Young And Trying To Establish Credit.
I would like to be able to have the best credit I could have by the time I graduate from college (3-4 years) to help me with REI. I have money in assorted stocks and bonds but other then that, I have nothing in my name other then a checking and savings account. What could I do other then getting a mortgage on a house I dont need to establish some sort of credit and what results will I see from it?
Travis,
If you have student loans - pay them on time, they will show on your credit record.
Make sure you do not "live beyond your means".
If you want to get more credit, ask about a secured signature loan. Put $500.00 in an account, borrow the $500.00 and pay it back in six months. You can do this because you set up a checking account with the same bank and have them automatically pay your payment every month from the original money. It takes some time, but if you do that twice a year for two years with no problems - you get good credit - if it is reported to the credit bureaus. You can call the bank and ask them to report it if they do not.
Stormy[ Edited by stormblade on Date 06/29/2003 ]
Get a credit card and use it periodically. Obtain a small balance on it and pay the minimum balance. Use it cautiosly, of course, but as long as you pay on time, it will get your credit rolling.
You're wise to think ahead.
One other thing....everytime you fill out a card from a credit card company on campus for a free t-shirt, they're going to pull your credit. to many pulls, and it starts to negativly affect it.
Consider finding a good deal on a place to buy, and renting it out to friends. Get some equity while you're in school.
TravisByrd,
Like others have said, it's good you're looking ahead. Something interesting to note, it would be easier to get a credit card while in college than after.
What is this you might ask? Well, credit card know that most college age people are irresponsible. Also, they know mommy and daddy will probably end up bailing them out.
Once you are out of college and on your own with your own job, you are likely to be more responsible, so less likely to run up huge balances.
I heard this on a night talk show one night while on a trip. I can't remember the name of the show, but it was a show on how to save money, build/repair your credit, etc...
Like others have said, maintain a small balance and pay the minimum. One of the credit cards I have, the only one with a balance, I have setup for automatic payments. I can choose from full payments, a fixed payment, or minimum. I chose minimum, then pay extra when I get a chance.
If I chose the fixed amount, then it would automatically do whichever is small, fixed or minimum.
--Mike
Hi, Travis...what everyone says is true about the credit cards. and no one wants to loan you money if you need it, no one will give you a job unless you have experience and you can't get experience unless you have a job and credit has a good and bad side. 1) you do need to have a credit card to prove you have that credit available to you, but never charge up to the balance and never pay minimum payments, do not pay it off at the end of the month always, but always pay on time, pay several times a month on line, that helps you with interest. 2) The secured loan from a bank or credit union is a great way to establish a relationship with a bank or credit union that will help you later. 3) Since your goal is to get into REI, then what better time to start than now, all forms of education only helps us. Maybe you can start a college level investing club with an area mentors and maybe you will need a cosigner as assumable mortgages are hard to come by these days and start small, maybe do some rehab and either L/O the property or sell outright. 4) Maybe do some birddogging for someone in trade for being a mentor, but still get the education you need from the experts. In this day and time, you have to be multi talented and able to switch gears to accomodate the ever changing markets & technology. Most of all....don't kid yourself that luck will be on your side...you make things happen and you must be curious, only the curious will come out on top. Last but not least, never give up on your dreams, practicality requires you set it aside sometimes but come back to it, revise it if need be but forge on. Okay the speech is over....I wish you the best....
Thanks for the information. Exactly the response I was looking for.