Building credit

Discussion in 'After Hours Lounge (Off Topic)' started by Keith_R, Sep 8, 2003.

  1. Keith_R

    Keith_R Screenwriter

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    Hey all, now that I'm 18 I would like to begin building credit. I don't have any credit cards right now and would like to avoid getting one, are there any other ways besids a credit card that I can begin building credit or is a credit card the only way? thanks.
     
  2. DonRoeber

    DonRoeber Screenwriter

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    You can buy a house or car? Try just getting a small credit card, and pay it off at the end of every month. Sears or JCPennys is good, because you'll probably need stuff from there for your apartment or dorm. Oh, apartments rarely help your credit rating, as most places don't report your activity.
     
  3. David-S

    David-S Second Unit

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    Just get a $500 card from your bank, (most places have student cards), if nothing else, that will build up your "time with credit" or whatever it's called (yes, part of your credit is how long you've had an account)...

    Put, say, gas on it every month, and then pay it off...[​IMG]
     
  4. James T

    James T Screenwriter

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    Get a cell phone under your name. Credit cards are good for credit buildup, just make sure you pay off your bills in full if you have the money to avoid interest rates.
     
  5. Bob Graz

    Bob Graz Supporting Actor

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    I'd suggest a credit card. Capital One loves to give them out to students. You'll only get a $200-$500 credit limit. Plus if you ever need to rent a car, you won't do it without a credit card. Start good habits now and pay it off every month. Don't spend what you can't afford to pay for.

    Other things you can do. Pay any bills that come in your name on time. Paying off a car loan or other small loan. Good luck.
     
  6. David-S

    David-S Second Unit

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  7. James T

    James T Screenwriter

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    Actually no(at least through the credit bureau in Canada). I sell cell phones and if you just turn 18, you have perfect credit(at least good enough to get a cell phone w/o a deposit).
     
  8. John G

    John G Agent

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    another suggestion - go to your bank and apply for a small personal loan, even if you don't need it.
     
  9. Leila Dougan

    Leila Dougan Screenwriter

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    James, in the US it doesn't work like that. When you turn 18 you have NO credit which is almost as bad as bad credit. When I got my cell phone I had to pay a $100 deposit (not too bad considering I didn't have any credit). I've paid it off on time for the last 3 years, but unfortunately Voicestream/Tmobile doesn't report it. So essentially, it's done nill for me.

    My suggestion is also to get a $500 credit card. There's nothing inherently wrong or evil with credit cards. Just makes sure to only spend what you can afford and pay them off every month on time.

    My opinion of store cards isn't so great because the interest is usually insane and you can only use the cards at their store, obviously. A low limit regular card can be used anywhere and often come with decent interest rates. My first card, given to me by my credit union, had a $500 limit with a 9.99% APR. Not too bad considering most of the other "bait" cards are in the high teens. Avoid institutions that give you free stuff to join. Just go to your bank/credit union and ask if they have something for students. The best deals are rarely advertised.
     
  10. Keith Mickunas

    Keith Mickunas Cinematographer

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    I second (or third, or whatever) getting a credit card. I had several through college. There were occasions where I needed to let something ride a month or so, so I'd transfer from one card to another when offered a special deal, then close the old one. Like many have said, just pay close attention to what you put on it. Plus you'll need it if you ever need to fly somewhere, stay in a hotel, rent a car, or buy something online.

    Whenever possible, get utilities and the like in your name only. Those usually report to the credit bureaus also. Then be sure and pay them on time every month.

    College is probably the easiest time to build credit. I received offers in the mail at my dorm room, and there were flyers posted on campus for various credit cards. The interest rates were high, but I never had one with an annual fee. So since I rarely carried a balance, I never paid them a dime. I had a friend that put off getting credit cards and loans until late in his 20's, plus he let a few parking tickets slide and those got on his credit report. As a result he had a hard time getting loans at a decent rate. So don't make that mistake.

    Just rememeber, pay those bills. Interest accumulates quickly, but if you pay off the balance by the due date you don't pay any interest.
     
  11. Eric_L

    Eric_L Screenwriter

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    The smartest thing you can do is NOT do anything. At 18 most people have little need for credit. They end up being buried under needless debt.

    If you must, then get a parent to co-sign a small loan for a car. Or you can deposit the cash in the bank and then borow it back.

    If you must have a charge card, then once you have it PROMISE yourself NEVER to carry it in your wallet.

    Instead, place it under your bed mattress. When you decide you need it you must first come home and retrieve it (time enough to cool your jets and determine if it is REALLY necessary). Once you have it then keep it in your POCKET, not wallet. Return it to the matteress when you are done.

    Necessary:

    Tuition, books, major auto repairs, etc.

    NOT necessary:

    bar tabs, concert tickets, CD/DVDs, Video Games, lap dances, groceries, beer, designer clothing, haircuts, gas, sweedish penis enlargers, etc.
     
  12. Joseph S

    Joseph S Cinematographer

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    Go for the student card and pay off your bill at the end of the month.

    Companies like MBNA will have you up to 20 Grand soon enough. [​IMG] There's absolutely nothing wrong with establishing a good credit history it can only help you in the future. Spend as you can afford and you won't have a problem.
     
  13. David Preston

    David Preston Supporting Actor

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    I have a tip if you want your score to look good. If one of your cards is holding a balance that is half or more of your limit it lowers your score a little. So keep them under half of the limit.
     
  14. Chris Smith

    Chris Smith Stunt Coordinator

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    I always heard that paying it off completely in full every month builds it up some but not as much as holding a balance for a few months. I charged a $500 item to my only card at the time and let it ride only paying the minimum for 3 months. I then payed it off in full and have been doing so every year. That was 3 years ago and now I have great credit.
     
  15. Brian Mansure

    Brian Mansure Second Unit

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    A good website that will help answer many financial questions is... www.motleyfool.com

    There is even a section on their discussion boards dedicated to young adults and money management.

    Sounds like you've got a lot of good advice here to start you off.

    As others have mentioned, build good credit now and keep good money management habits so they will stay with you for the rest of your life. It's going to take a lot of discipline especially at times but you'll reap the benifits for years to come.

    Good Luck.

    Brian
     
  16. AllanN

    AllanN Supporting Actor

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    Get the $500 student CC, pay all your bills/necessities (See Eric_L's post for a necessity reference). Then pay the full balance off at the end of the month. A car loan, even a few thousand dollars one will help establish credit. When you get out of school and start paying on student loans that will help. Most utility company report to the credit agencies.
     
  17. mike_frontier

    mike_frontier Supporting Actor

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    Get an Best Buy CC... those are the fun ones [​IMG]
     
  18. Matt Gordon

    Matt Gordon Supporting Actor

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    Keith R. --

    Listen to Eric L's advice. He's right on the money (no pun intended!). Credit cards should NEVER be used for unnecessary purchases, and if you do use them for another purchase, you should not buy something you don't have the money for ALREADY. DO NOT carry a balance month-to-month.

    For the most part, store credit cards are a complete ripoff. You can get some great deals or discounts by "signing up today," but then pay the balance off immediately and destroy the card. I've done this with Brooks Brothers and Best Buy, and it's worked out to my advantage.
     
  19. Chris Lockwood

    Chris Lockwood Producer

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    > Plus if you ever need to rent a car, you won't do it without a credit card.

    At 18, he probably won't be able to rent one anyway.


    > store credit cards are a complete ripoff.

    If you can't get a major card like a Visa, a store card is a good way to start building credit.


    Ignore the people that say don't establish credit now. Don't wait til you get turned down for a house or car loan years from now to find out you should've done something about it.
     
  20. Kevin T

    Kevin T Screenwriter

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