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Building Credit.

Oats

Oats

Bluelighter
Joined
Sep 25, 2011
Messages
139
Location
California
I recently turned 18 and I need to start establishing credit. But I don't want to attempt to build credit but then fall into debt because I don't work often and I don't get paid very much either.
My mother recommend that I seek a $200.00 loan and with the $200.00 I get from the loan, I don't spend it-instead I use it to pay back the loan. And somehow this will build my credit and also show that I am responsible with payments. I guess I can be considered a "tight-wad". I am aware that I don't have much money to spend so basically I only spend money on what I exactly need and sometimes I will treat myself or buy my boyfriend a gift on those occasions.
Do you think the loan idea is a good one? How did you build your credit?
 
I took out a small student credit card with a $2000 credit limit and had my name on several utilities (electricity, gas, telephone) accounts once I had moved out on my own.

I was able to keep all of these accounts in good order and eventually it led to my establishing a good credit history.

I definitely recommend cultivating a good credit history as early as possible, even if it involves a small credit card that you won't use outside of emergencies. Too often people find they need a line of credit and discover they have no prior records of payment to be considered on.
 
credit cards, hmm im not too sure about those since people fall into debt faster with those. but i am pretty responsible with money so i'd only use my credit card on gas...ill talk with my bank.
 
CHiLD-0F-THE-BEAT said:
I took out a small student credit card with a $2000 credit limit and had my name on several utilities (electricity, gas, telephone) accounts once I had moved out on my own.

I was able to keep all of these accounts in good order and eventually it led to my establishing a good credit history.

I definitely recommend cultivating a good credit history as early as possible, even if it involves a small credit card that you won't use outside of emergencies. Too often people find they need a line of credit and discover they have no prior records of payment to be considered on.
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This is excellent advice. I have a credit card with a very low limit that I rarely use. I'm talking once every 6 to 9 months. And I tell my father about the purchase so he pays it off right away. I also have all the utilities in my name for my house I'm living in now and did the same thing at my former residence for the past three years.

It takes time, but if you take responsibilities for money matters, its quite easy to build credit.
 
Oats said:
credit cards, hmm im not too sure about those since people fall into debt faster with those. but i am pretty responsible with money so i'd only use my credit card on gas...ill talk with my bank.
Click to expand...


People fall into debt with credit card if they use them like idiots or are forced to live off of them because they get laid off. In order to build credit all you have to do is make one charge a month and pay it off on time, $10 if you want. Pay your bill as soon as you get it.
 
Ask your parents if they can put you on as an "authorized user" on their credit cards, if they have good credit. If they don't have good credit, don't bother. But, if they do, and they put you on as an "authorized user" (even if you never SEE their card, let alone use it), their credit score will automatically impact yours. :)

I built up my credit by being listed as an "authorized" user on one or two of my mom's credit cards. I also built up credit by having a cell phone and paying that bill on time each and every month. Also, having a bank account that's in good standing builds credit, or so I've been told--So, I've had that since I was 16 or 17. I also got a credit card and have had that since I was 18--I use it like I would cash and pay off the bill on time each and every month. Had another credit card just for gas for a couple years, but I've since gotten rid of that as it really leaves me tied to a particular gas station. I also paid off a student loan (was only two grand) in one lump sum long before it was due, which I'm sure helps.

I don't know my credit score, but I know it's pretty good--My brother (also an "authorized user" on a card he's never seen or used) had a credit check done before getting approved for his mortgage, and he was floored by how good his credit was. It was heavily influenced by my mom's.

For other tips, I highly suggest checking out what Suze Orman has to say. She's on CNBC in the evenings on Saturdays. There's also Clark Howard, who offers some pretty solid financial advice.

Best of luck! :)
 
Suze Orman, the popular financial guru whose advice works fantastically as long as you haven't really screwed up yet.

Typical lessons:

1.) Don't buy the $10,000 vacation yet; pay off your credit cards!
2.) You are spending most of your gigantic income on miscellaneous purchases. Stop that!
3.) Your boyfriend wants to get married but he's unemployed with $100,000 in debt. Get a pre-nup!
4.) You have a kid; start saving for college!
 
My parents piggybacked me (they added my name as a user) on a couple of their credit cards at age 16 although I never used them nor actually had a card. Age 17, they requested I apply for a Sears credit card. They bought stuff on it and paid it. Age 18, there was an offer on a new credit card at national bank. I applied for that on my dad's advice and used it occasionally. I have always been good at managing credit cards. The credit limit on that card is now $25,000. They suggested when I had zero balance on cards to ask for a credit increase. This increases your credit to debt ratio...if you don't have a higher debt, of course.

Get a credit card (instead of the loan) and use it for things you need and that you already have cash for. Pay the balance off monthly.
 
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