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Old 02-06-2008, 11:18 PM   #1
newyorker
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19 to be 20 and want to start building credit

OK so I had an opportunity to start buildidng my credit when I got my civic, but for some reason I overlooked the opportunity. I should have borrowed money from the bank and then paid them back (considering that I had enough money for the car it would have been a very easy way).

I am going to community college now, and working as well. I have this semester left, and 2 more next year to get my associates. Obviously when the time comes to go to temple (university, not a church lol), my tuition is going to be a bit higher (currently its 16k a year for my major), so I will have to take out loans regardless, and I want to build some kind of credit score now so I can get these loans in my name under a not so rape-like percentage. ive been pondering this for a few weeks and here is what I came up with.


1. When my parents go to buy something big, like a TV or something of the expensive likes, I will buy it under my name and they will just pay me to pay the bills..pretty easy way to start on my score..problem is we have no big purchases in the future.

2. Work for a bit, save the money, sell the civic, and get a new car, use the money from work and the car sale for a downpayment, finance the rest, and start building that way. The only problem is that at the end, I will spend a LOT of money for this.

3. Buy a second car for like 4000 bux, and just pay for that through a loan, and my credit should start growing. This seems to be the best of the routes because I will have a toy, I already got an insurance quote for a car in mind and its only another 38 a month, and in the end I have 2 cars, and a credit score.

4. (not sure if this will work or if its legal someone fill me in). Get a loan from the bank for example for 5000, and get the money. Then use that same money to pay back the loan, and just pay the intrest out of my pocket.


Any other suggestions??
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Old 02-07-2008, 12:38 AM   #2
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Quote:
Originally Posted by newyorker
4. (not sure if this will work or if its legal someone fill me in). Get a loan from the bank for example for 5000, and get the money. Then use that same money to pay back the loan, and just pay the intrest out of my pocket.
Of course it's legal, but silly.... You're effectively giving the bank money for nothing. You'd be better off without the credit rating and paying slightly more interest later on.
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Old 02-07-2008, 12:44 AM   #3
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Credit cards are a dime a dozen these days. Just get one...even a secured one if it's the only one you can get and start using it for purchases you'd normally just pay for with cash/check or your atm card.

Credit has more to do with paying on time rather than the amounts you are using and paying back.

If you do/can borrow some money from a bank...put it back in another bank or a cd to earn interest and pay the monthly bill...at least you'll make a little or not lose as much for gaining credit.
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Old 02-07-2008, 12:49 AM   #4
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Quote:
Originally Posted by newyorker
1. When my parents go to buy something big, like a TV or something of the expensive likes, I will buy it under my name and they will just pay me to pay the bills..pretty easy way to start on my score..problem is we have no big purchases in the future.

That sounds illegal.
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Old 02-07-2008, 12:50 AM   #5
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Originally Posted by jedimario
That sounds illegal.

What? Not.
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Old 02-07-2008, 01:44 AM   #6
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Just start a credit card. I started a student's VISA card (limit blows so you're probably going to need to work around it probably) and with ON TIME payments, my score has risen REALLY well until now and it's only been like 8-9 months. If you open up more than one credit card, it'll be faster. This is all assuming:

1) You use the credit (not debit) cards intelligently.
2) You make your payments ON TIME.

This works two ways. Miss your payment a couple of times and you're going to get raped.
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Old 02-07-2008, 02:33 AM   #7
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Quote:
Originally Posted by Nissan_Altima
Just start a credit card. I started a student's VISA card (limit blows so you're probably going to need to work around it probably) and with ON TIME payments, my score has risen REALLY well until now and it's only been like 8-9 months. If you open up more than one credit card, it'll be faster. This is all assuming:

1) You use the credit (not debit) cards intelligently.
2) You make your payments ON TIME.

This works two ways. Miss your payment a couple of times and you're going to get raped.
Yea I heard that if i open a bunch of cards with a total limit of like 10k (generally the highher the better) and if I use a lower percentage, my credit will grow quick.

Example. Get credit cards for 10k but only purchase on a monthly basis 1k and always pay it off on time

I heard thats a quick way
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Old 02-07-2008, 05:15 AM   #8
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taking out many cards at once could negatively effect your score. Just start with one or two cards, your bank should offer one if you have a checking account, use it for most of your purchases, and pay your bills on time. Don't go and buy something that you don't need, invest the money instead. When looking for cards though, see if you can find how they report to the credit agencies, some only report available balances or something strange, maybe someone else knows better.
Your credit limit will probably start around $200 on your typical card, so use it wisely. keep track of your balances, and never go over your limit. To be sure you can pay it on time, never spend money you don't have. Don't count on paychecks clearing the day before your payment is due.
A card that offers cash back is nice, but most offer some kind of points for airline miles and such, some of which are completely useless. shop around.
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Old 02-07-2008, 05:49 AM   #9
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I think two cards is a good place to start. Any more than that will just make things very confusing and will not positively affect your credit score anyway. One would ideally be with a checking account you have. However, sometimes they don't provide people with bad or no credit a good credit card.

In either case, you can always open up a student's credit card. Temple might even have one of its own. Penn does and I know some other schools do too so look around. Your limit will probably be closer to $500 when you start out but you'd be surprised how fast your credit score will be built, provided you pay your bills on time.
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Old 02-07-2008, 05:53 AM   #10
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Originally Posted by BavarianWheels
What? Not.
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Maybe, I have no clue...but it sounds fraudulent.
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Old 02-07-2008, 06:06 AM   #11
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Quote:
Originally Posted by jedimario
Maybe, I have no clue...but it sounds fraudulent.
No more fraudulant than going to Subway and buying co-workers lunch then having them pay you back.

I've also got to stress that having too many credit cards will negatvely affect your score. I got one when I was 18, the credit limit was at least $4,000. Now I think it's about $5,500 on that card.

It may sound dumb/obvious, but when you do get one keep track of everything you buy with it. You tend to forget that you spent $150 on gas, $50 on food, etc, until your bill comes at the end of the month.
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Old 02-07-2008, 06:54 AM   #12
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Quote:
Originally Posted by giant016
No more fraudulant than going to Subway and buying co-workers lunch then having them pay you back.

I've also got to stress that having too many credit cards will negatvely affect your score. I got one when I was 18, the credit limit was at least $4,000. Now I think it's about $5,500 on that card.

It may sound dumb/obvious, but when you do get one keep track of everything you buy with it. You tend to forget that you spent $150 on gas, $50 on food, etc, until your bill comes at the end of the month.
Yep..I dont spend that much on gas..gas for me is only like 80 a month TOPPS, but I was thinkin about getting a shell card, you get money back, and I think its through mastercard or someone big like that so that might help, and I can use it for gas only, wont do much but still should help
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Old 02-07-2008, 03:02 PM   #13
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Not sure if this has been said, so appologies if it has, but you might want to bear in mind that by taking out a loan and paying it all back at once would probably have no effect on your credit rating...It might even have an adverse effect because the companies wany you to pay back a little at a time due to interest etc...and because they want as much of your hard earned cash bas possible!
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Old 02-07-2008, 06:11 PM   #14
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One last time.

Credit is more about paying ON TIME rather than how much you're paying or paying off. Consistency in paying = more credit.
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Old 02-07-2008, 06:31 PM   #15
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Quote:
Originally Posted by BavarianWheels
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One last time.

Credit is more about paying ON TIME rather than how much you're paying or paying off. Consistency in paying = more credit.
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that is very true, as i had a credit card for about 1.5 years before i got my car loan, and had always paid it off on time and never gone over my limit. ofter i got my loan, which i paid off a couple months ago, after about 2.5 years, my credit score went up by like 10 points max.

ok, what i just said doesn't realy make sense but you get the point
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