Building my credit score...need advice.

[santucci218]

May i first refer back to this thread of mine..

Seeking honest advice (big post content)

Anyways, after overcoming adversity, i managed to get all of those bills paid off! Total amounted to $3,000+ dollars. Now, dont get me wrong, it isnt a lot in the grand scheme of things, but for my job and life, it took a LOT of work and cutting back of things i did want to get, like a car!

Well, i used to not get approved for SERIOUS DELIQUENCIES WITH OTHERS, as most places stated i had, which was true. As being so genuine in dealing with the hospital and one of its managers, she was kind enough to get them removed from my credit score via going through the collection agencies that had my accounts. Go that lady. Anyways, now i am not getting approved for credit cards based on the fact that the age of my credit is too young, and i just plain have no credit at all.

I know many a friends whom have tons of credit cards and what the do is only buy things they already have the money for with the card, then proceed to instantly pay it off before the interest hits. Seems legit for buinding credit, yeah? I have read just about all there is to read for picking a good first credit card, but to some point, i overextend myself. There are so many small notes on these banks websites, that i can not even begin to tackle understanding all the fine print.

What i ask from you guys is some suggestions as to where i can start with this stuff. What is a good first card. What am i to expect from them, and what is the best way to get my credit going so i can eventually have good credit. I need to take out a loan for a used car somewhere down the path of life, and i am quite sure i will not get approved in my current state.

And if it makes any difference, as lame as it is to say, NOBODY in my family has good credit, so i dont have much a chance having somebody co-sign with me.

One last random question...when i fill out these forms that they give me for applying, should i be stretching the truth as to what i make and all that stuff, or should i just straight tell them i make less than $10,000 a year?


Thank you much, Paul.

[Bob Clayton]

First Premier Bank.

My credit isn't so great, but I got a card with them with a $400 limit. There were a bunch of start up fees and an annual fee so my starting credit wasn't that much, but the minimum payment was around $25. After you pay that off you're golden to make purchases up to your limit.

[santucci218]

bleh, i was trying to avoid startup and annual fees.

[TrooperFarva]

Originally Posted by santucci218

I know many a friends whom have tons of credit cards and what the do is only buy things they already have the money for with the card, then proceed to instantly pay it off before the interest hits. Seems legit for buinding credit, yeah?

Yes, that is, IMO, the best reasonable way to improve your credit. I don't know your situation, but if you could find a job that requires use of a credit card for travel, your credit score will improve really fast.

When I graduated college, I worked a job that required a lot of domestic travel and just general work on site, instead of the office. I was given a company credit card. It was an American Express, in my name, backed by my company. Over the course of the 2 and a half years I was with that company, I charged about $85,000 worth of expenses to that card. Each month, the card was paid off, it never carried a balance. 2 years ago, when I was 25, my credit score was 810, almost entirely because of that corporate card. Now, after flipping a house, my score is 850.

One easy way to go about it is once you have a card, use it for regular purchases, like gas. Simply having a credit card will improve your credit score, but not as much as regularly exercising it.

Some people hate credit cards, and blame them for getting in debt. That's just ridiculous, IMO. A credit card is just a tool, and like any tool, when it's used improperly, there are negative results. Good for you for taking a reasonable approach.

[chicago_mike]

careful because some cards "ding" you for paying on time and all of it at once. Ding your report, not add extra fees.

[tycobb73]

The best way is to have someone who is responsible with their bills put your name on their account. They don't have to give yo ua card and you never have to make payments. But now the card and payment history will show up on both of your credit records. But credit cards are not a good thing. Don't bother with them.

You don't want to lie about your income. If you do they will give you more credit that you may use and not be able to pay back.

[standupright]

Originally Posted by tycobb73

The best way is to have someone who is responsible with their bills put your name on their account. They don't have to give yo ua card and you never have to make payments. But now the card and payment history will show up on both of your credit records. But credit cards are not a good thing. Don't bother with them.

You don't want to lie about your income. If you do they will give you more credit that you may use and not be able to pay back.

nothing wrong with credit cards as long as you are responsible with them. i've had mine for 10 years or so. the only time i have ever carried a blance is when i opened a new line of credit with home depot to pay for my new kitchen.

OP - open a bank account. get your name on things that report to the credit bureaus. try to see if you can get a credit card with a low limit. my first credit card had a $500 limit. buy only with that card what you can pay off in total by the end of the month. it takes time to build / rebuild your credit. sometimes having to go with a secured credit card may be your only option.

[Bob Lee (QSC)]

Try getting a store credit card, like Target or Kohl's or Macys or Guitar Center, that doesn't have an annual fee. Wait a few months--make some needed purchases if you wish but pay them off--and then get another. If you hold a few of them for a while it should get easier to get regular credit cards.

[santucci218]

darn guitar center wont approve me or ide have a mesa amp sitting beside me.

As for some of you, i thank you for the suggestions, but refer you back to the OP to re-read. I havent means of using a card for travel. I also have nobody able or willing to sign with me.

I did apply recently at Walmart for a card, and at Musiciansfriend, and they both stated my credits age and no real transactions. The only credit line from a company i have been approved for was with Dell, and i pay that off every month on timem, but it seems it doesnt help quite enough.

One of you stated that some cards ''ding'' you if you pay the full amount on time. I want to stay away from that, as it seems rather self defeating for what i want done.

I guess what would help most is somebody linking me to a card that i can apply for, with previous experience of how the card operates and fits my criteria.

[Solarmist]

Paul - this probably won't help, but I didn't have any credit either, and started using a pre-paid Visa card. After about a year and a half I started getting credit card offers in the mail constantly - I'm not sure, but I'm kind of thinking the records from the pre-paid card bumped my credit score enough to qualify. No fee's either.

[Pilgrim]

Look at cash-secured cards. These are cards that only extend credit up to the limit of funds you have on deposit, so there is no risk to the lender. Using them for a while and paying off promptly can build up a track record that helps.

[Johnny Crab]

+1 to the above.
You should also consider a Target card as they gave my son one just out of high school on his way to college. The "in-store" one with a low credit amount and then use it/pay it ASAP.

Consider reading Mary Hunt's stuff(http://www.debtproofliving.com/) and the other "gurus". Also consider, if you can afford it($30/month I think), a credit monitoring service such as Identity Guard( http://www.identityguard.com/ ) that allows access to scores either realtime or quaterly depending on your plan. They come with "credit evaluator" functions that let you run scenarios to see what impact(s) different actions have on your score.

Finally, seriously consider MINIMAL use of credit as ALL lenders of money(esp. credit cards) are/have-recently began charging usury rates(financial rape IMO) of customers. Credit scores(FICO) may become meaningless IF the looting of the world monetary systems continues(http://market-ticker.org/archives/17...s-Box.....html).

JC

[your idol]

i will tell you as a dude whos jumped over 250 points in 2 1/2 years how

AVOID STORE CARDS! if it dosent have a Visa/MC/AMEX label let it be. revolving credit cards have high APR and can only be used in that store (that means no GC card) if you need something to start get a Household bank platinum card. its lower intrest, higher limit and much better APR. keep ALL BALANCES of under 35% of the main limit of the card.

GET A CREDIT UNION- they take good chances on guys like you n me. you can typically borrow for just about anything under $5,000 within six months of just keeping a a checking/savings account in good standing. take out a personal loan for like a grand or two and pay off a few of those glaring negative marks on your credit and set up that loan to be paid off within 2 years. if you make offers to settle your outstanding debts youll find most of them will take considerably less and call you paid in full and the credit wounds can start to heal plus paying off personal loans are a HUGE bump to your credit score so that'll kill 2 birds with one stone. if you pay the loan off early with a CU they actually like it and with a generally very low APR its a big win for you. then repeat the process.

get a monthly credit report like freecreditreport.com
its like $14 bucks a month and you can actually constantly see your score and how things ae impacting your credit and what needs paid off and who youre in good standing with. i did this and i found stuff i had NO IDEA i had still active on my credit report that was tying up my credit to debt ratio...like cards i got approved for at Pens games and old jewelry stores...if the credit companies say you have $25000 credit available and you got a couple grand tied up in "reserved" status by cards and stuff you didnt know you had that still shows as money someone else cant lend you because that piece of your credit pie is reserved by a phantom account..CLOSE IT!

PAY EVERYTHING ON TIME FROM HERE ON OUT- whatever you pay regulrly pay on time. to ensure you dont get caught slippin set the important ones up on an auto pay through your credit union...you will find its easier than it sounds and there are things like auto insurance and car loans and such that give you discounts for setting up auto pay and going paperless. more money in your pocket baby! isnt what this is all about.


my unorthidox approach method- i dont make this suggestion unless youre confident in what youre doing...consider this my disclaimer!!! when i got caught up with things where my Credit Union REALLY trusted me. i would buy a vehicle in the summer (like a tahoe/yukon) for dirt cheap on craigslist for 3 grand or so and drive it all summer by taking a loan out with my CU. come winter when the demand went up id flip it,make a grand off something I USED FOR SIX MONTHS and make and extra grand on it. id be paying off $3000 in personal loan 1 1/2 years early. which looked great to my credit that i payed off a personal loan..then that day id take out another personal loan for $4000 and buy a used Caddy or Bmw and drive it all winter put a coat of wax on it and flip it to some rich kid in the summer. drove a nice car, got paid EXTRA to do it and paid off ANOTHER personal loan...you followin me camera guy.

i went from a dude driving a POS with with a 526 credit score buried with nowhere to turn to a guy with a 770ish score a brand new hemi dodge ram and 3 beautiful basses.

this is what worked for me..take what works for you and use it. i hope all works out for you. i know some are gonna flame my advice but the proof is all around me.

[anyonefortennis]

Pay everything on time.

I have a credit monitoring service for free cause my mortgage company got my personal info stolen (countrywide!).

The contributing factors the list for good credit are (among others):
2 major Cards paid on time (Amex, Visa, MC, Discover)
Low balances compared to credit limit (keep it below 60%)
No credit inquires in 12mo (your inquires of your own credit do not count, but anywhere you apply for credit, whether approved or denied will count)
No late payments
No collection accounts
Bank accounts that are 2 years old or older
no new recent accounts

Scoring good in all these go my score > 770 which is 70 percentile or so.

[santucci218]

i have like 20 inquires in the past 12 months =\

[Roy Vogt]

I got rid of every credit card I had and use Visa check cards. Dave Ramsey changed my life in this regard. I highly recommend him.
A few things I've discovered over a long time of working, buying gear, cars, houses, etc.
A car will lose 40-60% of it's value in the first 4 years. I buy used-the last one was a really clean Honda Odyssey (I had to have a van because of my upright bass) with A/C, CD, power everything that was 3 years old and just coming off a lease. It was literally 40% of a new one.
Craigslist, Ebay, et. al. are a good source of new (to you) gear. Basses and amps also depreciate incredibly when they first leave the music store. Victor Wooten picked up my 1992 Carvin LB-76 and sounded like-Victor Wooten. Gear's important, but you can't hardware yourself out of a musical rut or into a better musical situation as well as by practicing (which, BTW, is free in that it only costs time)
Pay on time-your credit report is based on debt/income ratios, payment history (paying on time is best, of course). Keep really minimal debt if possible.
Since I've moved to cash only when possible I'm a whole lot happier and less stressed.
2 books that have helped me:
Financial Peace by Dave Ramsey
How to Get Out of Debt, Stay Out of Debt, and Live Prosperously by Jerrold Mundis

[Roy Vogt]

Just read your previous thread-Man, you've been through some rough stuff. Take care of yourself first! Your other family members (including your Mom) have made their own mistakes but you don't need to take care of them-they are all adults.
The most common form of identity theft is from relatives (parents, kids, exes, etc.)
Sorry you were let down like that-Sheeesh!
The positive news is that you're really young. If you manage your money you could easily retire a millionaire.
The Dave Ramsey books are great for this, so is:
The Millionaire Next Door
Most public libraries will have these books.
Also, Dave is at www.daveramsey.com
Good Luck and God Bless!

[bigfatbass]

To sum up a mountain of good advice, and an even bigger mountain of complete palaver into the two things that actually matter:

Store cards are indeed worthless for building credit rating.

Find yourself a local Credit Union.


When you have your regular paycheck coming in, union job with your bro or elsewhere, go find a local credit union, and tell them the complete truth of your situation and what you are trying to accomplish.

You will be pleasantly surprised. Really.

[Bob Lee (QSC)]

Originally Posted by your idol

AVOID STORE CARDS! if it dosent have a Visa/MC/AMEX label let it be. revolving credit cards have high APR and can only be used in that store

There's nothing wrong with store cards. They're usually willing to work with pretty low limits, like $250 to $500, so they're usually much easier to qualify for than Visa, MasterCard, Discover, or AmEx. They will help build a history with the credit bureaus so he can get one of the big cards. They or any other cards with a high APR should never be used to carry a balance.

[bigfatbass]

You're right Bob, my point is that they are VERY low on the totem pole of what will help your rating. It would takes 5+ years to build your rating enough to qualify for a major CC.