How to start building credit???

Question

I am a college student and I want to build my credit so that I can apply for a car loan without my parents. I know that if I get a credit card and use that and make the monthly payments, this would build my credit but how can i be sure that this will build my credit?

Answer 1

Hello, If you have a checking account try your bank. you must have at least three months of good credit to qualify for a car. They also have first time buyers program, where you may get away without a co-signer. Alot of credit companies are anxious to supply college students with credit. You will find applications in the dorms, the library, at stores around town. And before you know it you may have 10 credit cards and become in debt. But don't get to excited start out slow. Your young. One card is sufficient. Negotiate your percentage rate, and Pay your bill off every month once you establish the credit. Don't get carried away. You will need your credit post graduation for employment, home and Auto. So please be careful. And if you cannot afford a certain brand of vehicle don't get it, keep your payments at a reasonable level, under 250. Good luck. Pay your bills, and pass your classes.
You'll be fine.

Answer 2

Every month a credit card company must report a payment or lack there of to the three credit bureas.

Get "guerilla credit repair".

Get all three of your credit reports. Contact transunion, experian and equifax. Make sure all the information is correct and that all the accounts on there are in fact yours. If there are any errors at all, get them corrected. This may take a while.

Satisfy any judgements or debts you have.

Go to bankrate.com. They have good articles for starting off your credit. If you have no credit at all or some problems - you might have to get a "secured" card. A normal credit card gives you a line of credit. A secured card is where you put up your own money, pay an annual fee and can't take out any more than you put up. The rates are high, so if you don't pay it off every month you will incur interest charges on the very money you put up! However, if you pay your bills on time for a year you will get a history.

You need to build a history. You need at least 4 lines of credit open that you have paid bills on time for at least 6 to 12 months. You might also try some store and gas cards. The rates suck and you can only use them with one retailer, but they help you build a history.

Once you build a history you can get cards with good rates and cancel the old ones.

Never borrow more than one third of your limit.

Always be on time with your bills.

Never just cut up a card. Call and be sure it is cancelled.

** Years ago I was in your situation. But I put up $300 for a secured card. I paid my bills for a year on time. After 6 months I could get a department store card. Now I can get real cards.

Answer 3

First go to the three credit berueas and get your reports. Make sure that if there are items on it they are yours and if closed were yours. Once you've seen your score you'll know where you stand. Then you want to get either small loans at the bank and pay them off in a 3-4 month time period. or get a credit card at a department store and put small amounts on each month and pay it off. Doing this over a 6 month perion will greatly increase your credit score. Then check back with the credit agencies and you'll be surprised at increase you obtained.
I was 18 when I got my first credit- card and by the time I was 23 I had a credit score of 802 which is almost the highest you can get. Now don't forget to always pay your bills on time and to never over spend and buy unnecessary things until what you bought before is paid for because all yor hard work to get such a good credit rating will go down the tubes. I wish you good luck and hope it all works out for you and you can get your car soon.
You can get your credit information at www.myfico.com it will give you acess to all three credit berueas.

Answer 4

The answer to your final question is: yes, it will build your credit. That's how everyone builds credit. Making your monthly payments on time is more important than your income, though if you want to buy a car that will matter too. It does take a long time, but if you pay your bills on time always you will build credit. I started with a JC Penney card when I was about 22. Then I got a Sears card. This enabled me to get a Visa, and now, years later, I've got tons of credit. Have faith and pay those bills!

Answer 5

To build your credit, don't just make the minimum monthly payments. Pay the balance in full or pay extra every month.

Do not get more than two credit cards. Bankers see that as a potential to run up too much debt too quickly.

Is your name on your college loans? If so, that counts toward your credit rating.

How can you be sure? Call the bank where you are planning on getting this car loan, and ask them what they want to see on your credit report. Having the right details can make a huge difference in the interest rate that they charge you.

If you are planning on buying this car after graduation, you have no worries. Many car companies offer special deals to recent graduates. Just ask about it when you're negotiating.

Answer 6

First, always make sure to know exactly what's on your credit report. You can get a free copy online. Then, to start building credit, go to a department store & get a card. They are usually pretty easy cards to get. Make sure that you use it, but don't pay it off every month. Just make minimum payments. Just make sure you are never late. That is VERY bad. After a while with your department store cards, apply for a "real" credit card, like amex or visa... Do this by checking thru your bank. If you have a checking account in good standing, usually they will give you a credit card. Then do the same, always make your payments on time & don't be scared to charge. Just make sure you don't charge more than you'll ever be able to pay off. Just start small, give it a little time & before you know it, you'll get that car loan. You know you can probably get it now, you'll just get a really bad percentage rate.

Answer 7

Anything and everything you do to show that you can pay your bills on time, and not at the last minute, and more than the minimum payment, will build your credit. Your parents can be of a great help to your credit if you buy a car with their co-signing on the note, and the car is in YOUR NAME ONLY. Then you can secure the loan you want for the car when you don't have much of a credit rating, and then you can build your credit on a very good purchase that Credit Unions look to as a measure. I know I did that with my two kids, now 22 and 20, and it has helped them, even though they haven't made many credit purchases since then. My son has his own ATM card, which I think sometimes is to his negative since he's not real responsible that way yet, but they do have that car purchase, new cars at that, on their record, so that's good for them. Let your parents help you as they can. We do love our kids, and we do love to help them. God Bless you.

Answer 8

I can honestly say I know what you are going through because I went through the same thing, but I had no credit at all so I couldn't qualify for a credit card. One thing you can do is take out a signature loan for something and make the payments on time every month. Or let's put it this way, if you want to make payments on a car for $300 a month, put that much onto a credit card, then pay it off. When the car dealers see that they will know you can make payments on a car. Or to build credit fast, just put your gas on a credit card because that's real easy to pay off.

Answer 9

As long as you make your monthly payments on time your score will build up. Also see if your parents would add you on as as authorize user for like an american express, household credit card, or any one of those top notch credit cards. Dont use the card just get the same credit and point your parents get and over time your credit will build up.Also take 300.00 to the bank an open up a savings account and ask the bank to let you do a signature loan. Remember you must leave the money in the bank as collateral. Have them set it up for as least 6 months. Over a period of time your score will build. One more thing When you do get yopur credit cards manke sure you keep your balance low. Example if your limit is 300.00 always have 225.00 available credit. Always keep revolving accounts low as possible.

Good Luck

Answer 10

Getting a credit card is one way to do it if you think you have the discipline not to go into a lot of debt. If you need something like a dryer or washer you can open an account with Sears or J.C.Penny or even Home Depot or Lowes. Usually their credit accounts are ...pay within one year and there is no interest charged. That would be the best way to go. Anytime you pay monthly on something it shows up on your credit. Start slow. Don't buy but one large item at a time. Pay it off before you get something else. Even tho you have 12 months to pay for it try to double up so you get it done quickly. Then get something else.
This is how we did all our married life. We never had much debt and slowly bought everything we would ever need.
Even got our house paid off severl years ahead of time. Good luck to you. m