Tips for building credit

[TacoTaru]

Long story short two years ago I went and bought my fiancee's ring after having being cosigned on my car loan for a year prior to that and got a credit card through the jewelry shop approved for $1800. It was a "no interest for 15months deal" and payed the entire thing off in 10 and closed the card. I went to my bank to set up a credit card to them and they only approved me for $500. My car loan is through the same bank, and I've never been late or missed a payment on that. So when I thought I had decent credit built, my bank isn't even approving me for half of the credit card I had previously. So since it doesn't seem like I have jack, what's the best way to build it up? Just start spending normal purchases on my credit card and paying it off monthly? I don't know, but I'll be out of college in about a year and half and I don't want to leave with shitty credit and have trouble getting a loan for house/car.

[Kiyuan98]

you closed the card, so in return you have no positive history from that.

[Keno]

Spend 30% of your credit limit on each card each month and pay it off in its entirety when you get the first statement.

[spaghetti_monster]

Just having an open account with a positive payment history will build credit over time, even if you don't spend you'll have a positive history. Making purchases and paying them off regularly can help with your creditor, but I don't think that helps much with future credit deals. Having a decent income will help when applying for a loan/card with a high spending limit. Age is also a factor when receiving credit. My advice is to open an account with say Capitol One or some credit card company that doesn't charge you an annual fee and just keep it open. I say Capitol One because I have a card through them which gives me cash back rewards(its not much 1%) and I buy everything I need with that and just pay the card off before the 25day grace period avoiding any interest. A decent score can take years to get, Ive had 2 cards open now for over 10 years and have had a mortgage foreclosure and still have awesome credit.

[Keno]

Just having an open account with a positive payment history will build credit over time, even if you don't spend you'll have a positive history. Making purchases and paying them off regularly can help with your creditor, but I don't think that helps much with future credit deals. Having a decent income will help when applying for a loan/card with a high spending limit. Age is also a factor when receiving credit. My advice is to open an account with say Capitol One or some credit card company that doesn't charge you an annual fee and just keep it open. I say Capitol One because I have a card through them which gives me cash back rewards(its not much 1%) and I buy everything I need with that and just pay the card off before the 25day grace period avoiding any interest. A decent score can take years to get, Ive had 2 cards open now for over 10 years and have had a mortgage foreclosure and still have awesome credit.

No chance.

[Churchill]

Don't pay it off immediately...the banks want to make money off you, so you need to let them.

Loaning a car is a good way, also taking out loans and paying them off, even for things you may not need them for helps.

Since I was 18 until this year (22 now) I did all my purchases via credit, spent around 50,000 or so, and paid that all off in time. My cards have no debt now and I just do debit or cash. I did it all that way because I never took a loan out for a car, or had time to deal with small loans. My credit score is near maxed so that'll work, it just takes some time.

[Keno]

Don't pay it off immediately...the banks want to make money off you, so you need to let them.

Loaning a car is a good way, also taking out loans and paying them off, even for things you may not need them for helps.

Since I was 18 until this year (22 now) I did all my purchases via credit, spent around 50,000 or so, and paid that all off in time. My cards have no debt now and I just do debit or cash. I did it all that way because I never took a loan out for a car, or had time to deal with small loans. My credit score is near maxed so that'll work, it just takes some time.

That's just plain wrong. Banks don't dictate your credit score; all they do is relay information to the credit bureau (i.e. he didn't pay his statement on time, etc.) You will NEVER benefit more to pay anything other than the maximum (balancing the account).

[spaghetti_monster]

No chance.

PMI = 8)

Still carry a 690.

[Churchill]

I think I should have put it another way, but that won't work anymore. I did my credit building in the days of 0 interest, and I always paid 10% of the account at a time...nowadays you won't find that kind of deal on cards. The problem is, paying off the card causes a lot of hassle both within the bank calling you and annoying the fuck out of you and the random check because of it which does indeed drop your score. Happened to me a few times, so I stopped paying it off in full until recently.

[Melchiah]

Just having an open account with a positive payment history will build credit over time, even if you don't spend you'll have a positive history. Making purchases and paying them off regularly can help with your creditor, but I don't think that helps much with future credit deals. Having a decent income will help when applying for a loan/card with a high spending limit. Age is also a factor when receiving credit. My advice is to open an account with say Capitol One or some credit card company that doesn't charge you an annual fee and just keep it open. I say Capitol One because I have a card through them which gives me cash back rewards(its not much 1%) and I buy everything I need with that and just pay the card off before the 25day grace period avoiding any interest. A decent score can take years to get, Ive had 2 cards open now for over 10 years and have had a mortgage foreclosure and still have awesome credit.

No chance.

Awesome credit compared to? Just because you get credit card offers in the mail doesn't mean you have solid credit scores. You defaulted on a house loan... that is a huge hit to your credit score. Two of my credit scores are over 700, the other one is 675. I'd be curious as to what yours are with such a large default tacked onto them.

[Keno]

Just having an open account with a positive payment history will build credit over time, even if you don't spend you'll have a positive history. Making purchases and paying them off regularly can help with your creditor, but I don't think that helps much with future credit deals. Having a decent income will help when applying for a loan/card with a high spending limit. Age is also a factor when receiving credit. My advice is to open an account with say Capitol One or some credit card company that doesn't charge you an annual fee and just keep it open. I say Capitol One because I have a card through them which gives me cash back rewards(its not much 1%) and I buy everything I need with that and just pay the card off before the 25day grace period avoiding any interest. A decent score can take years to get, Ive had 2 cards open now for over 10 years and have had a mortgage foreclosure and still have awesome credit.

No chance.

Awesome credit compared to? Just because you get credit card offers in the mail doesn't mean you have solid credit scores. You defaulted on a house loan... that is a huge hit to your credit score. Two of my credit scores are over 700, the other one is 675. I'd be curious as to what yours are with such a large default tacked onto them.

He claims 690 but I seriously doubt it. A PMI doesn't save you from lowering your credit score when you default on your loan (at least not that I'm aware of).

[Reality]

I'm just curious why I've had a newegg preferred account for 7 months ($2000 line), and not a single payment or anything at all has been sent to the 3 credit bureaus to reflect my credit history with this company

what the **** is going on here?

[Keno]

I'm just curious why I've had a newegg preferred account for 7 months ($2000 line), and not a single payment or anything at all has been sent to the 3 credit bureaus to reflect my credit history with this company

what the **** is going on here?

Newegg preferred accounts are processed through CIT Bank, which is the bank that should be in contact with your credit bureau. Have any other accounts with them? They may be grouping your credit history.

[spaghetti_monster]

I think I should have put it another way, but that won't work anymore. I did my credit building in the days of 0 interest, and I always paid 10% of the account at a time...nowadays you won't find that kind of deal on cards. The problem is, paying off the card causes a lot of hassle both within the bank calling you and annoying the fuck out of you and the random check because of it which does indeed drop your score. Happened to me a few times, so I stopped paying it off in full until recently.

I'm Confused...Why did they hassle you? I bought all my furniture and appliances on 1yr same as cash deals, and never ever had a bank or lender hassle me for closing early. Sure they want you to not pay that whole year so they can tack on the 12months of interest you accrued, but NEVER sign a deal that forbids you from paying off early.

When I spoke to a loan officer at my bank I asked about shopping around for the best rates when trying to get my last loan. He told me that all companies make random checks, they don't hurt your score, its the companies that you apply for credit and deny you that hurt your score. Now-a-days its common for many companies to examine your score, employers, lenders, many do it.

[Melchiah]

No one is supposed to make inquiries on your credit for any reason without your express approval. That is very very illegal.

[Keno]

No one is supposed to make inquiries on your credit for any reason without your express approval. That is very very illegal.

Companies are allowed to do a credit check known as a "soft pull" which does not affect your credit history in any way.

[spaghetti_monster]

Just having an open account with a positive payment history will build credit over time, even if you don't spend you'll have a positive history. Making purchases and paying them off regularly can help with your creditor, but I don't think that helps much with future credit deals. Having a decent income will help when applying for a loan/card with a high spending limit. Age is also a factor when receiving credit. My advice is to open an account with say Capitol One or some credit card company that doesn't charge you an annual fee and just keep it open. I say Capitol One because I have a card through them which gives me cash back rewards(its not much 1%) and I buy everything I need with that and just pay the card off before the 25day grace period avoiding any interest. A decent score can take years to get, Ive had 2 cards open now for over 10 years and have had a mortgage foreclosure and still have awesome credit.

No chance.

Awesome credit compared to? Just because you get credit card offers in the mail doesn't mean you have solid credit scores. You defaulted on a house loan... that is a huge hit to your credit score. Two of my credit scores are over 700, the other one is 675. I'd be curious as to what yours are with such a large default tacked onto them.

He claims 690 but I seriously doubt it. A PMI doesn't save you from lowering your credit score when you default on your loan (at least not that I'm aware of).

believe it or not IDC, your choice. PMI don't protect your score, it protects you from defaulting. Which in a sense protects you from all the negative side effects of foreclosure. I just bought another home, I close June first. freecreditreport.com will tell you your score, check yours yourself and pay the $5 or w/e it costs.

Not gonna argue and try to prove anything to anyone on the internet, got better things to do.

I gave the OP my advice and he can take it if he/she wants, its good advice and works for anyone who isn't a complete idiot with credit cards.

[Melchiah]

No one is supposed to make inquiries on your credit for any reason without your express approval. That is very very illegal.

Companies are allowed to do a credit check known as a "soft pull" which does not affect your credit history in any way.

The inquiries that affect the score were what I was talking about.

[Keno]

[quote=spaghetti_monster]

Just having an open account with a positive payment history will build credit over time, even if you don't spend you'll have a positive history. Making purchases and paying them off regularly can help with your creditor, but I don't think that helps much with future credit deals. Having a decent income will help when applying for a loan/card with a high spending limit. Age is also a factor when receiving credit. My advice is to open an account with say Capitol One or some credit card company that doesn't charge you an annual fee and just keep it open. I say Capitol One because I have a card through them which gives me cash back rewards(its not much 1%) and I buy everything I need with that and just pay the card off before the 25day grace period avoiding any interest. A decent score can take years to get, Ive had 2 cards open now for over 10 years and have had a mortgage foreclosure and still have awesome credit.

No chance.

Awesome credit compared to? Just because you get credit card offers in the mail doesn't mean you have solid credit scores. You defaulted on a house loan... that is a huge hit to your credit score. Two of my credit scores are over 700, the other one is 675. I'd be curious as to what yours are with such a large default tacked onto them.

He claims 690 but I seriously doubt it. A PMI doesn't save you from lowering your credit score when you default on your loan (at least not that I'm aware of).

believe it or not IDC, your choice. PMI don't protect your score, it protects you from defaulting. Which in a sense protects you from all the negative side effects of foreclosure. I just bought another home, I close June first. freecreditreport.com will tell you your score, check yours yourself and pay the $5 or w/e it costs.

Not gonna argue and try to prove anything to anyone on the internet, got better things to do.

I gave the OP my advice and he can take it if he/she wants, its good advice and works for anyone who isn't a complete idiot with credit cards.[/quote:2hwy79kq]

A PMI does NOT protect you from defaulting. A PMI protects your lender should you default on your payments. This is seen by the credit bureau in a negative light (hey, you missed your payments...) and your score will go down.

[spaghetti_monster]

[quote=Keno]

Just having an open account with a positive payment history will build credit over time, even if you don't spend you'll have a positive history. Making purchases and paying them off regularly can help with your creditor, but I don't think that helps much with future credit deals. Having a decent income will help when applying for a loan/card with a high spending limit. Age is also a factor when receiving credit. My advice is to open an account with say Capitol One or some credit card company that doesn't charge you an annual fee and just keep it open. I say Capitol One because I have a card through them which gives me cash back rewards(its not much 1%) and I buy everything I need with that and just pay the card off before the 25day grace period avoiding any interest. A decent score can take years to get, Ive had 2 cards open now for over 10 years and have had a mortgage foreclosure and still have awesome credit.

No chance.

Awesome credit compared to? Just because you get credit card offers in the mail doesn't mean you have solid credit scores. You defaulted on a house loan... that is a huge hit to your credit score. Two of my credit scores are over 700, the other one is 675. I'd be curious as to what yours are with such a large default tacked onto them.

He claims 690 but I seriously doubt it. A PMI doesn't save you from lowering your credit score when you default on your loan (at least not that I'm aware of).

believe it or not IDC, your choice. PMI don't protect your score, it protects you from defaulting. Which in a sense protects you from all the negative side effects of foreclosure. I just bought another home, I close June first. freecreditreport.com will tell you your score, check yours yourself and pay the $5 or w/e it costs.

Not gonna argue and try to prove anything to anyone on the internet, got better things to do.

I gave the OP my advice and he can take it if he/she wants, its good advice and works for anyone who isn't a complete idiot with credit cards.

A PMI does NOT protect you from defaulting. A PMI protects your lender should you default on your payments. This is seen by the credit bureau in a negative light (hey, you missed your payments...) and your score will go down.[/quote:kn72o1oo]

Ok your right. I worded my last post wrong. PMI protects your lender(not me). But, my report shows no chain of missed payments, and no foreclosure. Maybe they fucked up, idk... I called my bank and told them that shit hit the fan and my payments were going to cease, lender called PMI company and within 45days they had took over the loan, a sheriffs sale took place and I was clear. Guess I was lucky. Never has the previous loan hindered my ability to get credit.