I don't have much credit, how can I build it?

Question

I am 26 and finnally starting to grow up, I had a couple unpaid collections probably totalling $500, other than that I have never paid for anything on credit. Now I have a pretty good job and I want to start thinking about buying a home/condo, and also I am going to need a new car soon and I'm really tierd of driving junk so I would like to get a loan for that as well, I would be interested in 1st time home buyer info, and credi building/car loan info. Thanks

Answer 1

you can start by getting a credit card that has a small amount limit if your afraid of getting into debt, and then you'll have to make your payments on time to get credit and keep it balanced or else you'll get bad credit. Then once you feel comfortable using a credit card you can increase the balance and even get a couple more if you like, just make sure to make your payments on time.

Answer 2

first check your credit report and know your fica score before venturing into any home/car loans. Second make sure your 500 dollar debt is paid. If it's longer the 7 years dispute it. Then, open secure line of credit at your bank, use it and wait 6 months. Sometimes mortgage companies want you to have 2-3 trade lines. This means credit. After doing the above, watch your fica score. Then, attempt a small loan at your bank 5-700 or apply for a visa. No more than that. It will increase your debt to credit ratio. I hope this helps a little.

Answer 3

i think you are doing the right thing . i would try to settle the small debts that are outstanding. as a condition of the settlement you could ask that they remove / agree not to report it. they may or may not accept it . nothing wrong in asking. if you do not want to pay the outstanding balances cause they are not legite or any other reason, then you can expect to write a letter of explanation when you buy a home. the lender may or may not ask you to settle the debt then. outstanding debts can be a risk in terms of future liens against the house which the lender will not want to take any chances on. the house loan is easier to get than the car loan. to keep building your score you have to use credit. consider paying for your groceries / household bills with credit cards and then pay off the balances in full each month. this will look like you are using the credit more ... you just do not want to get into more debt / make partial payments. not sure the order of your goals , but sometimes , lenders tell you that you should buy the house first and then after the closing buy the new car. your debt to income ration will look much better if you do not have a car loan to factor against your monthly income . consequently , by not having a car payment for four years, you will appear to be a better credit risk. please don't be tempted to overspend . be conservative and smart with your money. it can take years to fix / pay for mistakes. good lluck.

Answer 4

Hi. I worked with several people on establishing and rebuilding their credit and your case seems to be an easy one. First things first, you need to get a copy of your credit report and make sure that there is nothing there that you cannot verify. Next, if you do have unpaid balances or charge off's, call the companies up right away (make sure you have all related information such as your account numbers, old addresses, etc.,) and bargain with them on your payoff or scheduling payments monthly. As far as a credit card is concerned your best bet for now is a secured bank card. Most banks have programs that allow you to open up a credit card with them if you open a secured savings account to cover the cost if you end up not paying. It's not a bad deal and with time (typically 6 months to a year,) you will be able to apply for unsecured credit cards with better interest rates and perks. Keep in mind that building a positive credit report in order to buy a car or house will take at least 1 to 2 years with good payment habits. Get your credit score and try your best to use this advice to up your score into the upper 600's to 700. Try not to keep applying to various sources as each time there is an inquiry to your credit it lowers your score. Good luck!

Answer 5

This isn't a direct answer, although it does help in home buying to have on your credit report. Get a department store credit card, and use it a few times. Don't let the balance get over $300. Pay it off, as soon as you can. Pay it off in full every month. You only need it three months before it shows great on your credit report. this is one way.

For the car, get 0%APR which is a lot less payment in interest. You may have to wait for a certain month, actually a certain week, when this is offered, although if you have good credit, you can take advantage of this. It saves thousands of dollars, instead of $400 to $1000 off sticker price because they assign a high interest rate, and you've saved nothing.

Answer 6

Here are some basic steps on repairing and rebuilding credit.

First, make sure all the information on your credit report is accurate.

Second, try to pay off all or any accounts that are currently in collections or make payment arrangements with the creditor to pay off the balance monthly.

Third, any credit card that is over 50% of the available credit line should be paid down to under half of your total credit line. Your credit score is lowered when your available balance is over 50% of your total credit line.

Finally, if you have bad or no credit and have no credit cards try to obtain two credit cards and make sure all of your monthly payments are made on time. This will help increase your credit score. If you cannot be approved for a unsecured credit card, obtain a secured credit card.

Answer 7

Apply for a credit card, request a small loan for a purchase of computer equipment or something of that nature, or maybe even financing a car. Basically, you want to have this in your name. You can also try to piggy back on the good credit of some of your family members like your parents or siblings. You have to be a co-signer and with that, your credit will improve dramatically within a few months. I did this for my sister. She declared bankruptcy and have a ton of delinquencies. She was able to piggy back off of my credit, and now has a 716, up from a 504.

Answer 8

its an excellent line. i've got been examining up on it and what helps build your credit is to have a stability on the oldest card you have and make the month-to-month money plus alittle extra. So paying all of it off at as quickly as wont injury your credit, in spite of the shown fact that it won't develop it the two. i think of it relies upon on what share you have open with a stability and what the full stability is. I examine additionally which you may never have extra desirable than 50% of the entire decrease used. because of the fact which could positioned a destructive on your score.

Answer 9

There are so many options: acquire a credit card that you pay for in advance; buy a car from any of the dealers that "guarantee" you a loan and pay it off; borrow from a bank at a high rate of interest and pay the loan in full early, etc.
Once you start, you will have to fight them off.

Answer 10

You can bye comodities or any other things with your credit cards and pay the bills on time. Or you can consult with a credit reparing company. Visit the credit section .
To know more you can visit
http://www.hstrial-tgeorge1.homestead.com
and
http://www.debtconsolidationmanagement.blogspot.com