Beginning To Build Credit.

Comments(5)

• 
  Auream5th September, 2003

  This can be a fairly expensive way to build credit, because if you're constantly paying off one card with the other, the only way I know to do that is to use those "convenience checks" they send you. They always have a flat fee (usually 3-5% of the check amount) plus a higher interest rate (by 5-10%) than normal purchases.
  
  You can always do what I did (I'm 20 also) and sell things on eBay. If you find a good enough supplier or deals, or pick a specific niche, you can make a nice second income. Plus, if you buy all your stuff on a credit card, you can pay it back in full at the end of every month with the proceeds from your sales, and still have some money left over.
  
  Of course, it isn't easy, you have to learn how to find good deals, make good, eye-catching auctions, and deal with bidders who are sometimes not so bright or are outright scammers. But in the end I think it is definitely a fun and profitable venture, and it was a good way for me to build up credit.
  
  I don't know what my credit score is (never bothered to check) but I've had a credit card since I was 16 (cosigned) and I now have 5 that get paid off in full every month, totalling over $20,000 in unsecured credit (not that I ever actually use that much). And I get new 0% for 1 year or various other credit card offers in the mail almost daily. I've finally stumbled onto this site and decided to get into REI soon, and my good credit score will hopefully be an asset.

• 
  SavvyYoungster5th September, 2003

  Quote:
  On 2003-09-05 11:45, KGJC wrote:
  Hi, everyone. Well as the title of this puts things, I am just beginning with my credit score. I am 20, and looking to (dun, dun, dun, dun!) get into REI. Sooner is better in most (it is often argued all cases but I have not been around long enough to make that statement <IMG SRC="images/forum/smilies/icon_wink.gif"> ) situations, and I will need great credit to become truly successful in RE, or so it seems.
  
  This is my plan, see if it's got what it takes: I have one secured credit card with Chase, and I plan on obtaining two more with major companies (probably going to have to be secured). What my idea here is, is to use Card A, to Pay the Bill on Card B, and Card C, to pay the Bill on Card B. I pay C, from my checking like I would have to do for the other two, if I was not working this plan. Is this a good idea? Not to sound boastful, but it's the best thing I could come up with.
  
  Thanks so much, for reading all that.
  
  
  I think that you misunderstand and think that credit ACTIVITY builds credit. It is actually credit HISTORY that builds credit.
  
  I believe there are 5 things that affect your score.
  
  1. Time. The longer your credit history the better. That is why you are recommened to get a credit card early.
  
  2. Prompt Payment. Obviously missing payments is bad. But missing one payment in 20 years won't impact that much.
  
  3. Credit Outstanding vs Total Credit. You definately shouldn't be maxed out on your credit, this hurts your credit score.
  
  4. Types of Credit. From Mortgages which are the best to "Revolving Credit" (Credit Cards) which are the worst. You score is partially based on the type of credit you are using. All credit is not created equal.
  
  5. I forgot number 5. Actually, I'm at work so I may have got them all wrong.
  
  I would say that your juggling will most likely end in you missing a payment and ruining your credit. Just get one card for a modest limit and use it as needed. Then get a car loan. Then a house loan. Make all your payments and you'll be fine.

• 
  2000rock7th September, 2003

  KGJC,
  
  ReadThis....
  
  http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=334
  
  LearnIt~LoveIt~LiveIt....
  
  Sorry...
  There is NO easy way!
  
  
  ....as always,
  
  
  GoodInvesting, Rocky

• 
  7th September, 2003

  Thanks alot for the advice. I already read the article, and I plan to follow it. I now see that there is no "trick" to good credit, just due dilligence. Thanks again.

• 
  mussetter7th September, 2003

  Actually, KGJC, most CC companies won't let you pay your bill with another card.
  
  I tried one time to pay my Visa bill with my bank card, which is also a Visa and takes money out of my checking. They said they can't pay a bill by CC. Isn't that funny?
  
  The best way to build credit is just to pay your bills and pay them on time.
  
  Please don't go out and buy things on credit that you don't need just to 'build' your credit. It'll overwhelm you in the end.
  
  I would talk to a local mortgage broker and find out what you would need to qualify for 'first time buyers' programs. Sometimes, all you need for them is to prove that you've paid your rent, elec, phone, etc. on time for the past year.
  
  Anyway, it won't cost you anything to find out and if they run a credit check, that won't hurt you either (Because if they can't do anything for you now, it's going to be at least a year before they can.)
  
  If they can pre-qualify you for a certain amount, then there's your answer. Go shopping.
  
  If you've got a good deal (For example, a repo that needs rehabbing) and the end loan after rehab is going to be less than 75-80% of the finished value of the property, you could probably find a hard money lender to finance you.
  
  A hard money lender usually charges 18+% and 8-11 points to loan you the money, but they normally don't have income or credit checks. As long as you can prove to them that you will spend their money wisely, you're in.
  
  Good luck
  
  Ronnie