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Author
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Topic: Best way to build credit?
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NiftyWhiteFifty
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Member # 4320
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posted
 
 
I'm trying to build good credit. I got one credit card right after i turned 18, two years later (last summer) i tried to apply for an auto loan and they refused me for "lack of credit" the people at wells fargo financial said that they don't usually give a loan to someone who has less than three open credit lines on good standing.
So right now i have two credit cards. I pay them on time every month and try to pay the balance in full every month. I've considered getting a third credit card because of what the banker told me about having a minimum 3 open credit lines in order to qualify for a loan. Do you think this is true or should i just keep the two credit cards i have now?
I am very responsible on what i buy on credit and as i said, try to pay off the balance in full every month.
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'05 F150 4x4
Posts: 2056 | From: San Jose | Registered: Mar 2004
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ChrisS
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Member # 6699
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posted
get a sears or macys card.....thats what i did...id wait 90 days after that to apply again
[ May 03, 2006, 03:18 AM: Message edited by: luvmy5.0 ]
Posts: 632 | From: Dallas Texas | Registered: Apr 2006
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slidewayz94
CAFords OG
Member # 3101
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posted
I jumped into an auto loan at the age of 18 best thing for me. Try a reputable credit union. I joined Golden 1 credit union.
3 years later at 21 I tried to finance a jet ski and was denied by that particular finance company for lack of credit experience even though I had excellent credit. I just went back to my credit union and was approved in 5 mins.
Posts: 4251 | From: Sac | Registered: Jul 2003
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91Trunkster
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Member # 6598
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posted
My advice to you is to get the Department Store Card and a general rule for buying things, if you can't afford to pay cash you shouldn't buy it.
Car payments suck. It's OK to put a huge downpayment and make tiny $100 payments that way you can establish more credit.
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(510)375-1589
Posts: 1648 | Registered: Mar 2006
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NiftyWhiteFifty
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Member # 4320
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posted
Well i'm not really looking to get a car loan right now. I just want to start building good credit so that when i want to get a car loan or even a home mortgage i'll be able to.
trying to think ahead here ![[patriot]](graemlins/patriot.gif)
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'05 F150 4x4
Posts: 2056 | From: San Jose | Registered: Mar 2004
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eljefe
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Member # 1753
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posted
ya i got a loan for a cheap car when i was 18 and took the hit on intrest on that loan. but i got it paid off (early even) i also got a credit card when i turned 18. i got a loan for my cobra last year with a good apr, i financed a computer through dell a few months ago, and just today i got top tier financing from toyota for my new car. my credit score was 756 and long enough (almost 5 years now) im 22 have 2 cars, a new computer and can afford it all with plenty to spare after paying bills. i don't pay rent tho so that obviously helps
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1969 mustang coupe - the project
1996 mystic cobra - 13.64@105 - sold :(
2007 yaris - daily driver
Posts: 737 | From: holiday in rancho cambodia | Registered: Aug 2002
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NiftyWhiteFifty
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Member # 4320
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posted
quote:
Originally posted by 91Trunkster:
My advice to you is to get the Department Store Card and a general rule for buying things, if you can't afford to pay cash you shouldn't buy it.
Car payments suck. It's OK to put a huge downpayment and make tiny $100 payments that way you can establish more credit.
Yea for sure. I like not having to make payments on my cars ![[Smile]](smile.gif) I know when my dad was my age, he bought is first car (a 68 mustang coupe). he had enough to pay cash for it but got a loan instead to build credit. he paid it off in a year or two and then bought a townhouse at the age of 22
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'05 F150 4x4
Posts: 2056 | From: San Jose | Registered: Mar 2004
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98slowhoe 'FIFTYLX'
Uncle Frank
Member # 895
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posted
I started with a wells fargo student account and they gave me a credit card. Then I got a Capital one card, and a small personal loan. I paid off the personal loan wich Boosted my credit score. I then got cards like best buy car and a Sears card. I have since closed my wells fargo card, and about to close my best buy card. I just got the best buy cause of those get 15% off things. I also financed a waverunner wich will be payed off within a couple of months. I have a Car loan now, which I want re-finance with somebody else to get a better rate. You just have to start off little man. I am 23 now and this all started at 18. Maybe get a summit card?
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AKA Franky Freaking 5 liter
Advanced Engine Development
SCT dealer
Dynotuning
Engine building
916*275*8212
88 4runner on 42's
Posts: 4206 | From: Folsom | Registered: Feb 2002
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98slowhoe 'FIFTYLX'
Uncle Frank
Member # 895
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posted
oh yeah another thing too. When the companies look at your credit history they don't neceserly like to see a zero ballance on your card. If you had a 1000 credit line they don't want to see a 900 ballance but would rather see that you have like 200 bucks on it or s0. It shows that you can make your payments and maintain your bills and credit lines and use them often.
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AKA Franky Freaking 5 liter
Advanced Engine Development
SCT dealer
Dynotuning
Engine building
916*275*8212
88 4runner on 42's
Posts: 4206 | From: Folsom | Registered: Feb 2002
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Wildfire532FB
CAFords OG
Member # 1482
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posted
What makes bad credit?
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68 Fastback
84 CJ7
94 HMMWV
95 GT
03 F350
17 Fusion Hybrid
Posts: 17580 | From: 530 | Registered: Jun 2002
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Jdub07
( O Y O )
Member # 2728
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posted
Best thing I did was got a personal loan for $5k and paid it off ASAP and make sure there are no early pay off penalties. After that I started getting offers all the time...I even got a couple cards I never applied for.
Then I got a new car and sold it two years later and paid it off. I only made like $900 on the resale of the car but my credit score jumped to 760.
Also I'm about to pay off a Patelco car loan on my mountaineer (just totaled it)...I'm sure the early payoff will help my credit score some lol.
Don't just make the min. payments...always try and pay over the min. and NEVER PAY LATE!
When my main credit card reaches $2500+ I start trippin and make 3,4,5 hundred dollar payments on it. Credit is alright I guess. I usually only use it during the holidy season. As for car parts and shit...save your $$ and just buy it.
good luck and be smart
Posts: 7282 | Registered: Apr 2003
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hidnn.o.s.
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Member # 1219
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posted
Best way to build your credit is: PAY YOUR BILLS
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R.I.P. Willie G. You are missed on this forum
Posts: 15950 | Registered: Apr 2002
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Wildfire532FB
CAFords OG
Member # 1482
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posted
The payment before last was a day late, how bad is that? I sent it 5 days before it was due...
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68 Fastback
84 CJ7
94 HMMWV
95 GT
03 F350
17 Fusion Hybrid
Posts: 17580 | From: 530 | Registered: Jun 2002
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Gnari-Garage
CAFords OG
Member # 3164
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posted
bro use your credit card, max it out and pay minimum balance for 2-3 month then pay it off, do this couple of time and you should have no problem.
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2017 McLaren 570GT
2019 Audi S5
2017 Tundra 7" Lift, 37" Tires
Posts: 4017 | From: 916-sacramento | Registered: Aug 2003
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Jdub07
( O Y O )
Member # 2728
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posted
quote:
Originally posted by Cobra5.0Jeep:
The payment before last was a day late, how bad is that? I sent it 5 days before it was due...
Depending on the credit card company there are grace periods. Also I'm sure if the envelope is post marked they wont hassle you. Most credit card companies if you call them will also work with you if you know your payment will be late and not mark you for it.
Posts: 7282 | Registered: Apr 2003
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89TRUNK
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Member # 2506
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posted
Do not max out your card, keep it under 40% of the credit line...Do not close any Credit card accounts even if you dont use them, Never pay late (pay the minimum if you have to)Avoid smaller credit cards i.e comp usa, gap, etc... Stay with the Big name credit cards VISA, Mastercard...
Posts: 1843 | From: Bay Area | Registered: Feb 2003
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71MercGT
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Member # 4305
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posted
josh, if you do end up trying to open a department store card, ill go through the application with you at my work !!
Posts: 191 | From: San Jose | Registered: Mar 2004
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JohnB
Tech Moderator
Member # 969
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posted
Best way to build it???
PAY YOUR BILLS ON TIME, DON'T MAX YOUR CREDIT LINES OUT, AND STAY SINGLE.
I can't emphasize the last part enough!! ![[Big Grin]](biggrin.gif)
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1965 Shelby Cobra
1993 Cobra
2012 F150 Raptor
2020 GT500
Posts: 6523 | From: Orlando FL/Redding CA | Registered: Mar 2002
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Yames
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Member # 5291
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posted
Hey man try and stay out of car payments, they suck. I have been doing car payments now for the past four years or so maybe less.
Anyways the car before I had my Mustang was a 02 Tacoma, I then and went and traded it in for my 2003 Mustang Mach 1. Two days ago I just went and sold my 03 Mustang which I still can't believe I did, I sold it to a dealership and ended up only coughing up 800 bucks to pay everything off. 866.62 to be exact.
Anyways I paid more then what I was suppose to for the monthly payment which was originally 366.62 a month, then I ended up throwing in a extra 100 bucks a month to get it paid off sooner.
Long behold I had to sell my car because I couldn't afford it anymore because I'm trying to purchase a home or a condo.
So rule number 1, don't purchase anything you can't afford.
Rule number 2 like so many have said, pay your bills on time.
And Rule number 3: Don't get anything with to much high interest or you'll be paying for the rest of your life.
My best opinion to you is try your best to stay out of car payments, it's not worth it. It maybe for some but for me I think it's just a pain in the ass and I hated it.
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2003 Mach 1 (Good Bye For Now)
1993 Cadillac STS 4.6L V8 (Sold)
1994 Toyota Tercel
Posts: 489 | From: Alameda | Registered: Feb 2005
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SmokeyBurnout
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Member # 5745
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posted
quote:
Originally posted by 89TRUNK:
Do not max out your card, keep it under 40% of the credit line...Do not close any Credit card accounts even if you dont use them, Never pay late (pay the minimum if you have to)Avoid smaller credit cards i.e comp usa, gap, etc... Stay with the Big name credit cards VISA, Mastercard...
Trunk is right!
As you increase your balance on your credit card, the risk that you will never pay it off increases as well. This is why he said to "keep it under 40% of the credit line" because once you go over the 40% it starts to show higher risk and the credit card company starts to report negatively on your credit.
Also, Trunk said "Do not close any Credit card accounts even if you don't use them" and here's why. The longer you have a card, the longer credit history you will have. Companies that offer credit (credit cards, auto, home mortgage, etc.) like to see a long payment history. If you have 3 credit cards, for 3 years, close them all and get 3 more new cards, you have effectively erased your credit history. You will have to build up new history, with your new cards.
The biggest no brainer is not to pay your bills late.
Also, a lot of companies that run a credit check when you open an account, like PG&E, Comcast, cell phone companies, etc. and they don't show up on your credit report. So, that means that they aren't reporting your payment history with the credit bureaus, and you're not establishing credit with these guys. Lots of people think, "I have a cell phone, pay the water bill and PG&E, I pay on time, shouldn't I have great credit?". Nope, those guys don't report it so it doesn't help your credit, but if you don't pay them and go in collections, they will report you negatively.
Here is a great article about improving your credit.
http://money.cnn.com/2002/02/15/debt/q_fivethings_creditscore/
Posts: 513 | Registered: May 2005
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N8
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Member # 6048
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posted
Becareful about getting too many inquiries on your credit. Those drop your score as well. There was new law passed recently, that you can some inquiries but if they are all in a 14 day window and result in a loan, then it is counted as just one inquiry. But the key is you have to end up with a loan and they have to all be loans of the same type. A good way to build credit is to have yourself added to someones credit card that has a good standing and pays it on time. I did that to get my credit right so I can buy my house.
Posts: 11638 | Registered: Sep 2005
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Venomized93
Founding Member
Member # 55
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posted
quote:
Originally posted by NiftyWhiteFifty:
I'm trying to build good credit. I got one credit card right after i turned 18, two years later (last summer) i tried to apply for an auto loan and they refused me for "lack of credit" the people at wells fargo financial said that they don't usually give a loan to someone who has less than three open credit lines on good standing.
So right now i have two credit cards. I pay them on time every month and try to pay the balance in full every month. I've considered getting a third credit card because of what the banker told me about having a minimum 3 open credit lines in order to qualify for a loan. Do you think this is true or should i just keep the two credit cards i have now?
I am very responsible on what i buy on credit and as i said, try to pay off the balance in full every month.
Are you still in school? If so, you need to get an AMEX. I cannot stress how much AMEX limits will not be matched. If your a student (which I have referred to friends) get this card: Here . AMEX has treated me well since day one. If you say your credit is clean and you have two cards already and are a student. Trust me, this is the card to get. Because once you get approved "Your in". After you register your card or make first payment, you credit limit will increase (doubled). When you make your 2nd or 3rd payment your credit limit will increase. I can almost gaurantee you. I referred 5 people and it's happened to them all.
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2018 Tesla Model 3 Performance
Posts: 2077 | From: San Francisco, California | Registered: Oct 2000
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modular
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Member # 6599
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posted
20 different replies, Im sure he has no idea of what to do now. You need to try and get some higher limits on your cards, a couple $200 credit cards open for 3 months wont say much. YOU DO NOT HAVE TO USE THE CREDIT CARD to get good credit from it. There is no secret to credit its all common sense. If you have 10 open accounts with zero balance verse a guy with 2 cards with money on them who looks better? Not using cards but keeping the accounts open shows lower risk than someone who does use credit. Having credit and using credit is different. Enjoy your plate theres a lot to chew on. LOL. P.S. I have 8yrs of credit work history.
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I had no idea that so many people knew everything until I joined this site.
I was prolly drunk. Get over it
***BEWARE*** COP CALLERS! Eljefe-Adower!
Posts: 548 | From: sacramento | Registered: Mar 2006
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Venomized93
Founding Member
Member # 55
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posted
I'm the same with Modular 8 years of credit. I don't have the highest limits, but I sure beat a lot of people that I know, from young to adults to people that I help in the banking world (I work at Citibank). I followed many suggestions from www.CREDITBOARDS.com (CREDIT FORUM) and has helped me to get where I am. I highly suggest you go to CREDITBAORDS.com and check it out if your serious about learning the best way to improve your credit. Just example of only my AMEX cards.
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2018 Tesla Model 3 Performance
Posts: 2077 | From: San Francisco, California | Registered: Oct 2000
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NiftyWhiteFifty
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Member # 4320
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posted
Thanks for the good advice guys. I opened a third credit account. my three credit card limits are:
$1,750 (my first student card I got when i was 18yrs old)
$1,000 (second card I've had about 6 months)
$1,500 (just opened)
None of my cards are even close to maxed out, and I will keep it that way
thanks for answering another question i had about closing credit card lines.
one more question: does requesting for a credit limit increase mean they review your credit report? meaning, does that count against you if you do it more than once in a short period of time like when you apply for a loan?
and is there anywhere you can get a credit check on your FICO score for free? should i hold off on this given my recently opened account and credit line increase request?
thanks again for all the advice
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'05 F150 4x4
Posts: 2056 | From: San Jose | Registered: Mar 2004
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