How do I/can I establish credit?!?

Question

I've never had a credit card, no overdue bills, had a checking once (3 years ago), and have no outstanding bills. Yet I ALWAYS get turned down for a credit card. I get nothing from car dealers. I always hear "buy jewelery" how the hell is that going to help me?!?! Does anyone have any suggestions?

Answer 1

Credit is a tricky thing...this coming from someone who used to work for a credit card company. A lot of creditors won't give you a card if you don't already have established credit. The best thing to do is find one who will...Capital One I believe will allow you to have one with a limit of about $500...also check out colleges..a lot of credit card companies go there and you don't need to have established other cards. Once you have one...pay it off every month, establish a good credit history. It takes time...so be patient ;) Good Luck

Answer 2

The reason why people tell you to buy jewelry is that most jewelry is marked up so high that the store is really a credit store. It is not uncommon for a piece of jewelry to cost $200 and sell for $1,000.They can afford to give credit to someone without credit or with shakey credit. The best way to establish credit is get a secured cc. Most banks offer the card. You deposit money into an account and a card is issued for the amount of you deposit. You have to remember that you can't withdrawl the money as it's insurance to the bank that you pay your charges. If you keep your account in good standard for 6 month to a year the bank will start to increase your credit line without asking for more money. You
need to watch out that some cards won't ask for a deposit but they will charge a large process fee plus monthly service charge and a large fee if you pay your card late. so read the fine print. A secured card is the cheapest way and you even get a little interest on your deposit

Answer 3

1)Take $300-$500 to a bank and establish a security deposit account to obtain a secured credit card.

2) Repeat this at another bank.

3) Use both credit cards but never charge more than a maximum balance of 20% of the total credit card limit.

4) Pay the credit card statement in full when it comes.

5) Go to the bank and take out a CD for $2,000 that pays interest.

6)Get a secured loan for $1,000 against the CD and pay it off in a year on time.

Answer 4

A "secured" credit card will get you up and running....

It basically means you give the bank $1000 they then give you a credit card with a $1000 limit... you go shopping, and pay the credit card bill when it comes monthly like normal credit cards... The $1000 sits in the bank and does not get touched, that's where the title "secured" comes in. We used "USBANK" and had no troubles !

(Do not do business with "Captial One" or any bank associated with them) but thats a whole different story!!! TRUST ME !!

In a few months you have credit built up and you can ask for a higher line of credit. Aaaaaaaaaaah the credit cycle has now begun.... Good Luck and pay off your credit card debt EVERY month and life will be good !

Answer 5

Plan to buy something you need. Target usually extends $300 limit credit cards to most everyone, and I am sure many other places do too. Otherwise, find a place that will give you a contract where you make payments for at least a year. (Example, my first contracts/purchases to establish credit were Curtis Mathes Television and Kirby vacuum, after that, credit was established, and credit cards were easily attainable for credit reference.) Rent to Own stores, and theres a lot of family businesses that would let you contract a year... (eg. I contracted with a family owned lumber store for supplies to add a room on a house, and a family furniture store for bunk beds)

Answer 6

1. Definitely have an open checking account!
2. Research websites that tell you step by step how to build credit. Equifax, TransUnion, Experian etc...
3. For the jewelry, depending upon the value, you can use that as collateral for your loan (but not a credit card loan)
4. Increase your income!!! No income, no card or loan...

There's so much information out there especially on the internet. Get that information and then make the best decision for you!

Answer 7

Start by getting a job or an income stream. This makes you credit worthy. Work out why you want credit. Credit cards gives credit but charges high interest. Try to forego immediate gratification and pay off consumables with "cash". This way you do not get into a debt trap. Once you have enough, you start acquiring neutral debt i.e debt to get you going faster e.g. cars. This depreciates and does not make you richer. The are required for you to get to work etc. They can make you richer if you use the car to teach driving. Finally you get credit to imporve your wealth faster e.g. shares, properties. When you reach this phase, you are on a roll. Remember that risks goes with rewards. Just make sure that you do not kkep going backwaards by getting into the bad credits and never get out of the "hole" you dug for yourself.

Answer 8

Buy and use pre-paid credit cards. Check with your local bank. Or do a Yahoo! search under "pre-paid credit cards."
Apply for charge cards, with low limits, at places like Sears or J C Penney.