What do you think the best way to build your credit is?

Question

I'm 19 and my husband is 20, we've been married for over a year but we really haven't been able to build our credit...it's not bad, just non-existing, which is like bad. We couldn't even get a cell phone plan. My question is how are we supposed to build our credit when it's so hard to even get a opportunity to get started? However we did get a credit card a few months ago for the sole purpose of credit building. So do we just have to pay on time (we've always paid all of our bills on time) with the credit card for like a year+? It's so frustrated because we reallly want to get our own home. we have one son and planning another.

Answer 1

Paying on time is good and paying more than the minimum payment is better. Also, paying off a balance looks very good.
I always suggest to young people that they get a gasoline credit card with no revolving credit (except for major car repairs). You won't have the temptation to misuse a card like this the way you would a bank card or a department store card. You just still use the same amount of gas you normally would but instead of cash you put it on the card and you pay it off every month. It really helps. Even things like your rent (assuming that you do) help build your credit. Be sure you never pay it late and that you have a good relationship with your landlord so you can ask for a letter of credit reference if necessary. Be sure you are saving as well as paying bills on time. It looks good to lenders if you have consistently put aside money, even if it is a very small amount each time. It does show credit worthiness. Any time you take credit or a loan and pay it off, it looks good. So, you might take out some of those 90 days same as cash deals when you buy a major purchase that you have already saved the money for, or even a gift item like jewelry, or a pair of eyeglasses at a Lenscrafter or so on. It's brief; it doesn't tie up your finances; and it looks excellent when you pay it off -- the same as a longer term deal would have. Good luck.

Answer 2

Yours is a common issue for young marrieds, or anyone just launching out on their own.

It used to be, that you would go to places like Sears, Penny's, Wards, and apply for their credit cards; they were easy to get, and you didn't have to have any credit history. Most of those places now use the big credit card companies, but check with them.

You are well-started by getting ONE credit card. Make sure that you keep it paid off. After a while, apply for a second, and do the same thing. Set a goal of cutting them both up in five years when you have a good credit history.

Avoid buying anything that is financed through a finance company. They will eat your lunch, and if you miss payments, they will hound you to death! Some times this can't be avoided, but make sure you are diligent with your payments to them.

As you now know, babies costs a whole LOT of money. Hold off having another until you have saved enough for a down payment on a "starter" house; that is, a small house, not the house of your dreams, but one you can live in until you build some equity, and can afford the dream house.

Hope this helps.

Answer 3

Pay your credit card in full, on-time every month.

You may also want to get a secured loan through a bank (where they freeze, for instance, $1000 in an account and give you the money in the form of a loan. You pay back the $1000 over a set period of time and after the loan is finished, they unfreeze your initial money)

Part of your credit score relies on the mix of credit you have, so having both revolving (credit cards) and installment (loans) credit is important.

Answer 4

Don't just pay on time, but pay over the minimum. It shouldn't take a year to establish a descent credit rapport, also, don't continually apply for credit if your being turned down, that has a negative effect on your credit report also. If your goal is to buy a home just be carefull, stay focused and consider a credit card with your financial institution if you haven't already done so. Good luck!

Answer 5

I knew a man who did exactly as robin suggested.
He made a 90 day loan for about $1,000.00
He put it in the bank and at 90 days paid it off, with the interest.

A short time later, he borrowed $2,000.00, and paid it the same way.

He built the loan amount over several months, and then borrowed more over a longer time.
He made payments as agreed, not paid off, but monthly, and then started a cement block business in his garage, with a loan for molds.

As it grew, he needed a heavy truck and was able to borrow $90,000.00. He never looked back and eventually built a cement block plant.

If you have any assets, and need them for a loan, use them but place the money in a different bank and pay it on time. Don't worry about the minimal interest. A couple times and you may not need the assets.

I had a business and used assets for a couple loans. Over a short time, I could call my bank and request $10,000.00 or more, for 90 days. They prepared the note and in 2-3 hours I signed it and had the money in my account.

It takes discipline.

Answer 6

hi there,

My friend works at a bank and she told me that if you get a pre-paid mastercard from money marts and you keep reloading it, then eventually mastercard sees how responsible you are and then you can apply. Maybe talk to a mortgage consultant as well or financial advisor.

Answer 7

go to bank start with small loan 100.00 to 300.00 to start even if you don't use the money you will build trust and that is what they want but you must pay on time only way to do it

Answer 8

I hope this helps you:

Step-by-Step Credit Repair Guide
http://www.debt-loan-refinance-mortgage-credit.com/category/Step-by-Step-Credit-Repair-Guide.html

Answer 9

read tips on credit scores on this site