How to build Credit the right way?

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This topic contains 10 replies, has 6 voices, and was last updated by  Anonymous 8 years ago.

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  • #210125

    Anonymous

    I’ll be 18 soon and hoping to apply for a credit card. What are some tips that you can give me so that i want make no mistakes, and that i can build credit the right way?

  • #279623

    Anonymous

    Advice:
    1. Don’t spend beyond your ability to pay.
    2. Borrow when you purchase big assets like a car or a home so that you can reasonably spread the cost out over the years that you use the asset.
    3. Pay your bills on time.
    4. Pay off the people who charge late fees or high interest rates well before their due date.
    5. Don’t live your life managing your credit score, life your life having fun….
    6. Pay off loans starting with the highest interest rates first.
    7. If you can borrow at a low rate to invest at a high return, do it.

    P.S. Since the mortgage interest on a home is tax deductible, definitely have a mortgage loan in your portfolio.

  • #286519

    Anonymous

    Don’t spend beyond your ability to pay.

    Pay ALL your bills on-time or ahead of time.

    Get a loan for about $1,000. AND PAY THE LOAN on-time or ahead of time.

    IF you get into trouble losing your job or getting laid-off, THE FIRST thing to do is to call the folks you owe the money to AND tell them what’s going on. DON’T “put your head in the sand” and hope the folks you owe money to will leave you alone and go away. It NEVER happens that way.

    Thanks for asking your Q! I enjoyed answering it!

    VTY,
    Ron Berue
    Yes, that is my real last name!

  • #286591

    Anonymous

    get a secured card. you give them $500… then you use the card up to that amount. if you can’t pay, they keep your money.

    you can build credit this way. avoid the “normal” credit card and all the lies that go with it.

    don’t borrow money, save like crazy, pay cash for things, or do without.

    follow the baby steps at daveramsey (dot com)

    had I done this at 18, I would have so much money in the bank…

  • #289504

    To build good credit you must understand how credit scores are made up.

    They are based on the following factors;

    1. Pay history 35%
    2. Time in bureau 15%
    3. Types of credit 10%
    4. New credit 10%
    5. Debt to credit ratio 30%

    Notice there is no mention of how many credit cards you have, debt to income or available credit you have, that’s because they have nothing to do with your score.

    They may make a difference to a lender based on their guidlines but they have no affect on your actual score.

    Now, for the very best score and profile you will need 3 credit card accounts (revolving) with balances below 30% of your credit limit and 2 cars, boats, homes, furniture or personal accounts (installment) all with good long pay history’s.

    Start out with a couple of credit cards, use them for every day things, never exceed 30% of your credit limit in any given month and pay in full before the due date.

    After about 12-months of doing this you can start on your installment credit.

    Great credit takes years to establish (minimum 24-months) and only a couple of months to trash.

  • #324441

    Anonymous

    Here is something I did, but I can’t remember quite it happened.
    I always print out my reports and file them. (6 months ago).
    One day, I went to the Experian (I think) site, and typed my confirmation number.
    Low and behold, I could still see my newly updated report.
    Now, I can’t remember wich agency it was – try them all.
    You need all your confirmation numbers from all 3 agencies.
    Try them all.

    Scores are never free.
    Besides scores are somewhat useless. FHA loans doesn’t even use them. They look at your reports in detail and make their own decisions.
    Make sure you never worship a fico, worship perfect reports.
    /

  • #445585

    Anonymous

    Here is something I did, but I can’t remember quite it happened.
    I always print out my reports and file them. (6 months ago).
    One day, I went to the Experian (I think) site, and typed my confirmation number.
    Low and behold, I could still see my newly updated report.
    Now, I can’t remember wich agency it was – try them all.
    You need all your confirmation numbers from all 3 agencies.
    Try them all.

    Scores are never free.
    Besides scores are somewhat useless. FHA loans doesn’t even use them. They look at your reports in detail and make their own decisions.
    Make sure you never worship a fico, worship perfect reports.
    /

  • #324442

    Anonymous

    Annualcreditreport is the only free site. Fees for obtaining you credit reports and scores are set by state law. Contact the credit bureaus directly. That would be the cheapest way.

  • #445586

    Anonymous

    Annualcreditreport is the only free site. Fees for obtaining you credit reports and scores are set by state law. Contact the credit bureaus directly. That would be the cheapest way.

  • #324443

    Anonymous

    If you were recently denied credit you can request a copy of your credit report free directly from the three credit reporting agencies.

  • #445587

    Anonymous

    If you were recently denied credit you can request a copy of your credit report free directly from the three credit reporting agencies.

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