How in the world can I build up my credit?
Answers:
http://financialplan.about.com/cs/credit...
you can build up credit by having a cell phone and making sure you pay it on time
A good place to start your credit is with department credit cards like JC Penney, Sears, Marshall Fields, etc. They are normally willing to extend you very minimal amounts of credit, say $300. This will allow you to borrow and pay on time. The driver for their willingness to loan you money is because you are limited to making purchases of their merchandise which reduces their overall risk. MC/Visa will be more difficult to obtain. This will help your credit quickly and where most recent high school grads start. Good luck!
Your credit score, or FICO, is based on a complicated ands ecretive formula that looks at your current income, home ownership, and payment history to determine your risk level. It is a good idea to review your score and report at least once a year, and annualcreditreport.com is the safest and best place to do this.
There is also a lengthy and informative report on the Credit Trap page of the site listed below.
Try First Premier Bank or Orchard Bank. They are easy credit cards to get with no credit. Good Luck.
First, good for you for all the work you've done to establish credit history.
If you have no open credit card at all, and you've been denied unsecured (prime) credit cards, you might try a secured credit card from Orchard Bank (it has the fewest and lowest fees) or a semi-secured card from Bank of America ($99 security deposit for a $500 credit limit)
Before you sign the application (or click Submit), call the credit card issuer and ask them, "Which of the credit reporting agencies do you report to?" If they don't answer, "All 3, Experian, Equifax and TransUnion" then find another card. You need to develop history at all 3 agencies.
Note: With a secured credit card, you still must make a payment on time every time. Do not assume that the bank will use your security deposit to cover your bill. It's about YOU acting responsibly and paying on time month after month.
As you build ontime payment history without a miss, you'll boost the 35% of your score that concerns payment history. If you open a new credit card, make one small NECESSARY purchase (gasoline, groceries, a utility bill on auto-pay through the credit card) each month and pay it off in full each month. To score max points, you do NOT need to carry a balance and thus pay finance charges. Just keep making that new purchase, waiting for the billing period to close and paying it off in full the next month before the due date.
If your credit card is secured, you can just pay the start-up fees the first month. After 6 consecutive ontime payments-in-full for 6 consecutive months, ask to have your card converted to unsecured, have your security deposit returned with interest, and have your annual fee waived. If the company refuses, try again at 9 months and 12 months. The company may convert you to unsecured automatically. If your card goes unsecured and you have no more fees charged to it, leave it open.
30% of your score is credit utilization: how much of your credit limit is used up by your balance? On each revolving account, you need to keep your balance below 30% of your credit limit, or you will hurt your FICO score. For example, if you have a $200 credit limit, you must not have a balance higher than $60, which is 30% of $200. Do NOT close a paid off cc account. They also look at total utilization: they total up all your balances, and all your credit limits. That total percentage utilization must be kept below 30% of total credit limits. Close that paid off account, and you'll take away $0 in total balance, but you'll take away $$$ in credit limit, and up goes your total utilization.
10% of your FICO score is credit mix: what types of credit accounts do you have listed as open? The good types of credit are: mortgage, secured auto loan, department store card (Macy's, Home Depot, etc.) and major cc (V, MC, AmEx, Disc). Ideally you want to show good behavior in one open account of each good type. The bad types are: payday loans, personal finance loans used for purposes of getting cash advances, checking account overdraft loans and secured, sub-prime credit cards. One exception: if you have no open credit card, and you can't get a prime credit card, a secured card is ok. The point: you need to build good history, not just prevent the bad. But if you open more than two accounts of each type, or keep balances on more than about 6 accounts, you will lose points for too many open accounts or too many accounts having positive balances.
15% of your FICO score is for length of credit history, the longer, the better. The average credit user has an oldest open account that has been open for 14 years. Where do you fit on this scale? They also score you on the average length of time all your open accounts have been open. So if you close a paid off account, you'll hurt your score because (1) you lose an old account and (2) the average age of your accounts could go down.
Do not assume that you have no credit history at all. You could have unknown identity theft or file merging issues (someone else's history in your credit history because of mistaken identity, especially if you are a "Jr"). Dispute derogatory but false information on your credit reports. Get one free credit report per year from each of the 3 major Credit Reporting Agencies (CRAs) at
http://www.annualcreditreport.
The above site is endorsed by the US Federal Trade Commission. See source, below.
I have no legal or financial interest in any of the firms mentioned, above.
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Begin with opening a checking account in your name. This is the first step towards acquaintance with banking and financial institutions. The idea is to open a bank account as early as possible, keep it in good standing, and it should reflect financial stability. And yes, the bank account should be in your name. Don't open and close bank accounts too frequently as this is perceived wrongly by credit reporting agencies. If you open a savings account, the money deposited in it can be used for security purpose when you want a loan.
2. Start paying the bills with your name
You need a mobile right? Go ahead and get a connection in your name and pay the bills so that they build credibility to your name. The way you pay your bills matter the most. If you pay everything on time and in full, a good credit history is waiting for you. The converse is also true. If you start faltering on your bill payments it will reflect badly on your credit history and you will definitely face problems while getting good credit cards and loans on cheaper terms. Read more from at:http://www.credit-card-gallery.com/artic...
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