building credit

[philly and the phanatics]

I need to build my credit in order to be elligible for a housing loan. A loan person i talked to mentioned needing to establish two trade lines that made me look good whether it was a credit card or something else. Does anyone have any suggestions as far as good credit cards or good alternatives that will help me build my credit.

[kiwiMark]

as if you're even still alive

[BankItDrew]

as if you're even still alive

lmao

[givememyleg]

chase freedom, 1-5% cashback. put all your bills, expenses etc. on it and just pay off the balance each money. build credit, earn money, fuck bitches.

what about taking out a smaller loan, like 2k-5k, 6 month term and paying it back on time. not sure if that helps, i'm just a guy on the internet.

[Hawk]

When I started working on building my credit I wasn't able to get approved for a decent credit card (due to too little credit history, not bad marks) I ended up getting a secured credit card. I gave them (Navy Federal Credit Union, thanks Gramps!) a $500 security deposit and got a $500 limit. It shows up on your credit reports like any other credit card. Soon I'll be applying for a normal card better benefits and a higher limit.

[NightGizmo]

chase freedom, 1-5% cashback. put all your bills, expenses etc. on it and just pay off the balance each money. build credit, earn money, fuck bitches.

I do this with Discover, same concept, probably nearly identical rewards (1-5% cash back). Any bill that lets me setup auto-bill pay, I use this card -- it's awesome not having to think about paying most of your bills. I also have a Visa for those few places that don't take Discover.

Discover has a cool feature that I just started using -- Secure Online Account Numbers -- you can generate unique card numbers for each vendor you're paying. Once that number is used, only that vendor can use that card number in the future. So, if someone steals credit card numbers from apple.com, they can't run off to bestbuy.com and start charging thousands of dollars to your account.

[supa]

I've always been under the impression that you couldn't build credit if you pay off the card every month. Just something to keep in mind while doing your research.

[NightGizmo]

I've always been under the impression that you couldn't build credit if you pay off the card every month. Just something to keep in mind while doing your research.

This isn't true. Here's a quick description of how your credit score is calculated (found on Google): http://www.myfico.com/crediteducatio...yourscore.aspx.

One of the bigger factors in determining your credit score (factored into the "Amounts owed") is the ratio of your used credit to your total available credit. Someone that has $20K of debt and $20K of credit is in much worse shape than someone that has $1K of debt and $20K of credit, and also worse than someone that has $20K of debt and $60K of credit.

But I think that it's easier to get a higher limit if you carry a balance with a credit card company (and make payments on time), because they make more money off you -- that's a decision the individual credit card company makes based on your history with them. But to get the best credit score in the long run, you need to pay down all of your balances.

[MadMojoMonkey]

Sounds like occasionally requesting a higher credit limit that you never intend to use is +EV.

[swiggidy]

Doesn't help OP, but length of time your longest credit card has been opened has some effect too. So you might want to keep your old account open, but slice up the card.

[HarleyGuy13]

In the perfect world you don't need credit. I would advice saving like a wild man until you have a huge down payment. Assuming you are renting now make sure your rent and utility payments are never late.Then go to a small credit union or local private bank for your mortgage. Take statements from your landlord and utility providers stating you've never been late.Get a 15 year mortgage that is no more than 25-30% of your net income. If young people would do this their lives would be so much simpler and they could save hundreds of thousands of dollars.

[BennyLaRue]

Get a 15 year mortgage that is no more than 25-30% of your net income.

Impractical advice is impractical.

Let me put what you've said another way: regardless of where you live, find a house for less than $150K**.

** - no offense Philly, but I've made the the big assumption that you make no more than $50K/yr. Considering your questions, I felt safe with that. Adjust according to your situation, of course.

[NightGizmo]

In the perfect world you don't need credit.

Sure, but having available credit makes life a lot easier. Obviously, if you get a $20K credit card and immediately max it out, then you're doing it wrong -- now you're just giving away a lot of money to the bank. But if done right, you can actually use credit to increase your real purchasing power in the long-term.

An obvious example: if you pay your bills with a credit card, you get back 1-5% (assuming you have a card with good rewards). That's like an instant discount on your bills.

And right now, 30-year mortgage rates are so low that they are basically matching inflation -- so in terms of purchasing power, you end up having your house far sooner but at the same real, time-adjusted cost. And car loans? At .9%, you end up paying less (in real purchasing power) by financing then if you paid in cash.

[MadMojoMonkey]

An obvious example: if you pay your bills with a credit card, you get back 1-5% (assuming you have a card with good rewards). That's like an instant discount on your bills.

LOL at cash back from a company that charges you interest.

Take out the ridiculous frills and pseudo-prizes, and just lower the rate, I say.

Do you actually feel like there's realized value in that 1-5%, Giz? It's less than sales tax, and you're still paying interest on the credit line.

[Micro2Macro]

only have a credit check done if absolutely necessary. having too many will lower your score

[givememyleg]

LOL at cash back from a company that charges you interest.

Take out the ridiculous frills and pseudo-prizes, and just lower the rate, I say.

Do you actually feel like there's realized value in that 1-5%, Giz? It's less than sales tax, and you're still paying interest on the credit line.

how is there no "value" in free money? let's say in one year you end up spending $3k per month on your CC through bills, purchasing stuff, etc. That's $36k per year, or an extra $360 at 1% cashback. Sure $360 isn't a huge payday, but it's enough to pay for a weekend getaway with the wife/so, help with christmas presents, or a fancy night out, etc etc. plus they usually run special promos where you can get 5% cashback at some places.

also not sure if you know based on your reply but you're only charged interest in purchases if you let your balance roll over to the next month. so let's say i spend $3k jan 1 - jan 31, as long as i pay it off in full when my bill is due in february, i'm charged nothing.

[bode]

read this thread, it has a ton of good info from building credit, rebuilding credit, and maximizing cashback options on CC's.

[bode]

LOL at cash back from a company that charges you interest.

Take out the ridiculous frills and pseudo-prizes, and just lower the rate, I say.

Do you actually feel like there's realized value in that 1-5%, Giz? It's less than sales tax, and you're still paying interest on the credit line.

wat? you're obv not reaping any benefits if you use a credit card like a retard and carry a balance over each month. like gmml, i get +/- $500 back every year on my CC spending. Thats not some huge amount, but i'll take that all day for doing nothing other than paying what amounts to 1 extra bill per month.

[NightGizmo]

Do you actually feel like there's realized value in that 1-5%, Giz? It's less than sales tax, and you're still paying interest on the credit line.

Like everyone else said, I'm assuming you don't carry a balance, which means you don't pay any interest. Seriously, paying interest on credit card debt is one of the worst things you can do, financially.

[NightGizmo]

only have a credit check done if absolutely necessary. having too many will lower your score

Good point, this is true. Unless you're the one requesting it -- you're allowed to request your own credit history without impacting your score (I forget if that's unlimited, or only once a year won't hurt you). If you don't care about your score, you can get a free report once a year from each credit bureau. If you want to see your score, you have to pay a small fee.

I try to request mine once a year, to make sure nothing screwy shows up on the report (and I pay to see my score, it's nice seeing the number go up). Actually, I'm overdue to run it again, it's on my list of to-dos.

[Pascal]

Sure $360 isn't a huge payday, but it's enough to pay for a weekend getaway with hookers and blow

u withered fyp

[givememyleg]

ha, well played.

[BennyLaRue]

Guys, guys...it's less than sales tax.

[OngBonga]

I improved my credit rating by playing WW regularly.

[bode]

my post #17 above makes no sense as is. i meant to paste the following line which is a very good read on credit building, salvaging and maximizing EV on rewards.

http://forumserver.twoplustwo.com/34...-w-jl-1264513/

[Galapogos]

I actually thought your post #17 was pretty funny until you went and "remedied" it with your stupid post #25.

[bode]

I actually thought your post #17 was pretty funny until you went and "remedied" it with your stupid post #25.

ha ha, it does read kind of funny/snarky.