Student needs help building credit, HOW?!

[ander]

I need to build credit. I currently have a Student AMEX Blue, a Shell Mastercard, and the Visa Check Card from Bank of America.

What do I need to do to build more credit?!

 

[punkrawket]

building credit doesn't mean get as many credit cards that you can
you can also build good and bad credit, assuming you want to build good credit, it's simple really....... buy stuff, but pay it off quickly, don't let it gain interest, cc companies will see that you pay off your debts quickly or in a timely mannor and you will receive good credit

btw: i'm in the same boat for building credit, but it's cool cuz with a good payin job building my credit means better/bigger/more computers

 

[dullard]

Here are some things that should help:

1) Pay off all the balances on all those cards every single month.
2) Do not apply for more cards, two CCs is probably the ideal number for most people.
3) Do not apply for too many loans (student loans, car loans, etc.)
4) Do not even do a loan search (looking for a good loan rate).
5) If either of those cards has your parents name on it, you are not building your credit.
6) Try not to ask for credit limit increases.
7) It takes time to build credit.
8) Pay your other monthly bills on time (tuition, electricity, water, rent, etc.)

There are others, but my mind is lazy today.

 

[dullard]

I forgot one: get a higher paying job.

 

[bozo1]

What the others said.

Good credit is showing you are responsible. While paying off your card monthly or whatever is a plus, they really are looking at how you handle your payments over time. Paying on time each month, paying more than the minimum balance, never being late for 12-24 months and you're set. You're Visa check card doesn't count for anything as it is not reported to the credit bureaus unless you abuse it.

 

[Shudder]

Why are students so obsessed with building credit? Goddamn, it's like the CC companies make it seem like it's the end of the world for you if you haven't put yourself massively in debt by the time you've graduated college.

The best credit is no credit, because otherwise it's likely you'll put a blemish on it, or at least be in debt.

The fact you already have 1-2 cards means you have credit. The term "building credit" is a scam and I'd avise against getting any more cards. Ever again.

 

[bozo1]

Oh come on, good credit makes life much easier. Abuse it and you're screwed for many years.

Try to get a decent rate on a mortgage or a car without a solid credit background.

 

[ander]

My car is leased until August 2003. I'd want to have my name on the title for the next one. That and I plan to need credit in the coming years, it's something nice to have...a good beacon score.

 

[bozo1]

You are on the right track - USE your gas and amex card, but pay it off every month or so. Getting more cards will not help anything and would probably hurt you. (ratio of owed to available credit, ratio of available credit to income) You just need to give it time. You need to use the cards and pay them. Having them sit with a 0 balance doesn't help when you are in building mode. Creditors want to see how you handle your debt.

 

[nord1899]

<< Here are some things that should help:

1) Pay off all the balances on all those cards every single month.
2) Do not apply for more cards, two CCs is probably the ideal number for most people.
3) Do not apply for too many loans (student loans, car loans, etc.)
4) Do not even do a loan search (looking for a good loan rate).
5) If either of those cards has your parents name on it, you are not building your credit.
6) Try not to ask for credit limit increases.
7) It takes time to build credit.
8) Pay your other monthly bills on time (tuition, electricity, water, rent, etc.)

There are others, but my mind is lazy today. >>



I second this and the get a good job part (and keep that job, job security is a big part of credit).

As an add on to #8, be sure you are the one in charge of utilities if you live in an apartment. They count as loans and are good for your credit rating if you pay them off completely every month.

You already have two credit cards. Unless you find another card to replace one of those, do not apply for anymore. The act of applying for a credit card is actually bad for your credit rating. Even if you get accepted and immediately cancel, its not good for your credit rating. Well at least according to a professor of mine (Head of Economics in the Business college).

I have heard differing reports on whether its good or not to completely payoff the credit cards every month or carry a small balance. So I don't know about which is better. I'd prefer to pay them off and not deal with interest.

And remember, it takes time. Credit does not happen over night.

 

[dullard]

<< I have heard differing reports on whether its good or not to completely payoff the credit cards every month or carry a small balance. So I don't know about which is better. I'd prefer to pay them off and not deal with interest. >>



CC companies make money in two different ways:
1) They earn roughly 4% on everything you charge. Thus if you charge $100 at a computer store, that store owes your credit card company about $104. Remember the 4 cent cash discounts per gallon of gas that was so popular awhile ago? That was the 4% extra the gas companies didn't want to pay the CC companies. (That deal is mostly gone, since they like having little cash on hand for thieves to steal).
2) They earn lots of interest money on unpaid balances.

They lose money in one major way:
1) People not paying their CC and instead going into hiding or declaring bankrupcy.

Thus: Credit card companies favorite customers will charge lots on their credit cards and pay them partially off every month on time. The partial payments guarantee a large interest income, guarantee that there is credit left for new purchases (with 4% income), and they guarantee that the person hasn't gone into hiding yet.

However, I highly suggest that you pay them off in full. As a student just starting out, the hundreds or thousands of dollars in interest each year can become overwhelming. Why would anyone want to pay all this money for no reason? Even if it made the CC company a little happier, it is pretty much a dumb idea not to pay them off fully.