Building Credit...

[little_grey_bantam]

I'm a college student & want to no any of your advice on building credit...
Someone told me to get a credit card (what brand?!) and purchase small amounts on it a month & pay it off... (I am capable of doing thing... probably spend $20 a month on stuff)
Also to get a loan for $$$ - let's say, have $500 in an account, get a $500 loan & go from there...

Any thing I need to watch out for? Anything I should be aware of? Anymore advice?

 

[Sparkalator]

Any credit card would work, do you have a favorite store you shop at that offers them, sometimes you can get discounts on your purchases when signing up for them. Or a gas card that offers you savings when filling up. As far as loans, if you have a credit union or local bank you already use then I would start there and just get a small personal loan.

 

[little_grey_bantam]

I have quite a bit in loans, so I'm scared to get a loan from there in case something goes wrong (inform me if I'm being worried for no reason lol)

I heard credit cards from small stores can pummel you with huge bills & whatnot.

I'll shop around

It'd be nice to get good credit

Thanx!

 

[halfwaynowhere]

Quote:
i only have one store card (kohls), but my minimum payments are only $7/month. Not bad. If I make a late payment, I do get hit with late fees, though. But that's pretty much standard with any credit card.

two things that really help (or hurt) your credit score is your available credit, and the average life of your open accounts. So you'll basically want to have a card with a high limit (available), open for several years. everytime you open a new card, or close an old one, you'll hurt the average life.

hard credit inquiries can also lower your score. everytime you apply for a credit card, or a loan, or anything you'll need your credit run for, will affect your score for 2 years. Soft credit inquiries, however, to check your own credit score, are perfectly fine, and you can run them as often as you'd like. Just avoid sites like freecreditreport.com, where they make you sign up for a credit protection service, and will charge you monthly for it. i use creditkarma.com, and they don't charge anything ever, your info is completely safe, you can check your credit as often as you'd like, and they have handy calculators that let you play around and see what things you can do to improve your credit score. Its become a bit of a game to me, to try to build my score.

 

[Rammy]

DO NOT under any circumstances get a credit card. They are evil. The only thing they do is build up debt. What credit means is your ability to pay debt. You should listen to Dave Ramsey and he would YELL at you not to get a credit card. There are better ways to build your credit and not go into debt. Please go to DaveRamsey.com and you can also listen to his webcasts free. DONT get a credit card. I have none. Took me YEARS to pay them off. Even if you pay the minimum on a card of around $1000.00 it would take you ten years to pay it off. Please research this before you do that.

Rammy

 

[chickened]

The only thing you should ever buy on credit is a home or maybe a car and not a BMW. Credit is a snare.

 

[EweSheep]

Then why banks always wanted you to have credit when you don't have credit cards when you want to make a loan? How would that help us?

I hated credit cards too and only have credit cards on emergency like Sears for furnance or CA if they do break down. Nice thing to have! Always paid it off too!

 

[booker81]

Paying bills on time, having a steady income, and paying utilities build your credit. Besides, if you save up the cash you'd pay out on credit and possibly interest, you can just go and BUY the things you want.

Another victim here of the credit card demons. No credit cards for 10 years now. Only an ex ruined my credit, but back to paying things back and ontime, and my credit is rising quickly again - without credit cards.

 

[True Grit]

I wrote the below before reading that you have quite a bit in loans. If that is the case the best thing you can do to build credit is make all your loan payments on time and pay them off!

The first thing is to have a bank account and a job. I wanted to buy a TV after I had a stable job for a bit so I went to Sears and told them I wanted the TV and I wanted a Sears card to establish credit. I think they gave me one with a $500 limit. As soon as I got the bill I paid it off. I bought a few other things and paid them off immediately. If you have the money set aside for the purchase and can pay it off that month there is no reason not to have a credit card. They will gradually increase your line but you don't need to use it. Then I got a Visa card and did the same thing, only bought stuff I could pay for. They gradually increased my line. Then I asked the bank for a car loan and made absolutely certain I made the loanpayments on time every month. It is easy to do if you bank online. Even if you have to pay the minimum on a card for a month,in an emergency, make your loan payments on time.Have a budget so you know what you can afford to pay. Always pay your bills on time. Don't get in the trap of paying the minimum on a card - only buy on a credit card what you can afford to pay for in that month. Otherwise save up for it. Then I got a mortgage and always made the payments on time. I have AAA credit.

 

[little_grey_bantam]

Well the reason why I point towards the credit card is because I'm using a debit card... I only spend $20-$50 a month on it, can't be too hard to pay it off. I really am a cheap little thing "green"

I can't get loans for a house without credit?
I figured since I'm living off loans right now - I have tried multiple times to have a job & go to school, with little success (have a low GPA/have money or a high GPA/live within my means - since the loans are for school, might as well go that route). So I'm just on loans right now. I wanna build credit right now since I worry over having no credit in the future.

I'll loo into that site

See what I can do.

I figured I will get a credit card, put $50 tops per month, pay it off ASAP all the time & do that for the next 2-3 years. I'll never use it for BIG expenses, because I'm just not that person (I currently sold the car, have no job, still have 2-3 years of school left, live on loans... watch little tv, food is from scratch, etc. I am REALLY a simple person lol my camera, food, & a roof over my head & the internet is all I need to get by).