if you just turned 18.. how would you build credit?

Answer 1

I got lucky enough that capital one gave me a credit card.

Answer 2

Building credit is a good thing. You'll need it later when you want to purchase a house, get a business loan etc. You should get at least one or two credit cards. Maybe even get one that will earn you cash back or air miles. I would get the card through your regular bank or credit union. Here's the key. Pay the thing off every month. Don't be fooled into thinking you can buy now and pay for it later when you're earning more. What most young people don't understand is that when you start earning more, your expenses tend to increase as well. So this is no time to start incurring a bunch of debt that you'll have to repay into your 20s and 30s.

Another good way is by purchasing a modestly priced used car with an auto loan. Choose the automatic debit option and your payments will be taken directly from your checking account. You'll build excellent credit history that way. By modestly priced car, I mean less than $5,000.

Don't spend more than you earn. Make a budget and stick with it. This is a really good time to establish good spending and saving practices. Good luck.

Answer 3

I have worked as a finance manager for many car dealerships. The best way to build credit is to get some. Start out small, I'm sure you get credit card solicitations, apply to one or two. Make it a point to NEVER be late on a payment, I don't care if you have to eat macaroni and cheese the whole month....make the payments. After you have done that for say 10-12 months consider borrowing a little more. Banks and financial institutions like to lend money to people who have borrowed before and have a good record, and have a good debt to income ratio. In other words if your debts outweigh your income you are a high risk. Also, if you live on your own pay all of your utilities on time, that also counts. Just be prudent in your credit spending. Don't use credit cards to support yourself. Use them for emergencies, car breaks down etc. It may sound like it's a good idea to pay them off every month, but that doesn't help build credit. Lenders want to see a record of on-time payments. So you will have to suck up the interest rates until you build up a high credit score and substantial amounts borrowed. A side note, if you are looking to buy car, all dealerships have first-time buyer programs. They look for job stability and longevity of residence. This is perhaps the best way to start. Be aware that if you have a co-signer it will not affect your credit rating, it will affect theirs. So go it alone and make as big of a down payment as you can. Generally they require $2000.00 or more. Good luck.

Answer 4

if your out on your own - make SURE all your bills are paid before they are due. not one single day late.

start realizing now that sometimes businesses tack on a dollar charge for credit card or debit card use, which can put you in the red with your checking account. so leave a money in your account (say 50.00 to 100.00) that you pretend you don't have to guarantee that you will never bounce anything.

get one credit card with a low maximum on it and charge something you already have the money for each month. pay it off RIGHT away. doesn't have to be expensive. just a 20.00 dollar something or even 10.00. the point they care about is that you are always right on time with your payment which will build your credit rating up nicely.

Answer 5

I would start with a department store credit card. Sears (if you are in the us). Make regular smallish purchases and pay them off soon as!

In saying that ... dun buy stuff you don't need or want just too build up your credit rating. And buy regular I don't mean daily either.

From their move too a utility or service like internet connection, phone plan, or electric bill. (ONE of the above and make sure if it's the phone plan you DON'T burry your slef.) Pay them off early and often.

After twenty four months of that you can then pick between RAW SPENDING POWER or the HOME OWNER FAST TRACK. If you are shooting for raw spending power go for a visa card with a low limit. Keep it payed off but maintain a constant outstanding balance of at least 50 bux. Then shoot for an AmEx card. Purchase things with it and maintain a running ballance of zero. After a year of that folks will line up around the correner too give you high limit credit cards.

If you are shooting for home ownership early in life you will want too be much much much more conservitive with your spending and credit habbits. Pay off everything right on time and pay them off in a very fixed and controlled pattern. Also... a saving/investment plan. Make regular and very patterned contributions too it that represents at least 18% of your gross total income. Five years of this and you should have no problems when you go shopping for your home loan.

Hope this helps.

Answer 6

Easiest thing to do is sign up for a gas station credit card! They start off at a low maximum and really what can you get put gasoline and junk food!

use the card 1 or 2 times a month AND pay your BILL OFF ON TIME!!
credit will rise quickly and other types of credit will open up to you!

Answer 7

For the last answerer, she didn't "get lucky" at all to have a credit card company give her a credit card. They will give them to anyone hoping that they get in debt. Build your credit by going to a department store, getting a credit card through the store, like a Sears card, buy something. Then pay it off as soon as possible. You will have perfect credit.

Answer 8

I would get 1 credit card, limit $500.00 pay it off monthly and keep the balance below $100.00. Open a checking account and use it for most of your transactions. Do not bounce any checks, do not make any late payments and keep your debt light. Then after 2-3 years I would look at buying a house. something small and manageable. from there you keep building.

Answer 9

Get a credit card and pay it off every month. If you develop a spending problem shred it because it's costing you interest money.

I believe another way to develop credit is to get a cell phone and pay it off each month. If I remember correctly, cell phones report whether you pay on time or not to the credit bureau. Ask to make sure. T-mobile is a good, cheep company.

Answer 10

i was 17 when i moved out... imagine the hassle i had getting utilities hooked up in my apartment!
in fact, the only company that gave me anything (with my zero credit rating, hell i was a kid in high school!) was the phone company... i got my basic landline and as a result, the rest of the utilities gave me accounts when i told them i had a phone.
of course, be responsible, and pay your bills... ON TIME! otherwise that credit heads south really quickly..
if you have a cell phone, this would be a great place to start! showing you can be responsible with your money, and an account in your name.

be careful of credit cards. if you do get one, get one with a teensy limit... honestly, i wouldnt get one at all.. but it can help IF YOU CAN USE IT RESPONSIBLY and most kids... well face it, they cant...

Answer 11

You need to open accounts that report to the credit bureaus.

Be careful, dont over apply, just apply carefully.


Here is a wonderful article that teaches you how: http://www.expert-credit-advice.com/building_credit.htm