-must” and/or “if-you-had-to-have-it”, where could you get it; the credit industry itself needing sound, stable, and practicle, candidates to supply their industry.
Related Topics: Assurance Industry ; Personal Finance; morgage; 2008 crisis; Government Bailout;
SIMPLIFIED : Personal Finance; financing. Reading, writing, and arithmatic.

By: gr8whyte

gr8whyte — Thu, 25 Sep 2008 21:08:04 +0000

@ Anonymous : Relax! CC companies share security info much like antivirus software companies share virus info so this hole should have been plugged long ago (but is it really? hee hee). It’s actually illegal for a company to send you an unsolicited CC but if you should use it even once, you’ve accepted the terms of the CC agreement just like you’d completed the original application. You would never have gotten the prescreened offer had you not qualified for it in the first place so no real harm’s done unless you’ve 5 days to live and want to buy some toys before you go (they’ll just go after your estate). And what’s better than shredding prescreened offers is to opt out; I have.

By: @Ryan and reulte

@Ryan and reulte — Thu, 25 Sep 2008 19:00:01 +0000

Actually, it does help your credit. My mom put a card in my name for emergency purchases and it shows up on my credit history. I am 19 but I have a credit history spanning from 1998, when I was 10. This got me my first credit card with a credit line of $2,000. Any way that you can share credit with a parent (ie. co-signing loans, which you unfortunately can’t do until you are 18, or having a credit card from their account in your name) is a great way to build credit.

By: Andrew

Andrew — Thu, 25 Sep 2008 17:26:46 +0000

@reulte

Why not dispute it under the FCRA. If they can’t verify the debt they’re legally obligated to remove it from your history.

By: reulte

reulte — Thu, 25 Sep 2008 08:26:24 +0000

Val (#31) You are not supposed to be billed like that . . . but it happens. Try putting an explanation in your credit report (the credit report should tell you how) and then applying for credit a couple of weeks later. The note will only last for 90 days before it disappears off your credit report but it may suffice to get your first card. Even so, it may remain on your record for the 7 years as unpaid or late debt.

Also, don’t believe that that bad reports, discrepancies fall off your credit report. I’ve had an unpaid bill (not mine) on my report for over 12 years. When I make major financial moves where my credit report may be pulled, I put in a explanation – “This bill is not mine, this person (different name) is not me, etc”. The reason, so I have been told, is that each time the bill is sold to another collector – it becomes a ‘new’ bill :-(. However, it is a cheap bill and the remainder of my record is absolutely stellar.

Since the longer your credit record, the more ‘value’ it has for you, I would try to get a credit card that I would not want to get rid of in the future (i.e. preferably not a secured card). Saying that, I would recommend to Jenna that she not even bother with a credit card until she gets out of college and has a full-time job that requires one. How much does a freshman need a car at college anyway? Start learning to handle money first. And if you’re worried about debt – getting a credit card is the quickest way to get into debt.

Student loans will start to build up a credit history, as will a personal/signature loan at a bank — perticularly if you ask if you can take out a small, short-term CD at that bank/credit union and ask if you can use that as collateral.

By: mando

mando — Thu, 25 Sep 2008 07:16:34 +0000

I don’t think it’s good to leave your card unused for more than a 6 month period. Credit card companies do not report anything to the credit bureaus if they don’t see any activity during the 6 month time frame. So, make a small purchase and pay it off during the month so that it shows that the account is active and it gets reported to the credit bureaus.

By: Anonymous

Anonymous — Thu, 25 Sep 2008 06:20:30 +0000

gr8whyte, I hope you’re joking. Mass mailings should be shredded.

By: gr8whyte

gr8whyte — Thu, 25 Sep 2008 06:00:42 +0000

Returned an unfilled and unsigned prescreened CC offer once and Chase sent me a CC. Called them up and were they embarrassed! My inner criminal has sometimes wondered what my liability would have been had I not called them but had gone ahead and used it.

Go ahead and try it. Simply write “No, thank you” on prescreened offers, send them in unfilled and unsigned and see how many CCs you end up with.

By: Val

Val — Thu, 25 Sep 2008 04:06:41 +0000

Can you have credit as a minor?

I requested one of my credit reports after I was denied a college student credit card from Citibank. It noted that I owed over $300 to some medical clinic, but that was in 2004 when I was only 14. Could you be billed like that as a minor and is it supposed to be on my credit report? Isn’t it supposed to be on one of my parents? Also, if I pay it (which I guess I will have to) would it remain as a bad mark on my credit report for a long time?

Argh, already have a crappy credit history and I just turned 18!

By: kk

kk — Thu, 25 Sep 2008 00:36:20 +0000

I got a real good trick to build credit history, but it costs some money. You need to have a credit history before you can do this, so first get some credit card somewhere and use it for two / three months. Then go to your mom/dad/someone you can trust and give them your spare cash (couple of hundred/thousand will do). Both of you open an account at prosper.com and you start a 0% loan request and your trustworthy person puts your money in it. You will have to pay a fee (amount depends on your current credit score) for it, but you get $50 back if the borrower signs up through the lenders invitation. Set it up for automatic withdrawal and you have a 0.5 to 1.5% 3 year loan that will build your credit history. Each month your monthly fee is deducted and can be booked back from prosper to the account your trustworthy person set up for ACH. Total cost, about $25 a year. And it builds credit history extra fast, because the points you get for a multi year loan are different then the ones you get for a credit card.

By: joel

joel — Thu, 25 Sep 2008 00:03:36 +0000

Pay cash. Then your FICO score means squat. Your insurance rates will be higher in some cases, but that still cheaper than paying 7% on a car note AND 20% on a credit card AND 5% on a student loan AND ..the list goes on.
This society is a society of instant gratification and it’s getting worse with each generation.
If you have to borrow money to buy it, you can’t afford it.