So where do I take it from here? I have no debt other than a carpayment. What is the best way to build strong credit with out using credit cards? Any really good suggestions?
2006-06-15 08:29:54 · 15 answers · asked by ~ Rio ~ 2 in Business & Finance ➔ Credit
Forget about building credit. The car payment will help you do that. Now that you only have the car payment left, it's time for some goal setting.
Do you want a house some day? Have you thought about when you'll retire and how you'll be able to do it? Do you have any emergency savings? These are all things you need to think about.
If you really want to build up your credit a bit more, go get a credit card that pays cash back. I have a Citi Dividend Platinum Select Mastercard. It pays back 5% on gas, supermarket and drugstore purchases, 1% on everything else. Use that to only buy things you would have purchased anyway and pay of the balance religiously every month. If you're going to buy something to live, you might as well get some money back for it.
In the meantime, start thinking about where you want to be in a few years. With clear goals, it's much easier to figure what to do because you'll know what your target is. Good luck!
2006-06-15 17:53:26 · answer #1 · answered by VinTek 7 · 3⤊ 0⤋
Well, you need to be certain that you keep up with your carpayment, for starters.
Secondly, what you should do is use one or two of your credit cards for SMALL purchases throughout the month. Then be CERTAIN to pay it off entirely every month.
Other options would be to take out new credit cards. However, you can't build credit without USING credit, so you'll need to actually use some each month and establish a record as a "good" payer. After a couple of years of this, your credit will go up to where you deserve it to be.
2006-06-15 15:34:09 · answer #2 · answered by Goose&Tonic 6 · 0⤊ 0⤋
Congratulations on being debt free!! That's a difficult feat in today's world. Unfortunately, in most cases, to build your credit score you will have to have some sort of revolving credit. Sure a house or mortgage payment helps but your best bet is to have 1 major credit card, and one revolving card such as a Macy's card. The key is to periodically use them with small amounts and then pay them off when the bill arrives. Also, and this is proven, you build credit by having credit - but you build even more credit by never using it. I followed this plan for 12 months after taking a finance course in college - my credit score jumped by 35 points...which is a lot in under 12 months. Also, the last thing to do is to make sure your car payment is paid each month, on time...and if there's any means to paying it off sooner, the better you will be viewed in the eyes of creditors.
2006-06-15 16:25:41 · answer #3 · answered by SBean_29 3 · 0⤊ 0⤋
Honestly I think credit card is probably the best way to build strong credit when you pay your obligations on-time (never, ever be late!). If I were you, I'd continue using the credit card, only this time I will PAY IN-FULL each time I get my monthly statement. The cc companies like this because they look at the gap between your debt and your credit limit... if you have a wide gap (huge credit limit but small debt, your score will improve)... so don't completely stop using your cc, just pay them in-full and pay them on-time!
If you don't like the idea of maintaining your cc, how about getting a small loan for a planned/future purchase... like laptop, TV, etc.?
2006-06-15 15:53:19 · answer #4 · answered by Bobbie 3 · 0⤊ 0⤋
You have already built your credit. You have existing credit cards w/ zero balances, right? Now, you have to determine your available credit vs. income vs. existing debt. This is the tricky part of maximizing your credit score. No need to use your credit cards anytime in the near future.
All you need to do is make sure your income easily supports the all the available credit you currently have and then maintain that delicate balance.
Don't close any cards, just lower limits if necessary to create a proper Debt/income ratio and credit ratio.
2006-06-17 18:19:56 · answer #5 · answered by Paula M 5 · 0⤊ 0⤋
Congratulations! Most of us are unable to do this so you are to be commended! What you could do is use the credit card monthly for the house hold items, gas, restaurants and other things then just pay it off each month when the statement comes in! This way you are still using it monthly and maintaining a zero balance with no interest payments.
2006-06-16 16:57:20 · answer #6 · answered by Ekimo 5 · 0⤊ 0⤋
Congrats on getting out of debt with your credit cards!!!! Don't ever get another one! lol. That's something millions and millions of people are trying to do. If you can continue to be responsible with your credit card, purchase small things that you can pay off quickly. Make all your payments on time and pay more than the minimum if you can. Otherwise, just pat yourself on the back and feel great about being out of debt.
2006-06-15 15:34:56 · answer #7 · answered by Jenn 6 · 0⤊ 0⤋
The more credit cards u have the worse your credit. Get rid of all but one. When you charge stuff on the one pay it off right away. Pay your own phone bill or something like it to build up more credit .
2006-06-15 15:34:30 · answer #8 · answered by Roly 2 · 0⤊ 0⤋
basically you need three trade lines (lines of credit). If your credit was good prior to the payoff and you have two other sources (along with the car) say utility bills. your credit is good. If you are building credit buy a house, or rent an apartment keep records you should be fine in about 12 mo.
2006-06-15 15:35:05 · answer #9 · answered by the_iceman54 1 · 0⤊ 0⤋
Just continue to pay your car note on time and if you can trust yourself with a credit card charge small things and pay it off in full. Congrats on clearing your debt, I'm working on the same thing
2006-06-15 15:35:37 · answer #10 · answered by Capricorn82 3 · 0⤊ 0⤋