@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:So, I'm currently a freshman at college, and I've been advised by couple of friends/family members to establish my credit history in order to save money in the long run in terms of interest when getting like an auto loan and mortgage.
Is this generally true?
Also, how do I establish credit? My friends from high school that went to college told me that's it very hard to get a credit card and even approved it's something like 200 dollars limit. Is it really worth my time and effort to apply for credit card to establish credit?
I'm just afraid that I'll overspend if I get a credit card because that's what I'm going to do.
Help please?
I'm was in a similar situation earlier this year. If you aren't planning on getting a car or house very soon, you don't need to rush into anything, but before you do get any loans, having excellent credit can absolutely save you money. One thing you might consider to establish credit would be to become an authorized user on a family member's credit card. It would be best to be added to an account with no late payments, a high credit limit, a low percentage of balance to limit (below 10% is best), and that has been open for a long time. Also, keep in mind that being added to an Amex will not help you as much because it will report as a new account. You could also try to get your own credit card. After you have been an authorized user for a while, you might want to check some banks prequalification sites for any card offers. If you get these offers, especially from banks like Chase which almost always mean you will be approved, you are more likely to be approved. Another way of getting your own card would be to get a secured card. A secured card is called "secured" because to open it, you give the bank a deposit, usually $200 or more. Most secured cards will give you a limit equal to the amount you deposited. You still have to pay off the card like a normal credit card. Make sure to be responsible with credit and pay your card on time. Pay in full if you can to save money on interest and stay out of debt. Many banks offer these, but make sure that the card you get can eventually "graduate" from secured to unsecured. Also, get cards with high interest and fees. With no credit history, and therefore no negative marks on your credit, you aren't forced to get a card like that. Once unsecured, your bank will return your deposit and you can try for better cards with higher limits and great benefits.
Who wants secured? it su*ks
OP: Just ask your parents to add you as an AU on their one or two "oldest" card issued by prime lenders and let your FICO generates. Then after like half a year just apply for like CSP, Everyday, BoA and you'll be approved.
LOL +1 Although secured cards have their purpose, if OP has the resources I'd recommend skipping them. I started with an AU card and it took less than a year to build my current portfolio.
