Building Credit

[Lisa loves Pooh]

Correct me if I am wrong--but if a company looks at your report and then denies you credit--does that show up?

I applied for a loan for a car from a car dealer once. Buyer beware...their words, not mine--"shotgun key"--whatever that means..translation--I applied once for a car loan--but when that got rejected, they went on to the next lender, and then the next and then the next. All just from one transaction--Your bank is always the best place to start for any type of loan (if they won't give you a loan--the who will). There are those lenders out there who do bad credit, no credit, slow credit, and bankruptcy--but you won't necessarily get the best deal and the fine print can kill you. You are high risk and they will charge you interest and penalize you (miss one payment, get secured property repo'd) accordingly. They will shop your around until they find you a loan.

I applied once--but had my credit report inquired on 5 times--talk about lowering your credit score!



Credit is a beautiful thing--acquire it responsibily--but not out of desperation.

Re: Sears--I was a well paid management trainee when I worked for them--I got declined their credit--my husband got denied their credit. We bank with USAA and boy do they love us--our first car loan with them was only $16000 (that was all they would give us)...I think we are in the $30Ks now...we don't take out the loan--that's just what they "think" we can afford to buy. The best credit is that built slowly and solidly.

And if you are new to credit and pay your balances each month--carry a balance for 3-6 months so you can show that you have the ability to pay your creditors. Once your credit is founded--by all means pay off each month as much as you like.

 

[Bosjoe]

Sears is hard to get credit. I was denied from them last October and I have a 715 Credit score. I have 1 collection on my history because I refused to pay on the companies mistake.

Also Phone companies and gas bill etc do not help your credit. They are only reported if you refuse to pay them. But you can use them if you do not have credit to buy a home. Some financial institutions will count a year of bills paid ontime toward your credit history, we have done this for a few of our clients.
Now know you will not get that great rate of 4.75 fixed on a home. But it can still help you get approved for some kind of a loan. There are so many programs out there for mortgages.

As someone said earlier leave a little balance on your credit card, instead of paying it fully every month.

Try to stay under 30% of of your credit lines ie, Credit limit 1000, say under the $300 mark to build up your credit.

Joe

 

[dcfromva]

Molly Meow,
Are either you or your DH eligible to be a member of credit union? (Credit unions are member-owned financial cooperatives that serve a limited field of membership--and are very motivated in making loans. )Here is a link to Credit Union History
Link to How to Join a Credit Union

My first experience with a credit union was when I first went to work--I didn't have any credit history. However, all employees where I was employeed were eligible to join this credit union. (A lot of credit unions extend membership to the parents and children of employees)
My Mom had to co-sign the first loan, but they made a 100% loan on a new car at a very favorable interest rate. (My first car was a Honda Civic--this was 26 years ago! )
I didn't want to obligate my Mom any more than I had to, so I paid the loan off early. After that first loan, there were never any other conditions (ie a co-signer) on any loans.
It sounds like you are very careful with your money--maybe if you could get your Dad to co-sign the first loan--you could be well on your way to establishing a credit history.

-DC

 

[Miss Kelly]

Okay, my FICO score is 679. My credit report said that it was good but not great. What can I do to increase my FICO score? I would like for it to be up by (hopefully) 100 points by next June so I can get a car loan without my parents and with a low interest rate. I have no credit card debts as of this month (I just paid them off) and only one student loan owing app. 1800 (but that will increase obviously). Suggestions?

 

[MyGoofy26]

Originally posted by Miss Kelly
Okay, my FICO score is 679. My credit report said that it was good but not great. What can I do to increase my FICO score? I would like for it to be up by (hopefully) 100 points by next June so I can get a car loan without my parents and with a low interest rate. I have no credit card debts as of this month (I just paid them off) and only one student loan owing app. 1800 (but that will increase obviously). Suggestions?

That's a pretty decent score, you'd probably be able to find a loan with that.

I don't know how much more you can bring it up. Most people don't get very deep into the 700's (and certainly not into the 800's) until they have a long history of credit - people that have tradelines that are like 20 years old (same credit card, mortgages, etc) You might be able to bring it up somewhat, but I'm assuming your credit history is a little short so a year won't make much difference.

Also your student loans have absolutely no effect on your score until you're in repayment. You said it would obviously increase, so I'm assuming (again) that you're still in school therefore not yet in repayment. Until you're out of school and have started paying back loans, those tradelines are "unrated" and have absolutely no bearing, good or bad, on your FICO.

Carrie

 

[Miss Kelly]

Most people don't get very deep into the 700's (and certainly not into the 800's) until they have a long history of credit

OH, I didn't realize that. Thanks for explaining this to me.

 

[MrsPete]

When DH and I bought our first house, neither of us had ever had a credit card. Each of us had purchased one car: he'd paid cash for his, I had a loan. No student loans. The only credit we had was rent and utility payments -- and we had NO PROBLEM getting a mortgage with a good rate. We both had college degrees and entry-level jobs.

We now have a credit card (we like the convenience and the rewards programs), and we pay it off every month. When we financed a car last year, they told us that we have the HIGHEST POSSIBLE credit rating.

Based upon my own limited experience, I think it'd be foolish to carry revolving credit card debt to build a credit score.

 

[ladydancer]

One thing I do is request our credit report twice a year. Only once in all the years I have been receiving our report, it was correct. There is always something in error.

So make sure you check your report a few months prior to applying for credit, car loan, home loan ect.

Dh score is 780 and mine is 730. I had a little balance on a credit card and he didn't that is why mine is lower.

Speaking of scores....I know my auto ins. and my home ins. is based on our credit scores. The higher our scores the less we pay. They figure people who are responsable with credit are a good risk.

 

[EsmeraldaX]

Originally posted by mudnuri
Try a sears card.....they are generally pretty easy to get. You can start out with a regular sears card- then move to a permier, then a sears visa..

Actually, Sears is one of the hardest store cards to get now. I have no desire to have a Sears card, but I know many people who get turned down for this one, even though they have never been turned down for anything else.

 

[tink2dw]

Most people have scores in the 600 anything above 640 is good 660 is better.

To have 800 and above scores you need to be "in good and walk on water", 700 scores are rare.

Anything below 500 will get you declined.