How the fudge do you build up credit the proper way?
H asked:
I’m a college student and I’m trying to build credit. I want to get a new car later on so I’m trying to build up good credit. People tell me to open up credit card accounts, but to only spend like twenty dollars on each and leave it. Any advice on how to build good credit?
I’m a college student and I’m trying to build credit. I want to get a new car later on so I’m trying to build up good credit. People tell me to open up credit card accounts, but to only spend like twenty dollars on each and leave it. Any advice on how to build good credit?
at your age credit card is the easiest way to go. But I suggest making sure it’s only one credit card not multiples and regardless of whether your spend 20 bucks or 400 bucks make sure you can pay it off in full every month by the payment due date. You can’t afford to get yourself in over your head where you can’t pay your credit card bill each month. Unfortunately with students once you get a hold of a credit card the banks will usually continually increase your your limits and allow you to go over because they figure that mommy and daddy will bail you out. Which sadly a lot of parents do..but there’s some people who’s parents won’t and you get stuck in a really bad situation. Opening up a credit card and making timely payments for at least the minimum due and NEVER going over your credit limit will help you achieve your goal of getting a car loan later on. Bare in mind that it takes a lot longer to get good credit then it takes to lose your good credit.
Join your local Credit union and develop a regular habit of savings
You can even have a portion of your pay check direct deposited into your savings account each payday.
After you have established this, apply for a small loan, several banks have beginner loans for 1st time borrowers. 500-1000.00
Take the money and put it in your Savings account.
Earn interest while you make timely payments each month from that account. Pay off timely and quickly.
Pay extra each time.
then the next time apply for a small car loan and see if you get PRE APPROVED for a certain amount , then go shopping and buy a better car… just remember taxes and insurance…
My Credit union allowed me to break my payments into small weekly payments of $75.00 which they automatically took out of my savings
account, I had $100.00 each week direct deposited to my Savings account. $25.00 for savings, rest for Car payment, never had to worry about a car payment being late or writing a check for $300.00
Very simple and builds good credit.. WITHOUT bad debt like a CREDIT CARD. Then when I did get a credit card I got it through my
Credit Union at a lower Interest rate, I tried not to carry much of a balance, and I paid it off every month, I used for Gas sometimes or
gifts but I didn’t run it up.
It was just for Emergencies, the problem is people think, OH I’ll just Charge it and forget they have to pay for it and get in trouble.
Depends on how much you want to build and fast you need it. You can have AAA credit in as little as 10-14 days if your willing to pay for it. Or to build it takes anywhere from 6 months to 1 yr but it depends if you have a job a co-signer or can show a letter of support. All these things affect loans. For more information look at website.
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