Kage
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| Establishing Credit |
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Alright, I am 19 years old and trying my very best to establish credit the right way.
Info:
I have 0 Credit
I have a stable job and make between 1200-1800 a month
I live with my parents who rent a house and have below average credit. We're also about to move which seems to hurt in credit applications.
I have a bank account, but no savings account.
So, I know I can't get a regular credit card and I've heard that secured cards aren't the best way to establish credit. I've heard about department store cards, but have yet to try and obtain one. If I did it'd probably be from Best Buy or a gas station card.
I have resisted applying for said items because I know getting denied shows up on your credit report and I don't want to hurt my chances of getting credit.
Any advice?
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Mon Apr 26, 2010 11:42 pm |
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coaster
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I was wondering what it was you heard about secured cards not being a good way to establish credit?
~Tim~
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Tue Apr 27, 2010 6:32 am |
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Kage
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It seems in every guide to establishing Credit they're listed last. It seems that though you can establish credit through them that other means are more effective.
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Tue Apr 27, 2010 11:51 am |
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coaster
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Yes, there are other ways, but if it's the only way open, then you take the way that's open, don't you?
~Tim~
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Thu Apr 29, 2010 11:52 pm |
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Kage
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Well if it was the only way open then yes, but the reason I'm here is to see if there are others.. (which I already stated, but apparently you missed that). Gas cards, Department Store credit cards.. they say they're good options, but I'm not sure if you need credit to get them or not.Generally there is more than one way to do things..
So then any helpful advice?
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Fri Apr 30, 2010 7:59 pm |
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coaster
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Sorry, no helpful advice, my personal knowledge only covers secured cards, but I will try to help you with this: you might check out this website:
http://www.myfico.com/Default.aspx
This site is the company that developed and licenses the scoring model that credit agencies use to determine credit scores. Take particular note of the "Education" and "Community" tabs. There's a lot of information there and also a lot of discussion. I don't doubt that this is an issue that's well-covered there.
Best wishes and good luck. 
~Tim~
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Fri Apr 30, 2010 8:54 pm |
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jason_simpson
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When a credit card or loan is secured, it means that there is an asset linked to the account that the lender can take if you fail to make payments. When you have a mortgage or auto loan, these are secured loans. If you fail to make payments, the lender will take your house or car in order to satisfy the debt.
You can establish the same thing at most banks with a secured credit card. You can pledge money you deposit in an account to secure the credit card. For example, you could obtain a secured credit card with a $500 limit if you put a $500 deposit in the bank that is linked to the card. If you fail to make your credit card payments, the bank takes your deposit.
After you maintain that account in good standing for a while, you may be able to obtain a regular credit card or loan.
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Sat May 01, 2010 11:43 am |
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jennquilter
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If you never wound up getting an education or car loan (usually cosigned by your parents, but you said they have bad credit) then getting a secured card is really the best way. Getting a gas card or department store card may work if you get approved (though approval can be hard to come by, a lot of companies seem to think no credit is worse than iffy credit) BUT a lot of them don't even report to all the credit reporting agencies anyway, so then you just wasted your time.
If you think you'd like to try the department store card anyhow, I'd still do the second card from the bank to sort of hedge your bets and not waste any time establishing credit.
Good luck!
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Thu May 13, 2010 10:40 pm |
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archercredit
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A good way to start out is begin with your bank. Get a checking account with a line of credit that reports to the credit bureaus. You can also get a credit card with that same bank. This way your credit isn't getting pulled 3 different times either. You could later get a loan or mortgage with the same bank and have a good reputation with them.
It is a good idea to have a variety of credit, like credit card, store card, auto loan, and so on. So maybe one store card will help also. The most important thing of course pay everything on time, good luck.
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Fri May 21, 2010 11:31 pm |
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FHA Loan
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Maintain a decent balance in your checking account for a while and then apply for a credit card with your bank by visiting your branch.
Have you even applied for a credit card with them yet? You might be presently surprised. If you have check stubs for the last few months showing that you are making the kind of money you stated, they may approve you even now.
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Sat May 22, 2010 2:51 am |
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Creditnet_com
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Do you happen to be in school? You could easily apply for a student credit card if you are, and you won't need a co-signer if you can document the income you make each month. http://consumers.creditnet.com/Credit_Cards/Student/
If not, secured cards are a good option for someone who has limited or no credit, or damaged credit and would like to start rebuilding. As stated before, you need collateral to "secure" your card... oftentimes, your credit limit is equal to the money you use to secure the card. If you secure the card with $500, then your credit limit will be around $500. But the money you use to secure the card cannot be touched.
Capital One offers a secured card for people with limited credit with a low annual fee of only $24. They also review your account periodically and may give you credit limit increases without requiring you to increase your security deposit. You can read more about it here: http://www.creditnet.com/Credit_Cards/capital-one-secured-mastercard.php
Although denials of credit may bring your credit score down, the decrease will be minimal unless you apply for tons and tons of credit at the same time. I suggest you try applying for one of the following first: Capital One Secured card, a student card (if applicable to you), a credit card through your bank, OR a gas/department/store card (make sure it is Visa/MasterCard/Amex/Discover branded and reports to credit reporting agencies). Apply for one first and if denied, wait a month or two and apply for another. After you've been approved for your first, it'll be much easier to get approved for another, especially when you've used your credit wisely by paying off in full and on time each month.
Good luck! If you have any other questions, feel free to visit Creditnet.com's Learning Center where you can learn the basics of credit to equip you with the knowledge you can use to build excellent credit. http://consumers.creditnet.com/Library/
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Tue Jun 01, 2010 2:29 am |
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AlFromLA
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I would start with a department store card or something...buy something off those cards, pay them on time, and thats how you will establish credit
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Wed Jun 09, 2010 11:17 pm |
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jason_simpson
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A "secured" credit card works great for someone who has no credit score yet or a LOW credit score...
It basically means you give the bank $1000 they then give you a credit card with a $500 limit. You go shopping, and pay the credit card bill when it comes monthly like normal credit cards. The $500 sits in the bank and does not get touched, that's where the title "secured" comes in.
In a few months you have credit built up and you can ask for a higher line of credit.
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Thu Jun 10, 2010 1:54 pm |
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