Building Personal Credit?
hi, i have been trying to build my credit since im young and do not have much established. but i cant find one credit card company that will give me a card. not even a student card or gas card. any suggestions.
also since this has been my first year in buisiness, after i file my taxs will my credit report show how much income i have made this year and will that help get me a credit card.
oh yeah since im self imployed i do not have a stated monthly income, will this also be a major factor.[ Edited by ZinOrganization on Date 01/20/2005 ]
Open up a bank account with a bank and get a loan secured line of credit. Secured by the amount of money you have in the account with them. After a while they will give you a unsecured lined of credit it.
Hi Zin,
Do you have any cd's (certificates of deposit) with your bank? If not, go to the bank, tell them you want to open up a certificate of deposit with a grand or so, at the same transaction tell them that you also want to get a loan against it. 9 times out of 10 it is going to be approved because it is a secured line of credit.
Also, ask someone you trust like Mom to add you as and authorized user to one of her credit cards. Make sure with the creditor, that they will report you being a user to the bureaus, to be sure of this usually they will ask you for your ssn. Make sure this credit card is one that she pays every month on time and has atleast 70% credit available on it. The bereus hate cards that are maxed out, this drops your score. Try this first. It is the easiest way to establish credit automaticly, you can have credit within days using this method. You will be as good as your credit, so protect it. Good luck!
Try getting a secured credit card. You make a deposit with the credit card company (say $500) and they give you a credit card with a $500 limit. No risk for them and you get a card!
thank you every one for your help. this is an amazing world we live in. i can make hundreds of thousands of dollars a year and not be able to aquire a credit card but yet the people who im buying houses from who have credit card leins on there properties and max them out to the limits are the first people to receive them, amazing place.
on a more positive note, yes i will try to get added onto my fathers amex which he pays off the balance every single month or actually i do because i use it more then him lol. if they wont do it so that it will also effect my credit then i will go for the secured credit card.
thanks again for all your replies.
Zin:
I will briefly (briefly is difficult for me! in fact, forget briefly) tell you what worked for me. In 5 years I went from ZERO credit, to banks falling over themselves to earn my business, here's how I did it. I opened a $500 secured loan from a local credit union on a 12 month term. A full year DOES show payment consistency, so try hard not pay it in full in the 6th month. I gave the loan officer $500 to secure my new loan with (think of this $500 as a car that you are putting up for collateral --same concept pretty much). They didn't even need to pull my credit since they had virtually no risk (and some banks don't need to pull either). They approved the loan with an extremely low rate since again, they had no risk. They gave me a check for my new loan and essentially I walked out with my original $500, committed to a $40ish a month payment for 12 months, while paying les than $16 in interest over the entire year. Can't complain one bit. Well spent in my opinion.
I waited 4 months, then applied for a Providian credit card (this was when they were doing high risk biz, which I don't think they are doing anymore, but there are plenty of others. Email me if you want names). I was approved for a $1,000 limit! I was pretty happy since I had been declined by AMEX, Discover and Circuit City and any other store that offered a card.
I maxed out the Providian card, paid it off just ‘by luck’ before applying for a new car loan from the same credit union. They approved the car loan, and while I was there...and since my credit had already been pulled, I requested a C.C. They asked me how much of a limit I wanted and I told them a modest $1,500, hoping I wouldn't be declined…again!. They approved me for $3,000 to my surprise! This is all within a 10 month period from starting the secured loan! A few months after that, I opened about 3 or 4 C.Cs, each with increasingly better terms & benefits. I learned the hard way that maxing out any card can be bad for all of your cards since creditors check up on consumers nearly monthly for an account review (they pull the credit on the back end, called a ‘soft-pull’, that’s an inquiry no other creditor can see).
Originally, I thought about getting a secured credit card since I really wanted one just for the “perceived” status (this is before everyone had debit cards). I decided on the installment loan for a few reasons:
1) A secured credit card is still just that, a secured credit card. A few of the many downfalls are that if the secured C.C. company lists your limit and it is only say… $300, the next time you apply for another card from another company, they will look at that limit and use it determine the limit on your new card (They seem to try hard to stay competetive with each other). Fees! I researched these in great depth and never found, or heard of anyone getting good terms, credit limit increases, perks, even good service & accurate statements. If you pay well for 12 months, I think credit is deserved! Maybe?! I'd love to hear about a secured C.C. that opened the "credit floodgates" for someone...Anyone?
2) On credit bureaus, the terms of any account are typically spelled out, so everyone would know that you have, or have had a “secured” credit card. I’m not 100% that this will hurt chances of any future approvals from other companies, but I can tell you that it’s not good.
3) A secured C.C will always be visible to an actual person underwriting your credit for loans. A secured C.C suggests new credit, or bad credit and DOES have a negative stigma.
My secured loan showed as a “PAID” account after the 12 months were up, and nobody ever could tell from my credit bureau that I secured it with cash instead of a piece of equipment, car, anything. My first PIF loan and it really did help my credit.
Zin: It is great to be American! We can do anything we want to do in the world as long as we know the rules of the game(s) we are playing.
P.S. You may want to ask Amex to add you to your Dad's account as an "authorized user". That way they may not pull your credit and possibly deny you.
Good luck to you.
thanks nathan, advise was well taken. i will head to the bank first thing monday morn. and see what they can do for me regarding a secured loan. providing the interest is as low as yours was, or close.
one more question. as far as applying for credit cards when they pull your credit and deny you. is it a hard pull which affects my score or soft. thanks
Go to www.creditboards.com to learn more than you want to know about building credit.
Zin:
A hard inquiry is typically initiated by an applicant seeking new credit. It can be viewed by any creditor who pulls your credit for the following two years. This is some info I got from another site. Hopefully this helps.
"Soft inquiries do not affect the credit score - soft inquiries include:
Consumers accessing their own credit report through the credit reporting agencies or the monitoring services out there reselling credit reports. These appear only on the consumer report.
Pre-screen and opt-in solicitation that lenders send out, if a consumer completes such application and the lender pulls a credit report this IS a soft hit because it was not a transaction initiated by the consumer. These appear only on consumer report.
Applications from consumers for Insurance, Property Rental, or Employment, these can show on the creditors copy of the report, but they are not affecting the credit scores.
Periodic account reviews initiated by creditors on their customers, these inquiries should only appear to the consumer on their credit report and not the creditors version. "