The other thread about credit cards got me thinking, I have never had a credit card myself and I have never really worried about it much. However, since I am about to graduate college and would be buying a car and a house in the future it might be nice to build up my credit a bit. What is the best way to go about doing that? Or is it not really worth the trouble?

Get a store /gas card, use it once, pay it off, cut it up (don't cancel it, just cut it up)

To build your credit score, you need to show that you are able to repay your debts, and manage your credit spending at the same time. The trick is to have the right amount of available credit for your income level, and then keep it in check -- keep your balances at a reasonable level compared with your total limit and make more than the minimum payment as often as you can. Do yourself a favor and visit the credit reporting agencies web sites or one of the other credit tracking services like freecreditreport.com. There is plenty of information there on what you need to do.

Good luck,
Dave

Sounds like more work than I was looking for but I agree more research is in order and I am fine with that. I was hoping I could just get a car spend $100 a month and just pay it off on time. I assume that would help my credit but not as much as I could by carrying a bit of a balance each month.

A credit (FICO) score is an ‘I love debt score’.
35 percent of the score is based on your debt payment history
30 percent is how much debt you have
15 percent is the length of your credit history
10 percent is the type of credit/debt you have
10 percent is any new credit

A home and car can be bought without a FICO credit history. Homes can be bought through manual underwriting which considers the ability to make payments and not on the credit history.

A credit card isn't needed to build a payment history. Paying rent and utilities 'on time' are a couple of ways to build that history.

My son is about to graduate college also. He has worked while going to college. Has no credit or charge cards, has owned 3 cars and one pickup. All without a credit history.

Other than a home mortgage I haven't has a loan in 20 years. I don't know what my credit score is and really don't care.

Life is possible without going into debt to build a credit history

The more you put on a card and pay it off the higher the score..When I was starting out, I would do all my monthly activities on a credit card...Take my monthly cash and PAY IT OFF asap..Put the card up and do the same with another one....I have 2 credit cards and have had them both since 1989. Your credit report will not show credit limits, only what the highest amount and how much owed, late payments and years account was open...BTW making late payments over 30 days kills a score and can stay on there for up too 10yrs..

Do yourself a favor.......... DON'T get a credit card. One can survive very well without them. If you feel that you MUST have something "for emergencies" use a debit card (against your checking account).

When I got out of college, I needed to do the same. I bought a cheap car for $2500, and took a high rate loan for it (it was all I could get, I think it was 20+%!). I did not pay it down too fast even though I could have, to build a reputation for paying on time. I think it was a 4 year loan that I paid off in 2 years or so. That seemed to help, as I was able to get credit cards and better rate car loans afterward. Not sure if it was the loan, or the fact I finally had a real job.

I started out by getting a one year car loan from the credit union. Pay it off promptly and move on to something else, like a home mortgage. Make sure you pay things off on time. And for your own benefit , do not carry a credit card balance. That way you will not be paying those huge interest rates. If you use a credit card, think about each purchase as if it were cash coming out of your pocket.

Get 1 or 2 credit cards. Don't get tons of them.
You actually do need a credit card for some things like renting cars. A debit card won't work.

Also, keep the the debt/credit ratio low (preferably zero). The ratio is what's most important, not the total amounts. You don't need to carry a balance.

Financing a car will help a lot too. That is considered a better type of debt than credit card debt.

One of my old school buddies had what he called an easy way to build credit.
I dont know if it will work or not but I figure I can pass it along and you make the judgement call.
Take out small loans from the bank say for 1000-1500 and just pay it back with the money you took out plus interest of course.
The more times you do this the more credit you should build, theoretically.

I'm not going to say that the guys on here aren't right, but in my opinion, you don't really need to go borrowing money you don't need to borrow to build a good credit score. If you pay your bills on time, and don't have any collections against you, I think you'll be able to get credit when you need it. Find a good mortgage guy and talk about what, if anything, you need to do to be able to buy a house in X years (whenever you think you'll be ready).

By the way, Pistol Pete is just a ripoff of Raider Red. And, Dez < Crabtree :)

Your credit report will not show credit limits

Not true with the TransUnion credit report. All the credit card accounts show a credit limit field.

I opened a checking, savings and received a credit card at age 18. I was responsible in using the credit card (i.e. carried small balances and paid on time - credit limit was under $500 for a few years). Denied for a Texaco card, but Union 76 offered me a card (then Texaco realized their mistake and offered me one!). Then, my Mom co-signed on an new car loan at age 22. Once I got out of college and a job, I've never had a problem getting a loan or credit card. I paid my debts on-time (except was a few days late once on CC payment).

I don't care what my credit score is at this point. If I get the credit I'm after and at the best rate, who cares if it's 720 or 850? Had friends get a 30-yr. fixed mortgage with nothing more than a credit card, bank account, and job. Flip side, my wife got denied for a higher-end furniture store credit card (her score was 852 - she went to Experian and paid as she was curious).

I'd say get a CC and be responsible. Get a job, save money, and buy your way into a mortgage and auto loan at favorable terms. Downpayment of 20% would probably get you just about any loan and a decent rate. Cash is KING.

I'm not going to say that the guys on here aren't right, but in my opinion, you don't really need to go borrowing money you don't need to borrow to build a good credit score. If you pay your bills on time, and don't have any collections against you, I think you'll be able to get credit when you need it. Find a good mortgage guy and talk about what, if anything, you need to do to be able to buy a house in X years (whenever you think you'll be ready).


Yeah, some of this is overkill, but I'd definitely get a credit card and use it enough to not have them close it on you. Keep it forever. You need that one account to set the length of credit history.

It can't hurt to learn as much as you can about the FICO score. I know all about it now - only because I screwed up a while back. Don't do what I did.

Also, it helps to look at your credit report occasionally to make sure it's accurate. There may be a mistake and there's some account with somebody with a similar name on your report or a case of identity theft.

....

A home and car can be bought without a FICO credit history. Homes can be bought through manual underwriting which considers the ability to make payments and not on the credit history.

A credit card isn't needed to build a payment history. Paying rent and utilities 'on time' are a couple of ways to build that history.

My son is about to graduate college also. He has worked while going to college. Has no credit or charge cards, has owned 3 cars and one pickup. All without a credit history.

Other than a home mortgage I haven't has a loan in 20 years. I don't know what my credit score is and really don't care.

Life is possible without going into debt to build a credit history

Well said Sir!

Andrew

A credit (FICO) score is an ‘I love debt score’.
35 percent of the score is based on your debt payment history
30 percent is how much debt you have
15 percent is the length of your credit history
10 percent is the type of credit/debt you have
10 percent is any new credit

A home and car can be bought without a FICO credit history. Homes can be bought through manual underwriting which considers the ability to make payments and not on the credit history.

A credit card isn't needed to build a payment history. Paying rent and utilities 'on time' are a couple of ways to build that history.

My son is about to graduate college also. He has worked while going to college. Has no credit or charge cards, has owned 3 cars and one pickup. All without a credit history.

Other than a home mortgage I haven't has a loan in 20 years. I don't know what my credit score is and really don't care.

Life is possible without going into debt to build a credit history

I'm not going to say that the guys on here aren't right, but in my opinion, you don't really need to go borrowing money you don't need to borrow to build a good credit score. If you pay your bills on time, and don't have any collections against you, I think you'll be able to get credit when you need it. Find a good mortgage guy and talk about what, if anything, you need to do to be able to buy a house in X years (whenever you think you'll be ready).

By the way, Pistol Pete is just a ripoff of Raider Red. And, Dez < Crabtree :)

Didn't mean to bring this from the dead but I like the sound of the advice to not get a credit card. I always thought it was crazy that I should be making 50K a year or more right out of college and not be able to get a decent interest rate on a mortgage or car loan. From what you guys are telling me I should be able to.

As for Pistolpete he was a real person so it would be pretty hard for him to be a copy of anything. Dez was definitely < Crabtree last year in stats but he's no slouch I would be happy if he made 90% or Crabtree's stats from last year. Two different styles of offense though so it probably wouldn't happen. See now you got me off topic talking bout football I apologize... :)

Do yourself a favor.......... DON'T get a credit card. One can survive very well without them. If you feel that you MUST have something "for emergencies" use a debit card (against your checking account).

X2

I had a Sears card back in 1965 but since I dumped that one I have lived on cash except for an occasional car or home loan. Basically if I don't have the cash to buy what I want, I wait till I do. I do have a debit card however. Handiest thing since sliced bread. Saves tons of time over a checkbook come checkout time. I've never seen my credit score and have not bought a new car since 1997.

I've bought one home and refied it twice, both times to lower the interest rate. Now we are under 6%. I'm content with that. My 72 Chevelle and my 96 Geo Metro are wholly owned by me. I operate them both on a cash basis.

A credit (FICO) score is an ‘I love debt score’.
35 percent of the score is based on your debt payment history
30 percent is how much debt you have
15 percent is the length of your credit history
10 percent is the type of credit/debt you have
10 percent is any new credit

A home and car can be bought without a FICO credit history. Homes can be bought through manual underwriting which considers the ability to make payments and not on the credit history.

A credit card isn't needed to build a payment history. Paying rent and utilities 'on time' are a couple of ways to build that history.

My son is about to graduate college also. He has worked while going to college. Has no credit or charge cards, has owned 3 cars and one pickup. All without a credit history.

Other than a home mortgage I haven't has a loan in 20 years. I don't know what my credit score is and really don't care.

Life is possible without going into debt to build a credit history

Best advice I have ever seen on TC

Didn't mean to bring this from the dead but I like the sound of the advice to not get a credit card. I always thought it was crazy that I should be making 50K a year or more right out of college and not be able to get a decent interest rate on a mortgage or car loan. From what you guys are telling me I should be able to.

As for Pistolpete he was a real person so it would be pretty hard for him to be a copy of anything. Dez was definitely < Crabtree last year in stats but he's no slouch I would be happy if he made 90% or Crabtree's stats from last year. Two different styles of offense though so it probably wouldn't happen. See now you got me off topic talking bout football I apologize... :)

Well I tell you what, as long as you guys donkey stomp aggie this year we'll call it even.

If your trying to build credit history, a credit card is ok, but with all the BS some of these companies put you through it isn't really worth it. What I did was to go into my bank with 1500.00 cash and took out a loan against that money, then I used that money to pay the monthly payments. I paid it off yearly as to avoid paying too much interest.

A credit card is safer then a debit card, though. If someone steals your identity and makes charges against your debit card, that money is gone and you have to call and get them to put money back in your account. This can take time and is more painful than the same scenario on a credit card. You don't want a rent check to bounce because some piece o' crap drained your account.

A credit card is safer then a debit card, though. If someone steals your identity and makes charges against your debit card, that money is gone and you have to call and get them to put money back in your account. This can take time and is more painful than the same scenario on a credit card. You don't want a rent check to bounce because some piece o' crap drained your account.

Visa Debit cards have the same protection as their credit cards.

Important facts about debit cards

Debit cards have the same security protections like as credit cards. Just like credit card cards, debit cards have Zero Liability (http://usa.visa.com/personal/security/zero_liability.html)* fraud protection and dispute resolution optionsLink (http://usa.visa.com/personal/using_visa/personal_finance/debit.html)

Visa Debit cards have the same protection as their credit cards.

Link (http://usa.visa.com/personal/using_visa/personal_finance/debit.html)

Only on signature-based transactions. Most people I see using Debit cards enter their PIN, which will not provide the same level of protection as signature-based VISA processed transaction.

Plus, the money is GONE from your checking account until VISA restores it if you have noted fraud. Whereas, using a credit card, you haven't lost any money so you can continue to pay normal bills without trying to drum up cash to cover for fraud losses from your checking account.

For me, credit cards are a way better way to purchase items. Earn points and money comes from the checking to pay the bill each month.

Only on signature-based transactions. Most people I see using Debit cards enter their PIN, which will not provide the same level of protection as signature-based VISA processed transaction.


For me, credit cards are a way better way to purchase items. Earn points and money comes from the checking to pay the bill each month.

Good point. I always use my Debit as a signature- based transaction. It pays to be informed.

As far as earning point or cash back.

Use Your Card Wherever You Go: 1% cash back on all eligible purchases! No purchase too small! Get cash back on that bag of Doritos you just bought on credit! Never mind the fact that when you use a credit card you’re very likely to spend more than if you had just paid cash. There is just something about using cash that hurts more. Dun and Bradstreet found that on average people end up spending 12-18% more when using a credit card! By way of example, when McDonald’s started taking credit cards for purchases, the average purchase went from $4.50 up to $7.00!

Credit card companies are in business to make money. They come out ahead with their cash back promotions. Consumers as a whole spend more of their money to receive that 'feel good' cash back rewards.

Visa Debit cards have the same protection as their credit cards.

Link (http://usa.visa.com/personal/using_visa/personal_finance/debit.html)

Intresting. I always wondered about that.

Ok guys bringing this one back from the dead again with an update. I still haven't gotten any credit cards and don't plan to. What I have done is buy a truck with CASH. Its a 93 Chevy SWB Indy 500 Pace Truck with some minor front end damage. Should be worth around $5000 or more when its finished. I know its not much but I am just wondering if owning another vehicle (besides my chevelle) can help me get a loan in the future as well? Or is it just mainly something else to be considered as collateral if need be? Thanks again for all the help this has been some really good advice so far. I realize I am a bit naive but I wanna have my ducks in a row when a start looking for houses in a year or so.

Well I tell you what, as long as you guys donkey stomp aggie this year we'll call it even.
Well, we will do our best. Mind if we kick some longhorn butt as well?

Ok guys bringing this one back from the dead again with an update. I still haven't gotten any credit cards and don't plan to. What I have done is buy a truck with CASH. Its a 93 Chevy SWB Indy 500 Pace Truck with some minor front end damage. Should be worth around $5000 or more when its finished. I know its not much but I am just wondering if owning another vehicle (besides my chevelle) can help me get a loan in the future as well? Or is it just mainly something else to be considered as collateral if need be? Thanks again for all the help this has been some really good advice so far. I realize I am a bit naive but I wanna have my ducks in a row when a start looking for houses in a year or so.

Great decision. I wish I had received the knowledge from "Racing" below when I was your age, things would be a lot different now. My credit score is 780+ and I don't want it any longer. About six months ago I learned what Racing already new and I am now working diligently to be totally debt free and working toward a credit score of zero. :thumbsup: I encourage you to keep doing all you can to save up for something and pay cash rather than use credit. Check out Dave Ramsey http://www.daveramsey.com/ as Racing's is just what Dave would say. I am 100% sure that if one was to follow Dave's advice from an early age then that person would be able to retire very comfortably at an early enough age that he would be able to live like no one else.

A credit (FICO) score is an ‘I love debt score’.
35 percent of the score is based on your debt payment history
30 percent is how much debt you have
15 percent is the length of your credit history
10 percent is the type of credit/debt you have
10 percent is any new credit

A home and car can be bought without a FICO credit history. Homes can be bought through manual underwriting which considers the ability to make payments and not on the credit history.

A credit card isn't needed to build a payment history. Paying rent and utilities 'on time' are a couple of ways to build that history.

My son is about to graduate college also. He has worked while going to college. Has no credit or charge cards, has owned 3 cars and one pickup. All without a credit history.

Other than a home mortgage I haven't has a loan in 20 years. I don't know what my credit score is and really don't care.

Life is possible without going into debt to build a credit history

Couldn't agree more about Dave Ramsey. I have done some of his studies already and he has a marriage study that I plan to do if I get engaged.

The credit companies want to see that you pay both kinds of debt.

a. debt such as a mortgage or student loans, ones that show a long track record of payments (ontime) and that you are a good long term risk.
b. they want to see that you have debts such as credit card debts and that you pay more than the minimum payments or pay them off early.

also. They want to see you have those credit cards for a length of time. Keep the good cards, dont get rid of them even if the company pisses you off. I usually make charges and pay the thing off the next week, I don't wait for the statment.

One last thing. make sure that you don't 'max" out cards. Keep you total charges under 35% of the amount of available credit from the card.

Follow this advice and your credit scores will flourish

Couldn't agree more about Dave Ramsey. I have done some of his studies already and he has a marriage study that I plan to do if I get engaged.

Cool! Then you have your answer. Dave would say to not borrow for a car. Best of luck to you. You'll do just fine.

Not true with the TransUnion credit report. All the credit card accounts show a credit limit field.

I opened a checking, savings and received a credit card at age 18. I was responsible in using the credit card (i.e. carried small balances and paid on time - credit limit was under $500 for a few years). Denied for a Texaco card, but Union 76 offered me a card (then Texaco realized their mistake and offered me one!). Then, my Mom co-signed on an new car loan at age 22. Once I got out of college and a job, I've never had a problem getting a loan or credit card. I paid my debts on-time (except was a few days late once on CC payment).

I don't care what my credit score is at this point. If I get the credit I'm after and at the best rate, who cares if it's 720 or 850? Had friends get a 30-yr. fixed mortgage with nothing more than a credit card, bank account, and job. Flip side, my wife got denied for a higher-end furniture store credit card (her score was 852 - she went to Experian and paid as she was curious).

I'd say get a CC and be responsible. Get a job, save money, and buy your way into a mortgage and auto loan at favorable terms. Downpayment of 20% would probably get you just about any loan and a decent rate. Cash is KING.


How can her FICO score been 852 when I believe the highest it can be is 850? Typo? :confused:

One thing I always tell people when they are young..Never let the FANCY RIDE keep you from buying a house...It is 10x's easier to get the house, then buy the vehicle you can afford..I see alot of youngsters go buy this 40k truck and want to know why they got turned down for the house...

How can her FICO score been 852 when I believe the highest it can be is 850? Typo? :confused:

Many people don't realize the difference between a FICO score and a score from one of the credit reporting agencies. The max FICO score is 850, as you correctly stated. When I checked my score on FreeCreditReport.com, my score was 894 based on TransUnion's TransRisk 2.0 credit score system that calculates a score between 400 and 925.

Credit cards - To paraphrase one card company's ads, LEAVE HOME WITHOUT THEM! In fact live life without them.

People were able to get car and home loans for decades before credit cards became widely available. I will never have credit cards again, ever!

Okay folks, my daughter wants to get a house this year, wants to take advantage of the 8K credit. Her real estate agent says for her to get a credit card to start getting a credit history.We suggested a secured card, I guess she'll find out this week. So anyone in the bank/finance background have any insight on what to do about getting a credit card in the last few months? OR which mortgage company to work with that doesnt require a credit history? Basically she's got a good job, college graduate, getting married in sept. future husband has good credit. and has cash to put a down payment on a house. thanks!!!! jim

Okay folks, my daughter wants to get a house this year, wants to take advantage of the 8K credit. Her real estate agent says for her to get a credit card to start getting a credit history.We suggested a secured card, I guess she'll find out this week. So anyone in the bank/finance background have any insight on what to do about getting a credit card in the last few months? OR which mortgage company to work with that doesnt require a credit history? Basically she's got a good job, college graduate, getting married in sept. future husband has good credit. and has cash to put a down payment on a house. thanks!!!! jim

Churchill Mortgage (http://www.churchillmortgage.com/commonframe.php) is one on the lending institutes that will be able to help you with this.

Thanks I'll tell my daughter to contact them. jim

I will have to remember churchill mortgage as well thanks. I have certainly been raised on the values that credit cards are unnecessary as my parents didn't acquire any until just a few years ago. I realize there are benefits and drawbacks to them. My main concern is if they are necessary and I believe I have my answer(NO). I will probably have to revive this thread again in a year or so but thanks so much to those who have given great advice. I can always count on you guys!

Her real estate agent says for her to get a credit card to start getting a credit history.

Find a different realtor.

I remember the day I went to cabela's with my dad, god father, and his dad at the check out line god father's dad tried to open a line of credit at the store only to be denied! At the time he was 80 yrs old, had owned several small businesses and ran a meager junkyard. I guess all this time he never got credit in his name and was denied a credit card whereas this young 18 yr old punk could get a credit card cuz he had a cell phone bill!

Find a different realtor.

Yep. They call them "brokers" for a reason. :p