I read over these forums every night, learning a little bit more with each post I read, but I've noticed there isn't a whole lot of information on these boards about, Your first credit, building credit, and establishing new credit in general. What hints/tips/advice would you credit established folks give to a new-to-credit fella such as myself?
Any and all information is appreciated, thank you.
Well the two things that got me in trouble were
1) Taking on more debt than I was able to handle, like cosigning for a Harley Davidson we didn't need and then my husband lost his job a few months later.
2) Don't ignore the medical bills... They do matter when it comes to you're credit.
Other then that I think everyone would agree, just make sure you pay you're bills on time and don't max out the credit cards!
Building credit? Works the same way as rebuilding, minus the cleaning your CR part. Start slow. Build good TLs. Don't take on more than you have to or more than you can handle. Get a few revolving accounts and PIF them every month. Don't let the debt stack up on you. Just remember, it's not what you can buy, it's what you can afford.
Building...I would suggest putting more money on your secured card. If you can't afford to drop a couple hundred dollars into the account to increase your limit, try to at least put an extra $25-$50 a month on it to build it up. After about 6 months, you should shoot for an unsecured card. Nothing fancy, but something that you can grow with. GE cards are all good ones to start and grow with.
PIF every month! Raise your credit line if you can or open another secured credit card. Garden for at least a year before apping for an unsecured. Keep utilization low and avoid to many hard inquiries.
One area where people make a mistake is that they believe the more they charge/pay off, the higher the score. Incorrect. When starting out, charge small amounts, like $ 25. or so and pay off each month. Department stores, like to see the "turn.", meaning how you charge and then pay off. Doing that consistently, will get you more credit line increases sooner rather than just charging every several months or so. Do not charge what you do not have the money in a savings/checking account to pay in full when your bill comes. At todays interest rates, the interest adds up fast. Ditto to waiting one year or more to open another cc account. You will then have a full year of history plus your AAOA (average age of accounts ) and account inquiries won't tank your Fico score as bad. The final note to consider, do not open too many new accounts each year. Remember, at your age, your plans may change. You may need a different car, apartment, or house. All of these items are usually hard pull inquiries which stick on your credit report for 2 year. You do not want a bunch of these when you get ready to apply for a new home mortage. The best credit scores come with time, proven payment history, and patience. Good luck!
"it's not what you can buy, it's what you can afford." That's a great line Shogun, and thanks everyone. I am completely obsessed with paying in full every month, I had a 9 dollar (2% balance) report for these last two months, good start! How important is it having cards with larger limits reporting and for what purposes? I'd like to up my Capital One secured to at least $2000, maybe even the full $3000. Also I was just approved for a BOFA secured, the security deposit was taken today, so I hope to have that in my wallet soon and have that reporting, maybe it'll show in November when my first FICO is generated?
And I just mailed in my Signature forms for PSECU, I'm hoping they will be able to be my first destination for my first unsecured cards, and an auto loan! Thanks a lot for all of your comments, and suggestions guys.
A CU is a great place to get in good with. They will help you grow, plus now you'll get that ever elusive EX score. Now I'm jealous! Congrats!
Haha thank you I've heard PSECU is a good one, and they're pretty understanding so I'm definitely excited about getting set up with them
Higher credit limits are good because it allows you to make purchases on your card without maxiing it out or using a large percentage of your utilization.