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Originally Posted by Barefootsies
Correctamundo.
As for building credit, or rebuilding, you need to get a credit card. Even if secured.
Always make more than the monthly, do not go over the limit, request a credit increase twice a year (good companies will do this for you. shitty rebuilders will not always).
Once you get to the one year mark, call your company and ask them to raise your limit, drop any annual fees, whatever. Also looking for a larger limit card. Consolidate, and close out old ones.
A couple of tips.
Do not apply for every credit card offer you get in the mail. Once a year, apply for as many as you like in a 30 days period. It doesn't hit your credit score as hard if done in a short period of time. Some credit bureaus treat it softer.
Keep in mind that regardless of the card. Most are run by a handful of banks. Chase, HSBC, Capital One, Citibank, Discover, whatever. So even if it says GM, or something else. It could be the same company you just applied with. You will see who it is when you get to your submit screen, or read the TOS.
Also, if you can get a bank loan for a jetski, car, or something. It will give you a mix of installment loans, to go with your revolving. You want both. Make sure you go 18 months before paying it off though. Even if it's only for a $1k-2K.
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Good advice. Sounds like you worked in the credit biz.
I worked for Capital One years ago and much of what you said was what they advocated for building good credit.
Credit card companies don't like customers who pay their entire balances each month. They don't make interest revenue from them. They tend to give higher credit limits to those who carry a sizeable balance yet make more than the minimum payments each month.
I remember a guy who called asking to have his credit limit increased, and when we turned him down he got all pissed off and shouted, "I'm a fucking doctor and make $150G a year! Why can't I get my limit increased?!"
Because...dumbass - according to your FICO score, you're already spending too high a percentage of your yearly income on alimony, your BMW payments, your time share in the Caribbean and that hooker down on Division St.
I always recommend that people get a print out of their credit score from TransUnion and Experian - to see where they stand. Most people aren't even aware of what's dragging down their scores.