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establishing credit?
    #6567338 -

So I've always hated credit cards, don't really even want one, and don't have any credit, but I'm trying to buy my own house in another year or so. I hear different things from everyone about the best way to establish credit so I can get a mortgage.

All this crap is totally new to me and I've never been good with this stuff. I have a steady job and spend cash wisely, but I know credit is a total scam.

So what works? What's the best way to get me the hell outta here and get my own place? Gas Card, Credit Card, Bank Loan? Pay it right off or pay the minimum.....?:confused:

Thanks

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Re: establishing credit? [Re: udontknowme]
    #6567356 -

udontknowme said:
Pay it right off or pay the minimum.....?:confused:

Thanks


Pay it right off!  Never pay interest on a credit card.  Minimum payments are for people who either don't give a shit about their credit or who are already saddled with debt.


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Welcome evermore to gods and men is the self-helping man.  For him all doors are flung wide: him all tongues greet, all honors crown, all eyes follow with desire.  Our love goes out to him and embraces him, because he did not need it.

~ R.W. Emerson, "Self-Reliance"

:heartpump:

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Re: establishing credit? [Re: udontknowme]
    #6567364 -

I only have a credit card to build credit. It only helps if you use it once in awhile though.

any bills help.
phone
car insurance
etc.

steady job that you can prove (not under the table)

I've heard that missing payments can actually boost your credit score... I don't know if it true and I still wouldn't miss one.


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Re: establishing credit? [Re: CosmicFool]
    #6567409 -

I too hate credit cards. However I have online banking so I use it at the store then when I get home I immediately pay it off. I think I have only ever paid $.20 worth of interest ever.


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"The universe is the way it is because if it wasn't we wouldn't be here to talk about it"

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Re: establishing credit? [Re: udontknowme]
    #6567416 -

Always pay as much as you can afford. Interest will eat your money up in the end, and if you have a large amount on the card, the minimum payment is only covering interest and barely knocking down the actual balance. In essence you're trapped when you get to that point, because you're not actually getting out fo debt, just paying money to stay in debt, without lowering the amount you owe. With a house mortgage, paying more than the minimum payments can save insane amounts of money in the long run... same with CC's.

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Re: establishing credit? [Re: udontknowme]
    #6567420 -

Paying a credit card off in full every month actually HURTS your credit score, doesn't help it. if you're establishing new credit, get yourself a credit card, and keep the balance at a little less than 1/2 the limit on the card. If you pay it all off in full, they detract points based on the fact that you aren't "utilizing your revolving credit". Also, almost all lenders require that you have 3 open/active tradelines (accounts on your credit report) for a MINIMUM of 1 year, sometimes 2, before you can be approved for a traditional mortgage. If you have any questions, feel free to PM me.


--------------------
Remember, remember the fifth of November
The gunpowder treason and plot.
I see no reason why gunpowder treason
Should ever be forgot.


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Re: establishing credit? [Re: Liz]
    #6567463 -

Question one: Are you sure that it HURTS the score and not just makes it neutral to pay off the card in full every time will make me end up with a crappy credit score? That don't make sense... So you get credit points raised, you need to keep a balance on the account and always make payments on time, but never pay it off completely?

Liz replied:The rule of thumb is to keep some balance. If you have 3 open credit cards and NO balance on any of them, it equates to having no credit, which hurts your score. If you don't utilize the credit you have available, they detract points. That being said, if you had a car loan or something else that you paid on time monthly, your score would probably still be decent, but if ALL of your credit was in the form of revolving accounts (credit cards) and you paid them in full every month, it would not look good.


Hmm, it's kind of contractive that paying off your debt makes you look bad instead of good. I guess the banks want to make money, so they don't like quick paying debt free people. Which is crazy if you think about it.

I myself have No credit cards, and no credit history. Do you recommend getting a low balance card, charging stuff like gas and food on it, and paying all but $20 of the balance monthly? How exactly are you supposed to manipulate the system to get the highest score possible? Your input is appreciated :cool:

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Re: establishing credit? [Re: SirTokesALittle]
    #6567529 -

Srart by gettin a dept store credit card, and making sure that you don't miss any payments...they are the easiest to get.


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"Life has never been weird enough for my liking"

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Re: establishing credit? [Re: Rono]
    #6567561 -

The only reason I don't have any CC's already is because I don't want to get in financial trouble. However, there comes a time to start thinking about the long effects of not having a credit score. I'd tend to think that having No credit is worse than Bad credit, so I'm weighing out the options and possibilities before I jump into the plastic money without the right plan and course of action. I have several friends in some serious debt, and I saw how easy it was for them to get there and I am determined not to let that happen to me.

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Re: establishing credit? [Re: SirTokesALittle]
    #6567580 -

I agree. I don't even have a debit card... I figured it would be to easy to use. I eventually got a CCard to build credit. It sounds like you're smart enough and know better than to spend more than you can afford.


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Re: establishing credit? [Re: CosmicFool]
    #6567853 -

Quote:
Paying a credit card off in full every month actually HURTS your credit score, doesn't help it. if you're establishing new credit, get yourself a credit card, and keep the balance at a little less than 1/2 the limit on the card. If you pay it all off in full, they detract points based on the fact that you aren't "utilizing your revolving credit".


Yea, see this is why I'm glad I asked because I've heard this also, it makes sense. It shows that you know how to "use" your credit.


Quote:
Srart by gettin a dept store credit card, and making sure that you don't miss any payments...they are the easiest to get.


And that'll help me get in with a major CC company after a little while I suppose. :thumbup:


Quote:
The only reason I don't have any CC's already is because I don't want to get in financial trouble. However, there comes a time to start thinking about the long effects of not having a credit score. I'd tend to think that having No credit is worse than Bad credit, so I'm weighing out the options and possibilities before I jump into the plastic money without the right plan and course of action. I have several friends in some serious debt, and I saw how easy it was for them to get there and I am determined not to let that happen to me.



Exactly.

Thanks for the replies!:mushroom2:

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Re: establishing credit? [Re: udontknowme]
    #6567873 -

Capital One also has a credit card for people with little to no credit that you may be able to apply for.  You can apply on their website.  Jewelry stores cards are also very easy to get approved for.  Also, try to take out a small personal loan from a bank or something, or a small car loan....there are 2 kins of debt, revolving and installment - credit cards are revolving and all other kinds are installment basically (other than mortgages, those are separate).  Having both kinds will look good.  The main things is to never be 30 days late, never go over your credit limit, and don't keep your balance too high, or too low.  Gotta love the credit bureaus, it's like they LOOK for ways to fuck you over :frown:


--------------------
Remember, remember the fifth of November
The gunpowder treason and plot.
I see no reason why gunpowder treason
Should ever be forgot.


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Re: establishing credit? [Re: udontknowme]
    #6567874 -

Quote:
How exactly are you supposed to manipulate the system to get the highest score possible?


http://money.howstuffworks.com/credit-score1.htm

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Re: establishing credit? [Re: udontknowme]
    #6567906 -

Cool, so having like 2 open/active tradelines (CC's) and like $1000 bank loan for, say, a new computer for atleast the next year should help me get a decent mortgage?

Gonna check out Capital One right now, thanks  :cool:

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