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 mayfly
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Registered: 01/05/08
Posts: 706
Loc: planet home
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 credit history
#8275133 - 04/12/08 07:18 PM (5 months, 27 days ago) |
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How do you build up a credit history? I'm 18 and I have no credit record, good or bad.
I'm likely to be moving around from rental to rental for a few years longer at least, and I doubt I'll be sticking with the same job. When I applied for a credit card about 6 months ago, they told me I needed to either go to university (since students are automatically approved) or keep the same job for over 2 years. They also gave me another option that I think is ridiculous: I can give them $500, which they keep for 3 years. Throughout those 3 years, I have a $500 limit credit card, and if I'm late on a payment I would forfeit the entire amount. Then, after those 3 years, I have the option of applying for a normal $500 limit credit card, which I may or may not be approved for.
Is there an easier/different way?
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"The important thing to remember: if we ship all our fat-bottomed girls off to foreign countries, the terrorists win."
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 Evets
Stranger
Registered: 01/05/08
Posts: 137
Loc: Midwest
Last seen: 1 month, 21 days
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Re: credit history [Re: mayfly]
#8275141 - 04/12/08 07:21 PM (5 months, 27 days ago) |
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dont get a credit card, pay everything with cash, buy what you can afford, only take credit on something that can have equity. and never ever pay interest unless its on a house.
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Ythan
0011101111111110
Registered: 08/08/97
Posts: 11,102
Loc: Upstate NY
Last seen: 11 hours, 39 minutes
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Re: credit history [Re: mayfly]
#8275416 - 04/12/08 08:49 PM (5 months, 27 days ago) |
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I mostly agree with this:
Quote:
buy what you can afford, only take credit on something that can have equity. and never ever pay interest unless its on a house.
...but you ain't gonna be paying interest on no house if you don't have the credit history to get a mortgage. In fact, if you pay off your balance every month credit cards are great, you're essentially getting a free loan until your next statement date (except for the shady ones which start charging interest immediately, read the terms), plus you can earn up to 3% cash back with a rewards card like Chase Freedom. It's also nice to have a credit line you can fall back on in a dire emergency. But most people get a credit card and quickly go into debt buying all kinds of stupid shit. Just don't do that. It requires acting like an adult and exercising willpower. If you don't think you can handle that then Evets is probably right. Otherwise read on...
There are two quick and easy ways to establish a credit history. The first way is to get a secured card, as you mentioned. You send in a deposit, eg. $200, and that is your credit limit. If you use the card regularly and pay off your balance each month, you'll quickly establish a credit history. It definitely doesn't take three years before you'll get offers for unsecured credit, six months is more like it. As soon as you get approved for an unsecured card with better benefits, you can close the secured account and get your deposit back (or keep it open and in good standing, it'll give a small bump to your credit score). I got my first secured card from Orchard Bank but there are many options.
The second easy way to establish credit is to find someone who already has it and is very responsible and never misses a payment, eg. a trusted family member. Ask them to add you to their account. They don't even need to give you the card which comes in your name, and you never have to buy anything. You automatically get their credit history just by being tied to their card. If they've paid their bills on time for 10 years and have a $60,000 credit limit, then congratulations, you've just shaved years off the credit building process. Of course if they start missing payments your credit is going to get trashed right along with theirs, so be careful.
It doesn't take much history to get approved for credit, you just have to have some record of repayment. Follow either of the steps outlined above and you'll soon be inundated with more card offers than you know what to do with.
And seriously, stay out of debt. Do not make extravagent purchases with your newfound spending power, regardless of how easily you can justify it to yourself. Do not assume that you'll somehow scrape together the cash to make your payment. Don't count on luck, a raise, or extra overtime. Before ever reaching for your card you must have the cash on hand and stashed away somewhere so you will not be tempted to dip into it. Self-discipline is absolutely required; if it doesn't come naturally to you then you will have to put in extra effort but it gets easier over time. Good luck!
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 Visit the Growery!
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Veritas
Registered: 04/15/05
Posts: 9,772
Loc: PNW
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Re: credit history [Re: mayfly]
#8275634 - 04/12/08 10:07 PM (5 months, 26 days ago) |
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Well, at the risk of sounding old and stodgy, the reason why you cannot get credit is that you are a poor credit risk. If you plan to move from job to job, you may have unexpected gaps in your income which could lead to defaulting on your credit. Your intention may be to always pay off your debts, but your lifestyle may not support this intention.
I would strongly recommend waiting to establish credit until you are settled & prepared to stay at a job long enough to improve your credit rating. Until then, get a debit card with a Visa/Mastercard logo on it...you can use it just like a credit card, but the money comes out of your checking account immediately. Almost anything you would need a credit card for can be accomplished with this type of debit card, except piling up large amounts of high-interest consumer debt.
Take some advice from someone who had to learn this the hard way...protect your credit rating from YOURSELF! 
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If people stopped looking on their emotions as ethereal, almost inhuman processes, and realistically viewed them as being largely composed of perceptions, thoughts, evaluations, and internalized sentences, they would find it quite possible to work calmly and concertedly at changing them.
~Albert Ellis
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TODAY
Battletoad
Registered: 09/25/03
Posts: 7,110
Loc: Metropolis City, USA
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Re: credit history [Re: Veritas]
#8276180 - 04/13/08 12:31 AM (5 months, 26 days ago) |
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My advice:
Buy EVERYTHING on credit...but always make sure you have the cash to back it up...ie...pay your balance every month.
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ca'rouse (k-rouz)
intr.v.
To engage in boisterous, drunken merrymaking.
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badchad
Stranger
Registered: 03/02/05
Posts: 2,640
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Re: credit history [Re: TODAY]
#8279137 - 04/13/08 07:31 PM (5 months, 26 days ago) |
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I do what a lot of people here do: I put everything I possibly can on my card and pay it off in full each month. In doing so I get 1-3% back on all my purchases.
I end up cycling close to 3k a month after car payments, rent etc. get on there. I have awesome credit which will get me a nice mortgage in the next few years.
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downforpot
Registered: 06/25/01
Posts: 5,402
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Re: credit history [Re: badchad]
#8342678 - 04/29/08 04:40 PM (5 months, 10 days ago) |
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Yep. I put everything on credit cards. I had one for 2 years and it started out with a 5% cash back but now it's only 2-1%. I got two other cards, one is an amazon rebate card and another is a BP card that was 10% cash back at all BP locations but now it's 5%. I basically use only BP to fill up my car.
My credit score is 743 and my credit history is only 2 years.
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http://www.myspace.com/4th25
"And I don't care if he was handcuffed
Then shot in his head
All I know is dead bodies
Can't fuck with me again"
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meams
Stranger(s)
Registered: 01/11/05
Posts: 3,158
Loc: Nawfuck VA
Last seen: 3 hours, 56 minutes
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Ythan hit the nail on the head. I essentially did the same thing in high school. Put down $500 on a card, used it for a while, now my limit is up to $2,000 (not great, but not bad).
I pay my card in full every month. It takes a lot of disciplin but it's worth it.
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mandolin.
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