Thread: Building up credit
July 13th, 2004, 03:23 PM #1
Building up credit
Well, today it came; an envelope from a credit card company telling me I've been declined because of insufficient credit file. So how does one get the first credit card????
July 13th, 2004, 03:31 PM #2
You will need a co-signer. Usually your parents. You'll work your way up there.
I've got great credit. On my sprint phone I don't have a limit, neither on my AE card, on my Kohls I only have $1200 worth of credit.
Just make sure you pay your payments on time. You can also take out a bill under your name like the water, electricity or you phone.
July 13th, 2004, 03:39 PM #3
You could also check into getting a secured credit card. Most of them change into a regular credit card after around 18 months of timely payments.
July 13th, 2004, 03:41 PM #4
July 13th, 2004, 03:46 PM #5
When I heard, "You're gonna need a co-signer" .. I always thought, 'No Way!' ... I mean, come on. You're a legal adult and you really shouldn't need mommy and/or daddy holding your hand anymore. I was disgusted at the idea... So I went into my local credit union and asked them what my options were. They started me out low and it really didn't take that long before I had a great card with a pretty good interest rate. It also opened the doors to financing and leasing options for larger purchases.
Go talk to someone who knows their credit.
July 13th, 2004, 03:57 PM #6
Getting it thru your parents is probably the easiest and most hassle-free way. Mine is like that but I hardly use it for more than anything but gas. You can always get a checking card, but you gotta go to the bank and open a checking account, plus you need to constantly put money into the account if you're a big spender.
July 13th, 2004, 04:04 PM #7Originally Posted by gjimene2
July 13th, 2004, 04:23 PM #8
Yea, reason being are the benefits of it. There are alot of online shops that I buy for that my credit card picks up the shipping. Alone throughout the year the shipping and handling of my purchases are far greater than the 35 per year. There is also no interest rates what so ever. So if I spend $700, I will pay $700 and no more.
There is also nothing wrong with your parent's co-signing. Unless you really are unreliable and will royally screw up.
July 13th, 2004, 04:28 PM #9
- Join Date
- Oct 2001
- Tulsa, OK
I went to the bank and explained that I was wanting to buid a credit history. I had my parents co-sign on a $500 loan. I left the $500 in a savings account in the same bank for a year. I think the interest came out to an extra $50. After that year I had credit card companies banging down my door.
Having a cell phone in your name and making the payments EVERY month also helps a lot.
I did these things when I was 18. I just turned 23 and was able to get a $100,000+ loan to buy a house.
My best advise to you is find a bank that give you a Visa check card. Use that instead of a credit card. They are nothing but trouble.
July 13th, 2004, 04:43 PM #10Originally Posted by gjimene2
July 13th, 2004, 05:25 PM #11
I pay mine in full every month. One of the main reasons why I like AE is because I have no limit on my gold card, plus the fress shipping on alot of the stores that I use it on for my clients. I wish that newegg was one of them, that would of been great.
Also they had a thing were you could make private payments. It would generate a one time use card number and you would use it to make a one time payment without fearing that your card will be stolen.
Visa also has the same as AE, and they even also charge $35 a year.
July 13th, 2004, 07:25 PM #12
You need credit. The country works on credit. First you get what you can. Then you play the credit game to get a higher limit. Then you are able to buy a new car and home. Then you are model citizen!
This is the game:
1) Get your first credit card through your bank or credit union as a secured card.
2) Make monthly purchases: gasoline, groceries, movie tickets, school registration.
3) Pay your credit on time. Pay your credit on time. Pay your credit on time. A minimum payment on time is better than a huge payment late.
4) After a few months, you are ready to bump your credit. Your are ready to get them to GIVE you a second credit card.
5) If the time and situation are ripe, take a small airline trip and pay for it with your credit card. Flying is a good way to get extended credit.
6) After the few months, go to a major retailer that issues Mastercard or Visa. Make a good purchase ($200-300) and ask for a credit application. It's OK if you are rejected.
7) If you are rejected, immediately make that purchase with your secured card.
8) Within two-three weeks you will be extended credit from that store that rejected you. Why? Because you have credit. You used another credit card. Someone else made the credit fees. There is a 2-3% the merchant gets charged from the credit card company.
9) If you need your limit raised: Say you have a $500 card and a $300 card. You are prepared to make a $400 purchase. First try to pay with the $300 card. You will be rejected. Then you pay with the $500 card. The $300 guy will raise your limit. Why? Again, another company made the fees!
July 13th, 2004, 08:27 PM #13
- Join Date
- Jun 2002
- Blog Entries
Advise from a credit abuser, yeah that'd be me
NEVER think of your credit card as free money. You need to have the right mindset to have a credit card and have it work for YOU. I got into big credit problems and have been spending the last 5 years digging myself out. Not only do I have bad credit, but I owe way more than I spent using my cards. I've been paying for 6 years on a Refridgerator, and 7 years on windows I'll never look through again.
MAKE YOUR PAYMENTS ON TIME, AND DON'T JUST PAY THE MINIMUM. That's where they get you..minimum payments. Minimum payments are only there if you are short on cash, so you can keep your payment history in good standing. If you aren't paying your balances off in full, you need to at least double your minimum payments if you want to pay off anything you've purchased with your card.
Another thing to remember, if your credit limit gets maxxed out, get some money and start throwing it at that balance. Not only will they get you for late fees, but they'll add Over the limit fees, and then it really starts to add up. I've got a $350 limit card I'm paying off which has a current balance of $2000. Yeah, that'd be THOUSAND. I only spent the limit, the rest are fees and penalties.
One last thing. The moment you feel you are losing control of the card, call the company and work out an arrangement, or at least talk to someone that knows how credit works, like your banker or a friend in finance.
July 13th, 2004, 08:38 PM #14
With most credit card companies if you owe alot and been paying on it for a long time they will consider pennies on a dollar pay off . Something like if you owe 2,000 and you've been paying the intrest and such for a period of time they will somtimes settle for like 1,000 0r even 750 to pay it off.
If you do get a credit card in your own name and you want good credit just charge enough on it that you know you will be able to pay when the bill comes.
Just my 1/2 cents worth(no interest will be charged at this time)
July 13th, 2004, 08:55 PM #15
You know what I do? I don't buy it unless the money is in cash with me or in the bank.
As for Kohls. I use it as a discount card. Buy, get the extra 15% off, then pay off the balance on the spot.
July 13th, 2004, 09:42 PM #16
I'm not suggesting abusing credit. Just how to get the credit and bump limits. This way, when he's ready to purchase a new car or house, he has very good established credit.
I use credit cards to protect my consumer rights!
July 13th, 2004, 11:36 PM #17
- Join Date
- Jun 2002
- Blog Entries
And there's nothing wrong with that Ray. I say, use the system, don't let it use you.....but you need to be knowledgeable about credit if you want to take that bull by the horns.
I'm sure this is the last thing you really want to hear at the moment, but having a good savings plan along with your credit plans will really help you out in the long run, especially if you get into a jam.
I've got a goal savings account I can only draw on 2x a month without penalty, and no one else has access to it but me ( not even the wife ). Since I don't play the financial game around here ( wonder why, huh? ), that money doesn't get touched unless I authorize it. It's saved us once already, and we need to tap into it again for a purchase that came at a bad time, but needed to be purchased.
If you have a small savings account going for a while, show that you are dumping money in often, that will help your credit score also. I throw $60 a week into mine. I don't miss the money, and if I never touch it, well, you can do the math if you'd like.
July 14th, 2004, 04:20 AM #18
Like a lot of others, divorce caused me to go bankrupt. So I had to go throught the whole process again starting from scratch.
I can be as frugal as anyone you have ever met. If I can't afford it...
July 14th, 2004, 11:27 AM #19
I got my first credit card when I turned 16, for emergencies, which was co-signed by my father. It was a small card with a $500 limit. I used this card A LOT, but I always paid it in full and on time. Truthfully, your credit will not be hurt if you can not make the full payments as long as you pay it on time. Eventually my credit limit started going up, I swapped to a different card, and I kept playing the game. Last year, when I started renting an apartment, there were no problems in securing the apartment becuase of my credit. So now, at 21, I have built myself up to a gold card with a $10K limit and a platinum card with $20k limit (I will never come anywhere close to spending that much). I only use one of the cards but keep the other in my wallet just in case. Only use a CC if you can pay it off in full! Personally, I don't even look at interest rates becuase I don't plan on needing to "borrow" the money and buy accordingly. Just use common sense and you'll be fine.
P.S. Too many credit cards can actually hurt your credit. I am notorious for going into a store and getting their CC for the 10% discount. That is fine to do, but cancel them afterwards!
July 14th, 2004, 11:35 AM #20
RayH - so after you went bankrupt, how long did it take you to get back on your feet? How long before you were able to have credit again?
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