Best Way To Gain Credit

[Starboard M]

Another way to help boost your rating is not to pay the minimums. Always add an extra 5%. It helps your score significantly.

Is it better to pay off the full amount thats incurred, or to only pay around the minimum?


Is there a way to find your credit score without doing those free credit report things that you see on TV? Id be curious to see mine.

 

[Steve_Moore]

Is it better to pay off the full amount thats incurred, or to only pay around the minimum?


Is there a way to find your credit score without doing those free credit report things that you see on TV? Id be curious to see mine.

Credit report dot com does it for free once, but they do charge 1.00 to your credit card, they just never claim it. It's just to verify it's you.

I have mine and the wife's through there. No problems.

 

[XBoBJ]

yeah screw it ill just pay cash i like to have a nice chunk in the bank just incase the jeep breaks something, i start saving more, eating out less, driving for no reason....

 

[Tom R.]

Read Total Money Makeover by Dave Ramsey. You'll learn how useless credit really is. Credit is your path to debt.

This is exactly what I was thinking.

 

[fscrig75]

Most shops will give you financing options. I always go for the 1 year same as cash. But you better pay off the balance before that year is up or you'll get slammed with a years worth of interest.

 

[Darky]

Is it better to pay off the full amount thats incurred, or to only pay around the minimum?


Is there a way to find your credit score without doing those free credit report things that you see on TV? Id be curious to see mine.

You can buy a credit report....
Or get denied for credit from somewhere then you have the right to a free report.

 

[buschwhaked]

Is it better to pay off the full amount thats incurred, or to only pay around the minimum?


Is there a way to find your credit score without doing those free credit report things that you see on TV? Id be curious to see mine.

Yes, anytime a creditor pulls your report they are by law obligated to tell you your credit score and what agency they use whether it is denied or not. I also forgot to add that every time a credit agency pings your credit report at your request it can lower your credit score. It makes you look desperate for money.

 

[BruceB83]

Read Total Money Makeover by Dave Ramsey. You'll learn how useless credit really is. Credit is your path to debt.

:yelclap: :yelclap: :yelclap:!!!!!!!!!!!!!!!!!!

If only he'd take this advice (as well as everybody else) since this is the best advice one can give...but he probably won't...and will end up like the other 85% of America. I was in Old Navy 2 nights ago and the poor kid at the check out register tried to get me to sign up for a store credit card. I told him we don't use credit and he asked "even without knowing all the benefits" and I said THERE ARE NO BENEFITS. Then he proceeded to tell me how with the recession coming, his father told him that credit is going to be the way to get by.................wait for it........................LOLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL. There were people in line so I couldn't school this kid like I wanted to and I had to bite my tongue big time. Point is, like bhansen said, credit is a path to debt. Yes you need decent credit in the get go to get a good rate on a house but you don't have to go get all kinds of cards and lines of credit to do so. Ever heard of manual underwriting? It's where people actually use their brains to decided if someone should get a mortgage or not. If they look at a 22 year old with no existing credit with a good job and a 22 year old with 4 credit cards, a car loan, and 2 store credit cards they are going to favor the kid with no credit because he's less risk. It shows his BEHAVIOR is more responsible and that's the bottom line.

Oh yeah, and half this stuff people are telling you about how to gain credit is BS. Here is the breakdown of what factors into your FICO score...

History of paying bills on time - 35%
Debt-to-available-credit ratio (Total balance on your credit cards and other loans compared to your total credit limit) - 30%
Length of credit history - 15%
New accounts and recent applications for credit - 10%
Mix of credit (credit cards and loans) - 10%

 

[JeepFreak21]

Ever heard of manual underwriting? It's where people actually use their brains to decided if someone should get a mortgage or not. If they look at a 22 year old with no existing credit with a good job and a 22 year old with 4 credit cards, a car loan, and 2 store credit cards they are going to favor the kid with no credit because he's less risk. It shows his BEHAVIOR is more responsible and that's the bottom line.

Sorry, but that first kid is not getting a loan without a cosigner... not in CA at least.Maaaaybe he'd have a chance if he could show 2-4 years of alternate credit (utility bills, cell phone bills, rental history, etc) and he has a down payment, but especially with manual underwriting, they want to know that you can act responsible with credit. Would you give your kid a dragster as their first car just because they've never wrecked before?

People actually using their brains to approve loans would be great, if they all weren't scared to death about covering their own asses because of the huge mess were in right now. If they get an automated approval and the borrower defaults, they're less likely to get blamed.

Billy

 

[JeepFreak21]

Yes, anytime a creditor pulls your report they are by law obligated to tell you your credit score and what agency they use whether it is denied or not. I also forgot to add that every time a credit agency pings your credit report at your request it can lower your credit score. It makes you look desperate for money.

You are allowed to shop around without being penalized now. I believe it's something like 4 applications in a 30 day window for the same reason (credit card OR auto loan OR home loan). Double check those numbers though... I'm not positive what they are.
Billy

 

[BruceB83]

Sorry, but that first kid is not getting a loan without a cosigner... not in CA at least.Maaaaybe he'd have a chance if he could show 2-4 years of alternate credit (utility bills, cell phone bills, rental history, etc) and he has a down payment, but especially with manual underwriting, they want to know that you can act responsible with credit. Would you give your kid a dragster as their first car just because they've never wrecked before?

People actually using their brains to approve loans would be great, if they all weren't scared to death about covering their own asses because of the huge mess were in right now. If they get an automated approval and the borrower defaults, they're less likely to get blamed.

Billy

True, they may would like to see some alternate history in some situations but YES he will. I don't know specifically about CA, probably so with the current situation there, but in normal circumstances he would get a the loan. Where does it say getting into previous debt is required to buy a house? It doesn't. That is also why I said showing a good steady job history because that shows responsibility. 1st time home buyer programs can work this way. I know people who have done this. And comparing a dragster as a first car isn't even a good comparison. Manual underwriting STILL has requirements, maybe you're not grasping what it really is. It's not like the lendor says to it's employee, "oh, its up to your discretion if you approve this guy". They give them requirements for situations like that. A credit score does NOT define a person. A credit score doesn't know how much you make, doesn't know if you got a raise, or even lost a job.

 

[BruceB83]

(sorry...computer went down and cant edit)

, etc. Yes it shows how you acted in the past but the past may have been because you lost a job or screwed things up over a 6 month period and now you're back on track.

 

[Darky]

A credit score isn't the only thing that's factored in. They check credit history, income, etc. I'm buying a house right now and my credit isn't very good. I don't have any open credit either. No cards, no loans, etc. They had to look into alternative credit. They pulled my rental, utilities, and cell phone history and I finally got approved. I suck at paying back credit cards, but when it comes to keeping a roof over my head, that always gets taken care of. They also required that I explain the bad marks on my history.

 

[BruceB83]

A credit score isn't the only thing that's factored in. They check credit history, income, etc. I'm buying a house right now and my credit isn't very good. I don't have any open credit either. No cards, no loans, etc. They had to look into alternative credit. They pulled my rental, utilities, and cell phone history and I finally got approved. I suck at paying back credit cards, but when it comes to keeping a roof over my head, that always gets taken care of. They also required that I explain the bad marks on my history.

That's my point. You were probably in manual underwriting??? And that's also the point we were making earlier saying screw credit, go cash. Except for the house of course. They are looking beyond your "credit score".

 

[Darky]

Yeah, not arguing...
Although I'd have to say having available credit is a good thing for those rare instances where you have an emergency and need more money than you have available. Or you need to rent a car while yours is in the shop...trust me, when I worked at Hertz, there was no bigger irritation than the person who has no credit card (and especially those with no debit card even...) who lacks the funds in the bank to use their debit card arguing about how the insurance is paying why should they need to be held responsible, they don't believe in credit. etc.

EDIT: PS: Some brains in the escrow side of buying a house would be really great...In order to speed the process I was told to just get a gift letter saying the money for closing would be given to me. I said fine, but I plan on paying myself. Oh, no problem Justin.
Escrow is close to closing now and oh by the way, there's a problem with the gift letter. Did you already get the money?
I only needed a small portion and its in my account now.
Oh no, you're going to have to have your Mom send the $2000 straight to the escrow company.
Well, I don't need that amount and my mom can't afford to send another $2000. I have more than enough in my account right now, what's it matter where the money is from?
It matters to escrow, they need a paper trail showing where it all came from. Can you write a letter explaining where you got the money?
Can I say I sold $2000 worth of crack cocaine?

 

[BruceB83]

Yeah, not arguing...
Although I'd have to say having available credit is a good thing for those rare instances where you have an emergency and need more money than you have available. Or you need to rent a car while yours is in the shop...trust me, when I worked at Hertz, there was no bigger irritation than the person who has no credit card (and especially those with no debit card even...) who lacks the funds in the bank to use their debit card arguing about how the insurance is paying why should they need to be held responsible, they don't believe in credit. etc.

I know you're not. :cheers: Well most people who don't "believe in credit" are in the position that they have cash to cover things....because they quit using credit, lol. It's a point to work towards and if done properly, not having enough cash to cover an emergency generally is not a problem. And then if for some reason you did need credit, well, that's where the manual uw comes in. If they see you make say $50k a year and have no debt other than your house, then they know you've got the cash coming in every month to cover a loan payment. And another thing, for most people once they've gone through the sacrifice of becoming debt free then they usually have available credit and have corrected their behavior so they won't use it anymore and then if that situation did come up, it's already there.

 

[Starboard M]

If they look at a 22 year old with no existing credit with a good job and a 22 year old with 4 credit cards, a car loan, and 2 store credit cards they are going to favor the kid with no credit because he's less risk. It shows his BEHAVIOR is more responsible and that's the bottom line.

Oh yeah, and half this stuff people are telling you about how to gain credit is BS. Here is the breakdown of what factors into your FICO score...

[/SIZE][/SIZE]History of paying bills on time - 35%
Debt-to-available-credit ratio (Total balance on your credit cards and other loans compared to your total credit limit) - 30%
Length of credit history - 15%
New accounts and recent applications for credit - 10%
Mix of credit (credit cards and loans) - 10%

Ill set myself up as an example. Im a 20 yo kid, with a year of good credit (hopefully), I have a rent, utilitie, and cable bill, no debt, no job,and no loans.


I highly doubt that any company is going to give me a good loan without having a really high interest. Sure, I might be able to get a 15k loan with 30% interest, but thats not something I would actually want to do.

I would imagine that if I had a couple more years under my belt with good credit, and a steady job once I graduate I would be able to get a better loan with a lower interest rate.

Both instances I would be able to get a loan. But both will also vary in the amount I could get, as well as the rates I would be able to get.

 

[JeepFreak21]

True, they may would like to see some alternate history in some situations but YES he will. I don't know specifically about CA, probably so with the current situation there, but in normal circumstances he would get a the loan. Where does it say getting into previous debt is required to buy a house? It doesn't. That is also why I said showing a good steady job history because that shows responsibility. 1st time home buyer programs can work this way. I know people who have done this. And comparing a dragster as a first car isn't even a good comparison. Manual underwriting STILL has requirements, maybe you're not grasping what it really is. It's not like the lendor says to it's employee, "oh, its up to your discretion if you approve this guy". They give them requirements for situations like that. A credit score does NOT define a person. A credit score doesn't know how much you make, doesn't know if you got a raise, or even lost a job.

I sell new homes... I've been submitting those applications to lenders for the last 3 years... hell, my wife and I were one of those applications 3 years ago! :dunno: I don't know what to tell ya man.
Billy

 

[Darky]

If they look at a 22 year old with no existing credit with a good job and a 22 year old with 4 credit cards, a car loan, and 2 store credit cards they are going to favor the kid with no credit because he's less risk. It shows his BEHAVIOR is more responsible and that's the bottom line

You're looking at 2 extremes with this example. If you look at two 22 yr olds with the same job history, one has no credit outside of utilities and rent while the other also has utilities and rent, but has a credit card, maybe 2, the 2nd one with the credit history will get the nod most likely. If he's been good at paying his credit card bill on time along with utilities and rent, it shows he's responsible and has a history of paying his debts. The kid with no credit could be a good risk, could be a bad risk. You don't know what his tendencies are. As an example, I've never been late on utilities, car payment (all paid off now), or rent. However I have been late on my last two credit cards and hospital bills. I pay the bills that keep a roof over my head and electricity on and if I have money left, it goes to other bills. So, good risk on a home loan, not so much on a credit card. But using the alternative credit from paying my utilities and rent, I was able to get approved for the house.