How to build a good credit rating

[hellfreeze2]

Originally posted by: dullard

Originally posted by: hellfreeze
while if you pay it off they don't make any money off of you"

That is the false part. They all earn ~4% with every purchase. It is a fee the stores must pay in order to use the CC service. That is where the CC companies make their money. Remember the CC company has to borrow money and pay interest in order for you to borrow money from them. (Which is why they always say they charge x% over the going rate since they have to pay the going rate to borrow the money to give to you). Thus they really don't make much from interest. Most of their profits is the ~4% per purchase and fees (such as over the limit or late fees).

The basics are covered already for good credit:
1) Don't apply for any cards, even store cards. Each application hurts you. Don't hurt yourself to save $5 bucks at Sears or some other store. Bad credit can cost you thousands - far more than that $5 you saved.
thanks for the 4% explanation. guess imma go slap my friend for the bad advice

as for your applying for card advice...will it hurt me that i applied for some cards since i don't have one and was just trying to find a way to build credit?

 

[RossMAN]

as for your applying for card advice...will it hurt me that i applied for some cards since i don't have one and was just trying to find a way to build credit?

YES it's already been covered about 10 times in this thread, since you have been approved for a BOFA secured cc ... STOP APPLYING for any credit what-so-ever, this includes do not request credit increases.

 

[Broohaha]

urgh the WORST is missing your minimum payment... i missed my 10 dollar minimum payment on my 0% apr BoA card (the one i have 4800 on right now) and they charged me 39 bucks!! luckily they waived it as a courtesy but MAKE SURE to pay off your minimum balances or else those late fees will eat you alive.

 

[phatj]

If you have a credit card, and say, spend $600 for the month of August. Then once you get your bill in the mail, pay the entire $600, are you going to be charged interest on that $600? Im kinda confused.

 

[hellfreeze2]

Originally posted by: RossMAN
as for your applying for card advice...will it hurt me that i applied for some cards since i don't have one and was just trying to find a way to build credit?

YES it's already been covered about 10 times in this thread, since you have been approved for a BOFA secured cc ... STOP APPLYING for any credit what-so-ever, this includes do not request credit increases.

heh. haven't applied for any since. just doesn't make sense that it would hurt me when i applied trying to get a first line of credit, but hey, guess that's how it goes

on a different note....what are the good/bad things about business lines of credit?

 

[RossMAN]

Originally posted by: phatj
If you have a credit card, and say, spend $600 for the month of August. Then once you get your bill in the mail, pay the entire $600, are you going to be charged interest on that $600? Im kinda confused.

It all depends on when your statement cut/print date is. Credit cards and other revolving lines of credit usually have a 30 day cycle.

So let's use this scenario as an example:

May 20 - Charge $500 at Amazon.com
May 31 - Charge $150 at Buy.com
June 5 - statement cut date or end of your billing cycle
June 30 - payment due date is always 25 days after your statement cut date, these 25 days are usually referred to as "grace period" where you can borrow money for free (no interest)

So now on June 30th you owe $650.00 to pay it off in full or you can make a minimum monthly payment of $20.

 

[dirtboy]

Contrary to popular belief, carrying a balance will NOT increase your credit rating. Paying on time, whether in full or the minimum, is all you need to really worry about.

 

[Nocturnal]

Originally posted by: Broohaha
urgh the WORST is missing your minimum payment... i missed my 10 dollar minimum payment on my 0% apr BoA card (the one i have 4800 on right now) and they charged me 39 bucks!! luckily they waived it as a courtesy but MAKE SURE to pay off your minimum balances or else those late fees will eat you alive.

This is actually how I ended up with really bad credit. I had three cards with fairly low limits and I missed payments and eventually the late payment charges added up and up and up. Now I force myself to make the minimum payment by the due date.

 

[SCSIfreek]

I have had my share of not managing my cash flow wisely. Had couple of late payments from my early teenage years (95-97) and it is still haunting me to this day. Although my credit score is in the 720 range, I could have gotten better if I didnt messed up. Good luck and be responsible.


--Scsi

 

[Kyteland]

Originally posted by: hellfreeze2
heh. i stated the $3,000 option just cuz it was mentioned in the thread. lol. $3,000 loans suck

It wouldn't be a $3000 loan in the normal sense. You wouldn't be spending that money. The only cost to you is the 3 month interest on the loan, which is cheap considering how it will help your score.

As RossMAN said, you'd probably be rejected for the loan, so you'd need someone to cosign with you. The key to this little trick is that the money is untouchable. That $3000 isn't for you to play with, but to sit on. It has to be there to make the payments with.

 

[Nocturnal]

Originally posted by: Kyteland

Originally posted by: hellfreeze2
heh. i stated the $3,000 option just cuz it was mentioned in the thread. lol. $3,000 loans suck

It wouldn't be a $3000 loan in the normal sense. You wouldn't be spending that money. The only cost to you is the 3 month interest on the loan, which is cheap considering how it will help your score.

As RossMAN said, you'd probably be rejected for the loan, so you'd need someone to cosign with you. The key to this little trick is that the money is untouchable. That $3000 isn't for you to play with, but to sit on. It has to be there to make the payments with.

Jesus H. Christ that is an excellent idea!!!!!!!!!!!!!!!!!! ROFL I wonder why I've never thought about this. Just taking out a loan, and in a timely manner paying it back off month to month, say $100.00 a month or whatever the minimum balance would be. But then again you would have to have a lot of self-control. Like me, I might be like hey I have all this $ I can pay it back don't worry about let's go buy a Canon 10D!!!

 

[RossMAN]

Originally posted by: Nocturnal

Originally posted by: Kyteland

Originally posted by: hellfreeze2
heh. i stated the $3,000 option just cuz it was mentioned in the thread. lol. $3,000 loans suck

It wouldn't be a $3000 loan in the normal sense. You wouldn't be spending that money. The only cost to you is the 3 month interest on the loan, which is cheap considering how it will help your score.

As RossMAN said, you'd probably be rejected for the loan, so you'd need someone to cosign with you. The key to this little trick is that the money is untouchable. That $3000 isn't for you to play with, but to sit on. It has to be there to make the payments with.

Jesus H. Christ that is an excellent idea!!!!!!!!!!!!!!!!!! ROFL I wonder why I've never thought about this. Just taking out a loan, and in a timely manner paying it back off month to month, say $100.00 a month or whatever the minimum balance would be. But then again you would have to have a lot of self-control. Like me, I might be like hey I have all this $ I can pay it back don't worry about let's go buy a Canon 10D!!!

then what happens to your beloved Sony V1?

 

[gopunk]

is there a better time to apply for CC's? like if i just bought a bunch of crap, should i wait until i transfer funds over to pay it off before applying for another CC? i'm not talking about for my life, i mean credit score wise. do they look at your current balances....

i'm stuck with zakath on the student boat... even though i've always made my payments for like a year now and have at least a few hundred on each bill. wonder how much they look at income compared to credit score...

 

[RossMAN]

gopunk - Since credit bureau's are usually 2 months behind, wait for at least 2 months before applying for new credit or requesting increases.

 

[hellfreeze]

Originally posted by: Kyteland

Originally posted by: hellfreeze2
heh. i stated the $3,000 option just cuz it was mentioned in the thread. lol. $3,000 loans suck

It wouldn't be a $3000 loan in the normal sense. You wouldn't be spending that money. The only cost to you is the 3 month interest on the loan, which is cheap considering how it will help your score.

As RossMAN said, you'd probably be rejected for the loan, so you'd need someone to cosign with you. The key to this little trick is that the money is untouchable. That $3000 isn't for you to play with, but to sit on. It has to be there to make the payments with.

WOW...guess who is taking a trip to the bank

i guess the $50 or so of interest is worth it then. how much would $3k help me on my credit, on a scale of 1-10 with 10 being a "a lot more than i can shyte out every morning"

 

[Kyteland]

Originally posted by: hellfreeze
WOW...guess who is taking a trip to the bank

i guess the $50 or so of interest is worth it then. how much would $3k help me on my credit, on a scale of 1-10 with 10 being a "a lot more than i can shyte out every morning"

FYI, if you have a bad credit score or have been using credit for a while, then this isn't the quick fix you are looking for to get you score up. If you are already established then this is basically worthless. The best thing you can do is be very responsible with your credit for a while to boost your score up.

However, if you have absolutely no credit because you have never used it before, then this will help you get out of the gate with a posotive rating. For me, I made it through college without a credit card. I had a debit card and that was it. When I graduated, I had a hard time getting approved for things like my cell phone, etc, because I had no credit rating. This trick, along with being responsible with money helped out a lot.

 

[Mookow]

How long do late rent payments sit on your credit report? I heard somewhere that after X number of years they dropped off...

 

[Vic]

Originally posted by: Mookow
How long do late rent payments sit on your credit report? I heard somewhere that after X number of years they dropped off...

Rent isn't reported on credit bureaus.

 

[Mookow]

Originally posted by: Vic

Originally posted by: Mookow
How long do late rent payments sit on your credit report? I heard somewhere that after X number of years they dropped off...

Rent isn't reported on credit bureaus.

Are you sure?

 

[RossMAN]

Originally posted by: Mookow

Originally posted by: Vic

Originally posted by: Mookow
How long do late rent payments sit on your credit report? I heard somewhere that after X number of years they dropped off...

Rent isn't reported on credit bureaus.

Are you sure?

Vic knows what he's talking about.

 

[Vic]

Originally posted by: Mookow

Originally posted by: Vic

Originally posted by: Mookow
How long do late rent payments sit on your credit report? I heard somewhere that after X number of years they dropped off...

Rent isn't reported on credit bureaus.

Are you sure?

Very.

 

[Mookow]

Originally posted by: Vic

Originally posted by: Mookow

Originally posted by: Vic

Originally posted by: Mookow
How long do late rent payments sit on your credit report? I heard somewhere that after X number of years they dropped off...

Rent isn't reported on credit bureaus.

Are you sure?

Very.

Sweet

 

[alrocky]

Originally posted by: Orsorum
Is there any sort of juggling that should be going on between multiple credit cards, balance wise? Keep it below half the limit, etc?

Pay off your credit cards every month. If you can't afford to pay off the balance every month then you're spending beyond your means and should stop buying. Assuming you are currently in debt and cannot pay off the entire balances, then concentrate on doing so as quickly as possible and this takes priority over how it affects your credit history. Generally speaking you want to pay down the CC with highest interest rate first. If you can (at no charge) transfer the debt from a higher interest rate CC to a lower one, great. Generally speaking don't select a CC which charges an annual fee.

 

[Vic]

Originally posted by: Mookow

Originally posted by: Vic

Originally posted by: Mookow

Originally posted by: Vic

Originally posted by: Mookow
How long do late rent payments sit on your credit report? I heard somewhere that after X number of years they dropped off...

Rent isn't reported on credit bureaus.

Are you sure?

Very.

Sweet

Hey... now, now... be careful out there. Not paying your rent can get you in trouble in other ways...

 

[Orsorum]

Originally posted by: alrocky

Originally posted by: Orsorum
Is there any sort of juggling that should be going on between multiple credit cards, balance wise? Keep it below half the limit, etc?

Pay off your credit cards every month. If you can't afford to pay off the balance every month then you're spending beyond your means and should stop buying. Assuming you are currently in debt and cannot pay off the entire balances, then concentrate on doing so as quickly as possible and this takes priority over how it affects your credit history. Generally speaking you want to pay down the CC with highest interest rate first. If you can (at no charge) transfer the debt from a higher interest rate CC to a lower one, great. Generally speaking don't select a CC which charges an annual fee.

I'm sorry, I think I may have misarticulated my question.

I have two credits cards, a Visa and a Discover. I only use one at a time - i.e. for June, I'll use my Discover, and pay it all off at the end of the month. Then I'll switch to my Visa, use it for July, etc. Just makes it easier to keep track of a single balance.

Is this good, bad, or irrelevent?