Hello all,
I'm new here, just looked at my credit scores for the first time in my 30-some years (680-not bad for such a thin file). I'm currently working on revamping the budget, and I want to build my credit up as a corollary to that.
My husband and I have no credit cards presently. (I grew up with the idea that it's better to pay cash up front so as to not get into debt...that does nothing for credit, however.) We have a $100k+ mortgage and a $12k installment loan, both are joint loans, and both are in good standing. Although there is a sixty-day late hit on my credit report for the big loan from 4 years ago. I assume that that is accurate...2010 was a rough year. I also have a collections notice from 2010 for $100 that is not paid that I was not even aware that I owed. That is the extent of our debt.
My husband and I are both spenders (within our means), but I'm the frugal spender. Right now we seem to be able to save up just enough every month for the next emergency that hits. It beats living pay-check to pay-check and dreading every set back as we have in the past, but I know that we can do even better than that!
I'll keep reading the forums here; I'm learning a lot. But I do have some questions.
1. Should I call about the collection on my report? I don't even know what company owns the debt, so I'd have to contact one of the three agencies to find out (the collection shows up on all three). What are the risks/rewards of doing this?
2. I'd like to get a credit card to pay my bills with and pay in full every month. I'd like to have cashback and no foreign transaction fees if possible. Does anyone have a recommendation for a card within my credit range? I'd rather not apply somewhere and be turned down.
3. I'll be needing a new car soon. I have no qualms about driving junkers (they have character), but I'm trying to decide whether it would be better to save up and buy a very short term car with cash and put off getting a loan for a car until my score is better OR get a loan for a car now and use it to improve my credit. (Advice on the best place to get a car loan is also welcome).
4. For the long run...let's say I want an 850 when I grow up, how many cards and lines of credit should I be aiming for? Is it better to have, say 2 cards with a 25k limit each, or 10 cards with a 5k limit (for example)?
Thanks for your replies!
