How do I build my credit?

[GoodOdor]

Several people have now advised me that I need to start "building" my credit. I have no idea what this means, so I could use some advice tbh.

Right now my only debt is my student loan, which I could pay off right now if I wanted. I got no credit card debt.

What do I need to do so in 4-5 years down the road when I probably want to buy a house, I would have good enough credit?

[mavs>spurs]

get a credit card and use it to make small purchases here and there, then pay them off before you accrue any interest

[Frenzy]

As for credit cards last I heard is have no more then 30% of the total credit limit in use. But it's good to have a small balance at all times. But that may have changed since they change it often on what builds good credit. Very grey area imo.

[GoodOdor]

get a credit card and use it to make small purchases here and there, then pay them off before you accrue any interest

That's what I do right now pretty much. However, people keep telling me I need to get another credit card and do the same with it. How does that make sense tbh.

[mavs>spurs]

maybe each card adds to your credit score. so if you're keeping up with your bills on 2 cards that = 2 X added to your credit score

[mavs>spurs]

i think even those little in store credit cards count. so if you have somewhere that you shop alot just put it on your store card. ummm you should have also built credit when you financed your car. mines paid off now but what i did was right after high school i bought a better used to last through college and paid on that for a while.

[Destro]

You don't need a credit card to build your score. That is complete BS. I bought a $150K house in Austin when i was 28 years old and I didn't have a credit card. I had a good paying job and used FHA where i only needed a 3% down payment, financed the rest through a credit union. I sold the house three years ago for $245. I have an American Express card now but it's just for buying stuff online and travel, otherwise I use a debit card.

Don't buy a new car stick with something older until you get your house. Once you get your house then you can start raising your lifestyle.

[GoodOdor]

You don't need a credit card to build your score. That is complete BS. I bought a $150K house in Austin when i was 28 years old and I didn't have a credit card. I had a good paying job and used FHA where i only needed a 3% down payment, financed the rest through a credit union. I sold the house three years ago for $245. I have an American Express card now but it's just for buying stuff online and travel, otherwise I use a debit card.

Don't buy a new car stick with something older until you get your house. Once you get your house then you can start raising your lifestyle.

Solid advise tbh.

Another question - what are good ways to protect my debit card?
I was thinking the other day - if someone gets my card and guesses/figured out my 4 digit password(like that Lucky fiasco, where I shop tbh), what's stoping them from withdrawing all my money? I would assume there's some kind of limit..... maybe a good idea would be to only keep 1 debit card(I have 2 right now) and only have 300 or so on it? then move the rest into a savings account or something similar.

[Agloco]

You don't need a credit card to build your score. That is complete BS. I bought a $150K house in Austin when i was 28 years old and I didn't have a credit card. I had a good paying job and used FHA where i only needed a 3% down payment, financed the rest through a credit union. I sold the house three years ago for $245. I have an American Express card now but it's just for buying stuff online and travel, otherwise I use a debit card.

Don't buy a new car stick with something older until you get your house. Once you get your house then you can start raising your lifestyle.

Took a small loss on it eh? :lol

Destro gave some sound advice. It's really hard to avoid temptation when you're young. If you can get out of your 20's without significant CC and auto/student loan debt you're halfway home tbh. Keep CC debt low, and keep old cards active if you already have them.

Your next step should be to invest in something tangible like real estate. Build up assets.

As for debit card security, your bank should provide you fraud protection. I had mine stolen once and the bank told me all that was required to have my funds restored was to file a police report. Nowadays, banks are more sophisticated though. I've been called by my bank a few times on my mobile when I've made large purchases or withdrawals from locations I don't frequent (before I've left the store or ATM). That might freak some folks out, but it gives me some peace of mind.

[CosmicCowboy]

If you are going to get a credit card get the Chase Freedom. It rocks. I buy everything I can on that card and get almost $1000 back per year.

[CubanMustGo]

Never mind ... bubba can't do simple math. The Chase Freedom card is a good one.

[bus driver]

pay for everything in cash

[DarkReign]

Someone used my SS# before I was 18, so while everyone was getting their first cards on their birthday (some before), I didnt. Got a credit report and seen the problem.

So, in order to right that ship, I gave my bank $500 for a credit card that had a limit of $500. Had to do that for a year, if you pay on time, the bank sends you your $500 back plus interest and lets you keep the $500 credit card.

That was how I did it. My credit is sterling as of now.

[Wild Cobra]

Several people have now advised me that I need to start "building" my credit. I have no idea what this means, so I could use some advice tbh.

Right now my only debt is my student loan, which I could pay off right now if I wanted. I got no credit card debt.

What do I need to do so in 4-5 years down the road when I probably want to buy a house, I would have good enough credit?
I was a credit ghost for more than 20 years until I bough a new car in 2000. I don't know if things changed, but I was told to finance at least $6,000 over at least 3 years. I went to buy a car and did just that. I wrote a check for the down payment of $19,000 and finance a little more than $6k. Had a terrible interest rate, but now I have some pretty good credit.

[BacktoBasics]

As stated above you do not need credit to make major purchases. I can't think of anything more destructive than owning a credit card. I understand the value behind responsible card ownership and the ability it gives you to leverage your money in inconvenient times but overall there really is no long term value. People are inherently irresponsible and lazy with their money.

Save your money appropriately and you can pay cash for almost all of your purchases except maybe a house.

I highly recommended listening to Dave Ramsey before jumping on the credit ship like everyone else.

Financial Peace and Total Money Makeover are two must have books. Actually I found the audio books to be easier to go through because he actually emphasizes the bigger issues way more than the books can. Buy them or download the torrent for free.

I have abused, repaired, abused and used my credit just like anyone else. I've also seen how shaky and fickle the bureaus can be while working at a dealership for 7 or so years.

I rarely use credit anymore.

[MannyIsGod]

Eh, I pretty much pay for everything exclusively with a credit card through the month, pay it off at the end of the month and avoid interest while racking up rewards points. If you have the discipline to do this, its a way to get more out of your money.

[Cant_Be_Faded]

That's what I do too. Paying your student loan on time, with no missed payments will give you a good credit boost.

[Spursfan092120]

Your credit is based on the bureaus seeing you have the ability to make payments on time. If you have more than one card going and you're making your payments, it's more proof that you can make payments. Try to find a rewards card and use it on small purchases like crazy. You get rewards, you pay it off to not get interest, and you build credit. It's a win win.

[ploto]

Another question - what are good ways to protect my debit card?

I was thinking the other day - if someone gets my card and guesses/figured out my 4 digit password(like that Lucky fiasco, where I shop tbh), what's stoping them from withdrawing all my money? I would assume there's some kind of limit..... maybe a good idea would be to only keep 1 debit card(I have 2 right now) and only have 300 or so on it? then move the rest into a savings account or something similar.

This is why a credit card is better than a debit card- just use one that charges no interest if you pay it off each month.

As for your student loan debt. Pay it off if you can. Think of it this way-- is the money earning you more sitting wherever it is than what you are accruing in interest on the debt? Paying it off yields a return.

[resistanze]

Eh, I pretty much pay for everything exclusively with a credit card through the month, pay it off at the end of the month and avoid interest while racking up rewards points. If you have the discipline to do this, its a way to get more out of your money.

Pretty much. Been using my credit for 4 years consistently, never miss a payment. Honestly, I've probably never made a purchase I haven't had the money for beforehand.

[GoodOdor]

What are good credit cards to apply for? I've had the same one with WellsFargo since I was about 18, and the credit limit is pretty low(4500), although I don't really see the need for a higher one. I've gotten a few offers in the mail - most recent one being Citi Diamond Preferred Card. Is it any good?

[Obstructed_View]

When I was 19, I got a Sears card, bought a wrench, cut up the card and waited for the bill. I got a Dillard's card, bought a pair of socks, cut up the card and waited for the bill. I paid both bills as soon as they arrived and never had to worry about my credit again. I started getting credit cards in the mail after that. Unless something's changed, they only look at if you close an account or fail to pay a bill, they don't look at how much you spend. They'll constantly try to increase your limit to entice you to spend money.

[IronMexican]

It's like this thread was made for me. I have no credit history and had to get my fad to buy a tv for me. Shit is pretty embarrassing.

[coyotes_geek]

What are good credit cards to apply for? I've had the same one with WellsFargo since I was about 18, and the credit limit is pretty low(4500), although I don't really see the need for a higher one. I've gotten a few offers in the mail - most recent one being Citi Diamond Preferred Card. Is it any good?

I'm normally not a fan of store cards, but if you shop at Target with any regularity I'd recommend their card. It gets you 5% off of purchases there. That's one of the better rewards returns for a card that I've seen.

[robino2001]

When I was 19, I got a Sears card, bought a wrench, cut up the card and waited for the bill. I got a Dillard's card, bought a pair of socks, cut up the card and waited for the bill. I paid both bills as soon as they arrived and never had to worry about my credit again. I started getting credit cards in the mail after that. Unless something's changed, they only look at if you close an account or fail to pay a bill, they don't look at how much you spend. They'll constantly try to increase your limit to entice you to spend money.

Most store cards close your account after 1-2 years of inactivity - so that necessarily doesn't help.

One thing that doesn't hurt someone young to do is, as other said, get a card, make a few purchases every month and pay it off. The simplest thing to do is to get a card and put a recurring payment on it (netflix, etc) and simply pay the $10 every month to pay the balance or whatever. It at least helps you build.

You do have to do SOMETHING. I know of a few people who's parents never let them/they never had anything in their name simply to establish credit through college. They get out of college, try to get an apartment and can't get a place because they don't have a credit history. So they try and build a credit history, but no one will give them a card. Brother-in-law had to do the credit loan thing through a credit union someone previously mentioned because no one would approve him for a card (or place) until something was established.

[CosmicCowboy]

What are good credit cards to apply for? I've had the same one with WellsFargo since I was about 18, and the credit limit is pretty low(4500), although I don't really see the need for a higher one. I've gotten a few offers in the mail - most recent one being Citi Diamond Preferred Card. Is it any good?

I researched it and IMHO Chase Freedom is by far the best.

No fee, 1% cash back on everything, 5% back on stuff that changes every three months. Right now it's 5% back on gasoline and Amazon.com.

https://creditcards.chase.com/freedom/LearnMore.aspx?CELL=6RRW&MSC=IQ17411941&jp_cmp=cc/03BRFreedomExact/sea/na/Chase&Freedom

[desflood]

At 19 I had no credit, but didn't want to fall into the credit card trap. Instead I went to my credit union and asked for a starter loan - just five hundred dollars or so, nothing big. I explained to them that it was simply to establish and build my credit. It took just a few months to pay off.

[Obstructed_View]

Most store cards close your account after 1-2 years of inactivity - so that necessarily doesn't help.

Yeah, that's perfect. You can get any number of real credit cards after six months to a year.


One thing that doesn't hurt someone young to do is, as other said, get a card, make a few purchases every month and pay it off. The simplest thing to do is to get a card and put a recurring payment on it (netflix, etc) and simply pay the $10 every month to pay the balance or whatever. It at least helps you build.

It's just not the simplest thing, because you don't have to make a few purchases. All you have to do is make a purchase to show activity and then not have any black marks, because that's what they check. Make one purchase and pay it on time and you have zero late payments and zero missed payments. They don't look at how much you spend, just how long you've had the account and how many payments you've failed to make. The longer you go without buying anything, the more they raise your credit limit to try to get you to buy something.

[Wild Cobra]

Eh, I pretty much pay for everything exclusively with a credit card through the month, pay it off at the end of the month and avoid interest while racking up rewards points. If you have the discipline to do this, its a way to get more out of your money.
Yes, this is the way to do things if you have the discipline. Still, if I recall correctly, credit reports look at your average, so they still see a balance of your card(s) when you do it this way. Therefore, keep your balance under a 30% max of your available.

B2B; I listen to Dave on occasion too. Wish I was a disciplined as he advocates.

Not certain of this, but I believe you want to used each credit card you have at least for one purchase every six months. then pay it immediately off that billing cycle. I believe the regulations have changed that allow them to change a "maintenance fee" for unused cards.

[robino2001]

Yeah, that's perfect. You can get any number of real credit cards after six months to a year.

The average length of time that accounts are open is very significant. There's little help to having multiple short CC's on your record. So doing a store, one purchase and that's it does help get you that initial access, but it doesn't help build/keep the score high. That said, it's not HORRIBLE for your credit - though might actually knock the score down a tad just because your avg open length is now shorter.

Wife had her father put her name on an acct/CC that he had open for ~25 years so she had an emergency card. It shows up on her credit report now and shows an age that's 2 years older than she is. That being on our credit report almost single handedly got us the mortgage we got on our first house at 23 years old.


Make one purchase and pay it on time and you have zero late payments and zero missed payments. They don't look at how much you spend, just how long you've had the account and how many payments you've failed to make.

Number of on-time payments is a very large factor too - does not making a payment ($0 balance) count as an on-time payment? I don't think it does -but I'm not sure.

[BacktoBasics]

B2B; I listen to Dave on occasion too. Wish I was a disciplined as he advocates.

Certainly there are a few rare birds that have the motivation and discipline to pay their cards off each month but that's not the case for 99.99% of card owners.

The level of indoctrinated beliefs when it comes to credit is sky high in this thread. Right along with the level of bad advice and horrible financial practices.

Just think about what's being suggest here. Sign up for a card so you can make purchases you can't afford while racking up interest and another monthly bill.

As opposed to saving your money for the purchase, earning interest on that money and not obtaining any additional debt or monthly payments.

All so you can say you have a pretty FICO.

At the very least you could put 30% down with a credit union and still earn under 10% interest on a used vehicle if you must finance a car and a home can be bought with little to minimal credit history with a strong down payment or equity such as land...

So what's really left for credit card purchases? Things you don't need or things that are more expensive than you can currently afford...or worse you're buying things that should be budgeted like gas or food or eating out. Say a 1-3k purchase. So essentially its okay to lack the disciple to save up for a 3k jiggawhatchamacallit so long as you can convince yourself you're disciplined enough to pay off a credit card each month. :lmao

This thread is desperately lacking in good sound fiscal advice.

[lefty]

Eh, I pretty much pay for everything exclusively with a credit card through the month, pay it off at the end of the month and avoid interest while racking up rewards points. If you have the discipline to do this, its a way to get more out of your money.
This :tu


And if I want to buy something online but for some reason have to avoid using my credit card, my debit card allows me to make online purchases

[Cant_Be_Faded]

Dude for the majority of people who want to buy a house and not osu heinous rates, or get outright denied a loan, raising fico scores by the various methods herewill actually save you money in the long run

[robino2001]

Certainly there are a few rare birds that have the motivation and discipline to pay their cards off each month but that's not the case for 99.99% of card owners.

The level of indoctrinated beliefs when it comes to credit is sky high in this thread. Right along with the level of bad advice and horrible financial practices.

Just think about what's being suggest here. Sign up for a card so you can make purchases you can't afford while racking up interest and another monthly bill.

As opposed to saving your money for the purchase, earning interest on that money and not obtaining any additional debt or monthly payments.

All so you can say you have a pretty FICO.

At the very least you could put 30% down with a credit union and still earn under 10% interest on a used vehicle if you must finance a car and a home can be bought with little to minimal credit history with a strong down payment or equity such as land...

So what's really left for credit card purchases? Things you don't need or things that are more expensive than you can currently afford...or worse you're buying things that should be budgeted like gas or food or eating out. Say a 1-3k purchase. So essentially its okay to lack the disciple to save up for a 3k jiggawhatchamacallit so long as you can convince yourself you're disciplined enough to pay off a credit card each month. :lmao

This thread is desperately lacking in good sound fiscal advice.

Then what's the answer for the recent college graduate that got out without any loans, cards, etc? Borrow the family minivan for a few years because they can't get a car loan? Live under a bridge because they can't get an apartment in the new city they got a high paying job in? Sure, living without any cards/loans/etc is a sweet dream, but you simply need SOMETHING established just to get into the real world in this day and age.

I'm in Manny/Lefty/and others boat... I use cards for everything, pay the balance every month... I make large purchases on 0% credit cards. Sure, I could pay cash for this entertainment center or this lawn mower, but why not finance it at 0% and collect the interest while my money is in my bank. I have 8 or 9 cards, never paid a dime of interest on any of them.

I get and agree that many are not disciplined to live this way, and if they're not, then some of the advice here may not be applicable to them... but a lot of this info really isn't bad if someone can utilize these methods responsibly.

[Wild Cobra]

Certainly there are a few rare birds that have the motivation and discipline to pay their cards off each month but that's not the case for 99.99% of card owners.

The level of indoctrinated beliefs when it comes to credit is sky high in this thread. Right along with the level of bad advice and horrible financial practices.

Just think about what's being suggest here. Sign up for a card so you can make purchases you can't afford while racking up interest and another monthly bill.

As opposed to saving your money for the purchase, earning interest on that money and not obtaining any additional debt or monthly payments.

All so you can say you have a pretty FICO.

At the very least you could put 30% down with a credit union and still earn under 10% interest on a used vehicle if you must finance a car and a home can be bought with little to minimal credit history with a strong down payment or equity such as land...

So what's really left for credit card purchases? Things you don't need or things that are more expensive than you can currently afford...or worse you're buying things that should be budgeted like gas or food or eating out. Say a 1-3k purchase. So essentially its okay to lack the disciple to save up for a 3k jiggawhatchamacallit so long as you can convince yourself you're disciplined enough to pay off a credit card each month. :lmao

This thread is desperately lacking in good sound fiscal advice.
Credit cards are good for inflight airline services, emergencies like towing or auto repairs you don't have enough money for, etc.

[resistanze]

I wouldn't go as far as saying 99.99% of people don't have discipline to use a credit card, lol. Thinking about it, I essentially treat my credit card as a debit card - I pay for things I have the money for. If I'm buying a Home Theater system on my CC, it's because 1) I don't want to carry cash for that 2) I'm doing it for reward points.

[coyotes_geek]

Certainly there are a few rare birds that have the motivation and discipline to pay their cards off each month but that's not the case for 99.99% of card owners.

The level of indoctrinated beliefs when it comes to credit is sky high in this thread. Right along with the level of bad advice and horrible financial practices.

Just think about what's being suggest here. Sign up for a card so you can make purchases you can't afford while racking up interest and another monthly bill.

As opposed to saving your money for the purchase, earning interest on that money and not obtaining any additional debt or monthly payments.

All so you can say you have a pretty FICO.

At the very least you could put 30% down with a credit union and still earn under 10% interest on a used vehicle if you must finance a car and a home can be bought with little to minimal credit history with a strong down payment or equity such as land...

So what's really left for credit card purchases? Things you don't need or things that are more expensive than you can currently afford...or worse you're buying things that should be budgeted like gas or food or eating out. Say a 1-3k purchase. So essentially its okay to lack the disciple to save up for a 3k jiggawhatchamacallit so long as you can convince yourself you're disciplined enough to pay off a credit card each month. :lmao

This thread is desperately lacking in good sound fiscal advice.

I agree with you that it doesn't make sense to get a credit card solely for the sake of buying stuff to generate a credit history for yourself. That being said, credit cards can be a useful tool that you can use to your financial benefit. Personally, I don't like carrying cash. I like the thought of being able to recoup some of what I spend in the form of benefits. I like being able to hang on to my money past the time of purchase. I like some of the consumer protections that credit cards can provide. I have the financial discipline to be able to use credit cards while maintaining a budget and am therefore able to use credit cards to my advantage. Obviously there are a lot of people who can't handle CC's and they need to stay away. But that doesn't mean that the only sound fiscal advice is to avoid credit cards like the plague.

My advice to someone in their early 20's contemplating getting a credit card would be to first take a look at how they're doing balancing their checkbook, paying their bills on time and living within a budget. If you're not currently doing all three, then don't get a card.

[CosmicCowboy]

I wouldn't go as far as saying 99.99% of people don't have discipline to use a credit card, lol. Thinking about it, I essentially treat my credit card as a debit card - I pay for things I have the money for. If I'm buying a Home Theater system on my CC, it's because 1) I don't want to carry cash for that 2) I'm doing it for reward points.

I agree. You just have to use them responsibly and pay them off every month and never be late. I actually am always floating money on mine...say the bill goes out on the 20th and the amount due is $2000...I'm still using it and by the time I pay the bill on the 6th (it's due the 9th) I might actually have $4000. on the card. I will pay $2500. (keeping me current and not paying any charges/interest) and float the $1500 till the next payment cycle interest free. Plus, racking up rewards is like free money...when I get 5% off on gas it's like getting $5 back free every time I fill up my truck.

[PM5K]

You don't need a credit card to build your score.

You might not need a credit card but you need some type of loan otherwise there isn't any information to generate a score.

[BacktoBasics]

Any benefit of carry a credit card for emergency purposes is negated by every bank card out there like stated above. You have the same consumer protections from a Visa or MC bank card.

If you have 4-5 months of income saved in an emergency fund that is all the protection you would need.

No one said anything about living under a bridge. A credit card does not save you from living under a bridge. Again this thread is full of indoctrinated beliefs surrounding credit, credit cards and financial freedom. A credit card at best is a convenience not a necessity. Credit is not a requirement for success or living. This boils down to the inability of people to manage their finances, have a working budget and GASP...save money.

I'm not speaking out of blind ignorance here. I abused my credit for years, lived off cards, did the buy now pay off at the end of the month game and went through rough times and good times. I also worked in sales and financing at a dealership so I know what the banks actually require for certain types of loans, particularly luxury loans.

Funny how once I started actually accounting for my money, created a functional working budget (not an unrealistic one) and starting saving I was able to manage making large purchases without the need for credit. I've also gone through two major unforeseen expenditures in the last 2 years both over 3k and I somehow got buy without the need for credit or a credit card. My emergency fund saved my ass multiple times. If you can afford that 400 dollar a month car payment you'd be surprised at how quickly you can actually save to pay cash for that same car. Or save enough for a down payment big enough that you can get financing at a good rate from a credit union regardless of FICO.

In the last two and half years I used my credit one time. And it wasn't for a nice box under a bridge.

For those that have 0% loans on this that or the other so their cash can earn interest. Most people flat out don't function that way. If not 99.99% then 85%...in any event its rare for the average joe to earn 0% on any financing and even more rare for them to function in a system where they purchase on a card and pay it off at the end of the month. Credit card companies cash in on lazy people with shitty spending habits and inability to pay things off not just right way but more specifically occasionally late. No matter what the scenario I would rather pay cash and have ownership and equity than earn a small interest for a year by making payments. If you can do all these wonderful things at 0% interest then good for you but lets not act like this is a regular everyday thing.

You guys actually believe that having and using credit while building and tearing down debts are the only way to live or worse are an unavoidable way of life. This could not be more wrong. The only real mistake I've made was not knowing how to change my way of thinking at a much younger age.

[MannyIsGod]

Who's building up debt? I don't see anyone advocating racking up a lot of debt in this thread. In fact I see the opposite.

I don't pretend to know what percentage of people are capable of paying off their debts each month but I do know here I stand in regards to that and thats why I use my CC's for buying everything. I HAVE to write a check for the rent otherwise I'd use it for that also.

[robino2001]

Any benefit of carry a credit card for emergency purposes is negated by every bank card out there like stated above. You have the same consumer protections from a Visa or MC bank card.

If you have 4-5 months of income saved in an emergency fund that is all the protection you would need.

No one said anything about living under a bridge. A credit card does not save you from living under a bridge. Again this thread is full of indoctrinated beliefs surrounding credit, credit cards and financial freedom. A credit card at best is a convenience not a necessity. Credit is not a requirement for success or living. This boils down to the inability of people to manage their finances, have a working budget and GASP...save money.

I'm not speaking out of blind ignorance here. I abused my credit for years, lived off cards, did the buy now pay off at the end of the month game and went through rough times and good times. I also worked in sales and financing at a dealership so I know what the banks actually require for certain types of loans, particularly luxury loans.

Funny how once I started actually accounting for my money, created a functional working budget (not an unrealistic one) and starting saving I was able to manage making large purchases without the need for credit. I've also gone through two major unforeseen expenditures in the last 2 years both over 3k and I somehow got buy without the need for credit or a credit card. My emergency fund saved my ass multiple times. If you can afford that 400 dollar a month car payment you'd be surprised at how quickly you can actually save to pay cash for that same car. Or save enough for a down payment big enough that you can get financing at a good rate from a credit union regardless of FICO.

In the last two and half years I used my credit one time. And it wasn't for a nice box under a bridge.

For those that have 0% loans on this that or the other so their cash can earn interest. Most people flat out don't function that way. If not 99.99% then 85%...in any event its rare for the average joe to earn 0% on any financing and even more rare for them to function in a system where they purchase on a card and pay it off at the end of the month. Credit card companies cash in on lazy people with shitty spending habits and inability to pay things off not just right way but more specifically occasionally late. No matter what the scenario I would rather pay cash and have ownership and equity than earn a small interest for a year by making payments. If you can do all these wonderful things at 0% interest then good for you but lets not act like this is a regular everyday thing.

You guys actually believe that having and using credit while building and tearing down debts are the only way to live or worse are an unavoidable way of life. This could not be more wrong. The only real mistake I've made was not knowing how to change my way of thinking at a much younger age.

So I haven't seen half of what you're saying is being advocated in this thread actually in here. Most of the advice in here is almost the exact opposite of what you say you're reading... but still - answer my question then because I'd love to know what the answer is without hyperbolizing my under a bridge comment... it's a serious question


Then what's the answer for the recent college graduate that got out without any loans, cards, etc? Borrow the family minivan for a few years because they can't get a car loan? Live under a bridge because they can't get an apartment in the new city they got a high paying job in? Sure, living without any cards/loans/etc is a sweet dream, but you simply need SOMETHING established just to get into the real world in this day and age.

Without ESTABLISHING (let alone building) credit, which is the main focus of the thread, how does someone get an apartment then? Maybe a kid worked his way all through college, lived at home, got a degree and a $20k signing bonus out of school. Add that to the $20k he saved while working for 4 years during college... screw the apartment (he can't go get one anyway w/o established credit while someone with ruined credit can), let's go buy a house. But we all know there's not a mortgage to be had if there isn't a credit history. So should he live at home for the next 15 years until he can pay $200k cash for a house while not getting a credit card or a special loan (as also suggested in the thread) to establish a credit history - because that seems to be what you're suggesting is the right/only thing to do for 85+% of people because they're not disciplined or responsible enough?

[PM5K]

It seems B2B is advocating saving enough money to cover certain unforeseen expenses, and that's reasonable, but to sit around saving up money to buy a car, when if you had credit you could simply get it financed, and most likely get an even better finance rate, makes a lot more sense. The same thing applies to homes.

Sure it might be stupid to use a credit card to buy things you should be able to reasonably save for in a short amount of time, but for other things it's nice to have good credit.

[BacktoBasics]

Who's building up debt? I don't see anyone advocating racking up a lot of debt in this thread. In fact I see the opposite.

I'm not saying anyone's advocating it but it goes hand in hand with credit card ownership no matter how responsible and spectacular you are with your cards. That's really the main point I'm making here because most people flat out aren't responsible with credit cards. They're certainly not a necessity in life. Its great that you can work the system to your advantage but most people even well intentioned won't or can't and inevitably get caught up in the credit card game. Its why revolving debt is one of the largest financial downfalls for Americans. I'm certain you can't deny that.

There are better ways for creating and building credit than utilizing revolving debt.

[BacktoBasics]

Then what's the answer for the recent college graduate that got out without any loans, cards, etc? Borrow the family minivan for a few years because they can't get a car loan? Live under a bridge because they can't get an apartment in the new city they got a high paying job in? Sure, living without any cards/loans/etc is a sweet dream, but you simply need SOMETHING established just to get into the real world in this day and age. I'm not sure exactly what you're asking me. If I was in college I'd work part time to save up for a car. Say 5k over a two year period until graduation. I absolutely would bum a ride from a friend, take the bus or ride a bike to avoid a car loan at that point in my life. I'd also put 2k in an emergency fund for repairs on that car and/or other unforeseen expenses.

As far as an apartment lease I have no real big issue with secured loans through a bank for building credit. Starting with a small 500 dollar prepaid loan and so forth. Most apartment complexes don't require major tradelines to rent anyway. Only marginally good credit and deposit. Some don't even require credit. To be honest I wouldn't rent an apartment. I'd rent a small house and most renters don't require big credit. The last two houses I rented didn't even require a credit check and both were nice houses in nice neighborhoods.

What I'm advocating is a little more thought and care than the traditional charge it mentality.

There's a reason at 27 years old I had 50-60k in debt and now at 35 I have 8k in debt (all business and only 1,500 personal). It takes letting go of traditional thinking, ingenuity, sacrifice and dedication to live a more intelligent and fiscally sound life.

But again as I mentioned before most credit unions will lend with 35% down and no credit for a car. There are home loans out there for minimal credit and 15% down.

If this didn't answer your question present it again.

[IronMexican]

Aww yeah, fagots. Just got approved by Capital One for a credit card 24.9% and only $500 dollar limit, but it's a start.

Am going to use this for my purchases on Amazon and will pay back right away.

[Agloco]

Aww yeah, fagots. Just got approved by Capital One for a credit card 24.9% and only $500 dollar limit, but it's a start.

Am going to use this for my purchases on Amazon and will pay back right away.

At 24.9, you'd better. :lol

Keep balances low should be a priority for anyone with a card. I currently owe nothing (except for the binge at Kumori last week :lol) with total credit line of 15k. Speaking of, that's another thing to watch out for. Don't take too much credit, even if you don't use it. Having too much open credit hurt my score so I pared it down to 15k.

[ineedgoodcredit]

It ain't easy.

[IronMexican]

So I paid off my Vita a month or aso ago and bought a cheap Surround Sound System for 250 on Amazon with my card now. I also just noticed my card budget had been increased to 750 without my knowledge. I;ve been thinking about buying a new barbell for around 300 bucks. Is it best not to do so on the same card? I still have $492 of credit.

[GoodOdor]

So I paid off my Vita a month or aso ago and bought a cheap Surround Sound System for 250 on Amazon with my card now. I also just noticed my card budget had been increased to 750 without my knowledge. I;ve been thinking about buying a new barbell for around 300 bucks. Is it best not to do so on the same card? I still have $492 of credit.

Seems the debt to limit ratio will be a bit high, tbh....

A little update about myself though: I took a free trial of equifax and turns out my credit is around 750, which is pretty good. MY current Wells Fargo Visa is 10000, but I think I'll be opening an account soon with Bank of America and getting a credit card with them as well.

[da_suns_fan]

Several people have now advised me that I need to start "building" my credit. I have no idea what this means, so I could use some advice tbh.

Right now my only debt is my student loan, which I could pay off right now if I wanted. I got no credit card debt.

What do I need to do so in 4-5 years down the road when I probably want to buy a house, I would have good enough credit?

Two words: Dave Ramsey.

Anyone who tells you to "build your credit" is a moron. You dont need credit. EVER.

You wont have any trouble qualifying for a good mortgage as long as you have a decent down payment, good income and no other debt.

Cash is King.

[ineedgoodcredit]

Several people have now advised me that I need to start "building" my credit. I have no idea what this means, so I could use some advice tbh.

Right now my only debt is my student loan, which I could pay off right now if I wanted. I got no credit card debt.

What do I need to do so in 4-5 years down the road when I probably want to buy a house, I would have good enough credit?

Do it now or pay for it later.

[DMC]

Marry a rich woman, credit score suddenly irrelevant.

[coyotes_geek]

So I paid off my Vita a month or aso ago and bought a cheap Surround Sound System for 250 on Amazon with my card now. I also just noticed my card budget had been increased to 750 without my knowledge. I;ve been thinking about buying a new barbell for around 300 bucks. Is it best not to do so on the same card? I still have $492 of credit.

Obvious disclaimers about paying everything off in full each month apply, as do all the points about how (not) important it is to "build your credit".

That being out of the way, if building your credit is something that's important to you, putting the barbell on the same card isn't going to hurt you. Yeah, you'd have a high credit utilization ratio between the time you bought the barbell and the time you paid the bill, but that's only something to worry about if you're planning on applying for more credit during that period.

As for your limit getting increased without your knowledge, that's pretty common. Good payment history + time = a higher limit.

[CosmicCowboy]

Seriously guys...if you have good credit and pay your bill in full every month y'all are nuts not to cancel the cards you have and get a Chase Freedom card. there is no annual fee and they PAY you to use it.

I put everything I can on it (that I am going to buy anyway) and get at least $1000 a year back from them...

https://creditcards.chase.com/freedom/LearnMore.aspx?CELL=6RRW&MSC=IQ17411941&jp_cmp=cc/03BRFreedomExact/sea/na/ChaseFreedom

[TheMrPeanut]

Seriously guys...if you have good credit and pay your bill in full every month y'all are nuts not to cancel the cards you have and get a Chase Freedom card. there is no annual fee and they PAY you to use it.

I put everything I can on it (that I am going to buy anyway) and get at least $1000 a year back from them...

https://creditcards.chase.com/freedom/LearnMore.aspx?CELL=6RRW&MSC=IQ17411941&jp_cmp=cc/03BRFreedomExact/sea/na/ChaseFreedom

x1000 $1000 ain't peanuts

[CubanMustGo]

Seriously guys...if you have good credit and pay your bill in full every month y'all are nuts not to cancel the cards you have and get a Chase Freedom card. there is no annual fee and they PAY you to use it.

I put everything I can on it (that I am going to buy anyway) and get at least $1000 a year back from them...

https://creditcards.chase.com/freedom/LearnMore.aspx?CELL=6RRW&MSC=IQ17411941&jp_cmp=cc/03BRFreedomExact/sea/na/ChaseFreedom

5%: Earn 5% cash back on up to $1,500 spent in bonus categories each quarter

so 5% of $6,000 (MAX SPEND) is $300;

1%: You'll always earn a full 1% cash back on everything else you buy, big or small. There are no limits on how much you can earn.

So to get $700 you'd have to put $70,000 on the card. Wow, good for you having that kind of money to spend (seriously). We have the Freedom Card, too, but just use it for bonus categories.

For me, I'd rather put $70K (if I had it!) onto something like an Citibank AAdvantage card, because free business/first class trips overseas cost WAY more than the $1000 you'd get from Chase. OK, it'll take a couple of years, but Citi throws bonus mileage mileage offers out there too from time to time. To each his own. Price a round trip for two in business from Austin to Hong Kong and then Sydney ... that's one of about five free premium international trips we've taken courtesy Citi and AA. :toast

[CosmicCowboy]

5%: Earn 5% cash back on up to $1,500 spent in bonus categories each quarter

so 5% of $6,000 (MAX SPEND) is $300;

1%: You'll always earn a full 1% cash back on everything else you buy, big or small. There are no limits on how much you can earn.

So to get $700 you'd have to put $70,000 on the card. Wow, good for you having that kind of money to spend (seriously). We have the Freedom Card, too, but just use it for bonus categories.

For me, I'd rather put $70K (if I had it!) onto something like an Citibank AAdvantage card, because free business/first class trips overseas cost WAY more than the $1000 you'd get from Chase. OK, it'll take a couple of years, but Citi throws bonus mileage mileage offers out there too from time to time. To each his own. Price a round trip for two in business from Austin to Hong Kong and then Sydney ... that's one of about five free premium international trips we've taken courtesy Citi and AA. :toast

I can run those kind of numbers because I also use it in my business to pay for stuff where I don't have open accounts and then reimburse myself.

[MannyIsGod]

Two words: Dave Ramsey.

Anyone who tells you to "build your credit" is a moron. You dont need credit. EVER.


Followed by:



You wont have any trouble qualifying for a good mortgage as long as you have a decent down payment, good income and no other debt.

Cash is King.

made me actually LOL

[pawe]

I listen to Dave Ramsey too but I elect to incur debt by way of credit cards and loans just so I can maintain/raise my credit even more.
Whatever interest I paid before from the small loans can be gained back overtime with the rewards I get with my credit cards.
Using credit cards and paying it off every month is the smart way to do it.

But, credit companies dont just look at credit card activities. If you really want a great score, you got to have a combination of credit cards, personal loan, auto loan, long standing bank account and a housing loan if possible.

Housing, insurance and employers all look at your credit score now...those motherfuckers!

[IronMexican]

Sup, brahs. What are some other good cards to have? I still only have my Capitol One card. Always make my payments on time, and have my limit at $750 right now. Would like another card an never use my debit card(besides to pay my rent and to pay off credit cards).