Originally posted by: amdforever2
Originally posted by: gotensan01
EDIT: Credit tips:
- Generally don't apply for more than 1 card every six months.
- If you apply and get rejected, this is basically a negative thing on you record.
- Do not have more than around 2-3 cards, more is seen as negative.
- Do not only use a card for a short amount of time.
- Household income is just what it says, this includes your parents.
When you apply for credit an inquiry is placed on one of your three reports (Equifax, Experian, or Transunion, depending on who the lender pulled). So applying for 6 cards in 6 months may only show two inquiries per report. Don't necessarily apply for tons of cards, but if a good offer or whatever comes along, take it. Any preapprovals you get from prime banks, as in good banks with low aprs, etc, take. These are relationships you want asap, as the longer you have them, the better, for both your credit long term and your financial relationship with the lender.
If you get rejected, no one knows. All that applying creates is an inquiry which basically means you're seeking credit. Inquiries are recorded because they can indicate risk, for example, someone desperately trying to get 30 different loan products, usually is having financial trouble. Banks don't usually want to lend to the financially troubled.
More credit cards is not seen as negative, will help your credit balances to credit limit ratio (which makes up a large part of your credit score). People can have 10+ credit cards and have FICO scores well above 750.
Usage on the card doesn't really matter, but for credit scoring purposes, the optimal is 5% balance. Anything below and lenders "aren't getting information about how you use your credit" anything higher (usually over 50% of available credit in use) is considered bad because it signals you're maxxing out or having some financial catastrophe. Still, if you want, you can buy a stick of gum on your card once a year and that would be fine.
At your age, if Bank of America is offering you a preapproved card, take it. If tommorow Discover does, take that too.
An inquiry is not nearly as important as it's made out to be, unless you have 15, 20, or more. As some people may know, a single car dealership trip can generate 10 inquiries while the dealer tries to place your loan.
Any preapproval you receive from a "prime", good, bank, you should take.
A few prime banks include -
Bank of America
US Bank
Citibank
Discover
American Express
MBNA
National City
A few OMG TRASH ~!~ avoid like the plague banks include -
Capital One (usually have an annual fee, low limits, SOME people like them)
Plains Commerce National Bank
Total Visa
Providian
Any Household or Orchard card (does not include best buy card or GM, corvette, union plus card)
DO NOT listen to anyone or accept any offer telling you you need an annual fee to build credit, or an APR much over 15%.
Never pay an annual fee, never pay a monthly maintenance, never pay an account startup fee. Any bank that asks for such is "subprime" trash.
I think that's all....
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