BradM

What are some good ways for kids to build credit?

spunkmaster

Get a sears card and the rest will come !

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minddust

A job?

After Shock Media

Have their parents who have perfect credit or maybe their grandparents add them as co users to their cards the day they are born or a little latter. Never tell the kids about it, just destroy the extra cards. When they hit 18 or whatever wham starting out in life with perfect credit scores.

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crockett

when I was 18 I bought a car for $2,500 via a co signed bank loan. I paid that off then later bought a truck for about $5k via another bank loan when I was about 20. I had 1 credit card with a limit of $2500 that I paid off every month. (limit started @ $500 but was increased because I made payments on time)

On my 21th birthday I bought a house with only $2k down and no co signer needed. (was in 98-99 or so).

Simply put get a loan or two and pay it off on time or faster. They likely wont get the first loan without a co-signer.

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collegeboobies

FICO is changing things, after spring 2008, authorized users are no longer reported for on time payments.

woj

Get a credit card, use it, and pay it off each month on time, after few years you will end up with a pretty good credit...

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Profits of Doom

Actually after spring 2008 authorized users won't be reported, period. You could still use it as a quick fix though before the change goes into effect, and use the newfound credit boost to get a few decent cards to build on.

If the kid is starting college, though, they won't need any help getting credit cards. All they'll need to do is go up to any one of the many tables offering free t-shirts, lunch, etc if they fill out a credit application and they will definitely get the cards. The credit card industry preys on college kids because they figure their parents will bail them out when they eventually default...

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After Shock Media

You can still get away with it. Fico is changing that loophole due to people renting their credit scores to others to boost their own scores. You now just have to think a little bit. Get your kid a card when they are born or at some very young age, co-sign if need be. That way they still will get a card. There really is no minimum age to have a credit card. Then follow same guidelines, if gotten at birth they still will have 18 years of positive credit history and FICO along with others do really like and base a bit of your score on how long you have had credit. Do a few cards and again the kid is set at 18. They can only fuck themselves up.

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woj

don't they only count last 7 years anyway? so one can pretty safely wait till the kid is like 10 years old?

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crockett

That's kinda pointless, and a bit way too extreme. On top of that you aren't teaching the kid anything. Earning your credit is half the battle behind maintaining it.

You just give them something they will never understand what it is to earn it and will likely screw it up first time mommy and daddy are no longer in control.

As I posted in my post above, I went from zero credit to buying a house with no cosigner, within 3 years. It's not that hard to build good credit when you start fresh, but it's hell to repair bad credit.

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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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Enough Said.

"Would you rather live like a king for a year or like a prince forever?"

TheSenator

The best way is to be credit free.


I am on a five year plan to be credit free except for my mortgage. After paying off my creditors I will pay off my mortgage with the money I have been paying my creditors.

I don't want to have any debt.

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Barefootsies

Nice in theory. Not good for purchasing.

I WAS debt free until I went to get a mortgage, and they told me I needed to go get some credit. Cards, and car loans. I had my car paid off for two years. I had been using only my debit card, no credit cards.

So you actually have to go into debt, or more accurately, show you can HANDLE credit effectively if you are planning to win the credit game.

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fusionx

Pay all your monthly bills with a credit card, then make one payment a month to pay off that card. If you can, set up auto pay on that card for everything possible. Water bill, power bill, phone bills, cable bill, etc. You can use more than one card if you want, of course. The idea is to use the cards and never miss a montly payment.

You will show regular, consistent use of the card(s), and it makes it easier for you - you only have to pay one or two bills every month. If you can auto-pay the credit card bill through online banking or direct debit, etc, you'll never miss a payment again, and your credit will go up and up.

StuartD

My credit was ruined by FutureShop. Yes I disputed it but they were horrible about it and my credit stayed ruined.

The only way I could build it was..... to use it.
Got a "credit building" credit card, low'ish limits, high interest. And used it each month and paid it each month.

It was hard to go much beyond that at first since no place would give me credit but eventually there'd be more "credit building" options here and there, use them and build them and now my credit is great despite that FutureShop black mark still being there (my 7 years is almost up on that).

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Emil

This is step number one, just opening the editor to view the registry.
This is easy, just click on the start button and then on run. Once run is open, type in regedit and click OK.

Once you have regedit open, it is fairly easy to get where you want to.
Now you see the "folders" HKEY_CLASSES_ROOT, HKEY_CURRENT_USER, HKEY_LOCAL_MACHINE, HKEY_USERS, and HKEY_CURRENT_CONFIG
First lets get some basic terminology down.
These five main "folders" are calles hives, and their subfolders are called keys.
Click on the + next to HKEY_CURRENT_USER to expand the hive.

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JayDeeZee

Look at the different types of credit

Revolving - Credit cards, Line of credit
Installment - Car loans
Motgage - self explanitory
Open loan - Taking a loan for certain investments

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BradM

Stuart: My Canadian Credit is absolutely destroyed. At 17. Yes before I could legally get a loan. My parents leased a car for me and I lost a job so the bank put on MY SIN that I was a shitty person to lend money to. Since then I haven't been able to get even a cell phone.

BradM

Good advice in here guys, thanks.

As for the guy who said debt free: Good plan if you can do it - you're part of about a 2 percentile.

SilentKnight

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.

StuartD

I was there myself. Couldn't get a cell phone either.
I was however approved for a Capitol One credit rebuilder card. $500 limit to start. Very high interest rate.
But it was so very easy to rack it up, carry it over the 1st, pay it off. Rack it up, carry it over, pay it off.

That alone really helped rebuild my credit. Before that one card, I couldn't get approved for anything. Not a single thing.

Took a while, mostly because I didn't really pay that much attention to it. I thought I'd never dig myself outta that whole.
If I had paid closer attention and gotten credit as it came back to me, it would have rebuilt faster (so long as I kept up the payments).

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JayDeeZee

Brad, talk to the bank about getting a loan for your RRSP's. Only about $2500 - $4K. They then keep the RRSP's as collateral so they have Zero risk. Just make the montly payments. You're interest rate won't be bad at all.
-You'll build credit
-Get a nice little tax shelter
-Start saving for retirement

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TubeTitans_SusieQ

Question: How high does it raise your credit score when you pay off a loan(i.e. car loan)??

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Wagerboy

Few incorrect statements in here.

1) auth users get NO credit for being on it, good or bad. zero

2) secured credit cards build a small small amount of credit but its nowhere near a real credit card.

3) never pay off the balance of the credit card monthly, charge 2k, pay 1900 back and so on, banks wanna make money, not a free money service.

4) loans under 1k dont get real credit on the reports. 1K+ is called a qualifier.

5) being debt free does nothing for credit. you will recieve a 0 score on all the reports if you go a while without a tradeline.

6) running consumer reports like freecreditreport and those do not reflect real credit scores. they use an internal scoring system to make up your scores. they are mostly off about 50-100 points.

7) someone asked how your credit would go up if a car loan is paid. depends on the monthly amount and the term of the loan. no late payments, 30 to 70 points based on the loan amount.

Hope that helps.

WB

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Evil E

If your credit is shitty because of stuff in the past: get 1 or 2 500$ credit card and deposit money in it. Your balance will always be positive so you just use it as a debit card and your score will skyrocket within 6 months.

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lots of wrong advice from GFY members (nothing unusual)
..some good advice too..

but let me add mine Since I am new to this country (lived here 14 months) I have spent a lot of time researching how to establish good credit FAST.. ive found a lot of helpful tips and it has worked successfully for me:


get a secured credit card
Bank of america now offers a SEMI secured credit card - it is $99 deposit and gives you $500.. (this is a good starting point for a kid)

DO NOT pay your credit card off in full every month. I was doing this for the first 3 months until I got some better information.
Credit score companies DONT like to see you paying off your cards in TOTAL each month because generally when ppl pay off their card in full it means they are about to make a big life change - such as sold their house or changed job.
What they have seen in the past is that usually when ppl do this - their payments go DOWNHILL after the initial "large: payoff.. so it's just not a good sign to them.

Pay off the minimum each month x 2 or 3 (on a BOA $500 limit card - the min is $15 a month if you are maxed out to the limit)

One other important thing to understand about credit scoring companies is that they dont just look at how much you pay and if its on time the important thing is how much credit is USED compared to how much is AVAILABLE to you.

They DONT want to see you maxed out to your limit all the time... even if you DO pay it off in full each month.
Don't go over 60% of you credit availability - try to prove to the credit scoring cos that even tho you HAVE credit you dont NEED it desperately

there are many companies who will extend credit to someone who has no credit and they will report it back to the 3 scoring cos.
Often you can find a car dealersship that will do this for you.
you may need 50% cash upfront and the remaining 50% is on credit but it help to establish a rating faster.

After 12 months you should have an established credit rating and if you keep working it right after 18months to 2 years the score should be excellent.

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BradM

Thanks Kitty, good post. I think you're onto something there.

Fap

everytime you check your credit report is goes down

Barefootsies

Wrong.

There are passive (myfico/truecredit, etc), and hard hits (creditors).

Might wanna bone up on your facts.

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Barefootsies

Correct.

I find banks, and creditors have my score about 50 points higher than these websites report.

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TheSenator

Being credit free is a good thing. Don't let anybody tell you have to go into debt to build good credit. The ability for me to have purchasing power will be the equity in my house(at the minimum).

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Barefootsies

Stand corrected.

IF you are a property owner... The rules of the credit game are different then if you are a renter.

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Wagerboy

Im a sub prime finance manager

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Brother Bilo

My credit was garbage, but I bought a truck and made all my payments on time for a year and now it's up over 700. Easy enough.

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Peaches

"Credit free" is no longer something good, IMO. Businesses are checking credit reports for prospective employers, insurance companies are checking reports if you want a policy, etc.

Once I got out of the hell that resulted from my marriage, I got a secured credit card and some gas cards. Also had a couple of car loans where I had a co-signer. After you pay those "starter" credits for a while, you get more and more offers.

I've "made" a lot of money on zero interest loans - I had over $6K in dental work that was 0% for a year and most of the furniture I bought was 12-24 months 0%. JUST MAKE SURE TO PAY IT OFF A MONTH BEFORE IT'S DUE and pay it with some sort of proof of payment.

I talked to a head honcho for Room To Go and he said over 60% of their zero interest folks don't pay on time, reverting to absurd amounts of interest. Dumb, dumb, dumb.....

Violetta

Get a stable income, and spend the money smart

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12clicks

learn how to gold down a job and don't get the fully loaded Hugo when there are more economical vehicles to lease

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Cory W

Brad,

Have you thought about working with your bank?

I had some credit issues from my early 20s. I simply took out a personal loan from my bank, then 5 months later got a really good rate on a Credit Card. If you have been with your bank for a while, it usually goes a long ways.

Also, things like revolving store accounts and cell phones are usually tougher to get if your credit is low. If you can get your hands on a CC, the problem will be solved pretty quickly.

However, I do warn you to really look at what you are doing if you go the secured way. I would definitely try to get that through your bank before you use an outside source. Many of those CC companies cater to bad credit people and they have numerous tricks up there sleeves when it comes to keeping your credit in the gutter, if you know what I mean.

Just go in and ask your bank what you can do. Be honest with them. They probably can fix you up.

Good Luck,

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BradM

Again you prove you have nothing of value to share with anyone, regarding any topic.

After Shock Media

No there is nothing wrong at all with starting out with perfect credit, the whole earning it is half the battle behind maintaining it can be said about anything you give to your kids. It is along the same lines as being super rich and then giving and leaving your kids nothing at all since they need to be taught how to earn it to keep it. Though maybe you feel that way.

Ideally a parent would teach a child about finances while they are growing up. Explaing about credit, about loans, how to understand interest, and so forth because guess what? Our schools do not do this.

I remember when I was around five and going to the bank and getting my very first savings account. I remember my great grandparents taking me their every week so I could give the banker guy at least 20% of my allowence or what I earned that week to put into savings and then how I could spend the rest if I wanted to or I could deposit more and buy something more expensive latter. Yet they pounded into me that I always needed to set aside 20% of all my income into a savings account. Latter they then explained CD's to me and the effects of interest and even compound interest. I personally loved my little khaki bank book and having the banker man sign it each week with my new balance.

It did not take me long before I was adding most of my money to my savings account as I wanted this hotwheels racing track. Then low and behold by the time I had enough to get it I actually had changed my mind (hell I was a kid) and I then wanted a new bicycle. I still had a ways to go but my great grandparents always had side jobs for me to do to earn a fair wage as they never over paid me and I also learned to find myself other jobs by asking their neighbors and such if they needed anything done as I was trying to earn myself enough money for a new bicycle. Despite that I already had one and really did not need a new one aside from that I saw a real cool one that looked more like a motorcycle.

In reality I only took money out of that account a few times and oddly it was to buy other people gifts for fathers day or Christmass. I never puchased hat bicycle I wanted out of my savings. When I finally did get myself a BMX bike I built it myself by ordering everything part by part or buying individual parts at the bike shop. By that time I already had my own paper route and was mowing lawns.

Shit I ramble, what I am trying to say is that you can properly teach a child about credit, interest, and money well in advance of them turning 18 and they will not ruin anything when mommy and daddy are not in control. You would just be giving them a very strong head start that can save them thousands but possibly tens of thousands of dollars or more.

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12clicks

really?
I'm not the one asking on an adult chat board how to build credit.


who'd have thought a big success like you would have credit problems?



hahaha, ok. I couldn't say that with a strait face.

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BradM

I don't have credit problems, I don't have ANY credit. Dipshit. For reasons which are none of your business.

12clicks

son, there's only one reason you don't have credit.

but we can go back to pretend land again where you're a bigshot and there are many reasons to have no credit.

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madfuck

have your parents put shit in your name, lol

sltr

spent the last 4 years rebuilding my credit from <500 and almost 50 negative items being reported.

i paid many of those accounts back and wrote letters to them to get the item removed, checked my reports every month, some places would not remove the item so i disputed those and got them removed, i used lexington law at first and after they cycled through i handled the remaining ones myself,
for positive items, i got a secured card, then a used car financed at the lot but they reported to agencies, traded that ride in on a more expensive car with a better finance rate with an accredited bank but still high &#37;,
bank switched card to unsecured, and continue to increase the limit.

it's a lot more detailed than this but my score is now 725ish and i have zero neg hits. my fcr.com value is 755ish

it's still not off the charts but after 750ish it gets quite ridiculous to get the score higher, ask around and see if anyone you know is 790-800.

my experience in building my score reflects the intelligent comments posted in this thread except that i have found my # changes a bit more positively when do in fact pay my card down entirely- it increases the total amount of credit the systems determines i have available at that moment. but i run the card up to $6-9K every month and pay it down to zero, like a poster earlier suggested, i've tied all my auto bill pays into that card and then i check it every month when i pay it.

i've turned my credit into a hobby, i enjoy taking care of it and looking at the reports and stroking it and petting it!!!!!1:-)

and yes, after achieving serious equity in property the need to have the ability to acquire debt is lessened.

BradM

Ah, so you know the reason is because I am an Immigrant. Okay good, glad you knew that so you didn't sound like an uninformed idiot like all of your other posts about me.

You sir, are just stupid.

baddog

http://www.hfc.com/ and Sears. Buying a car helps too.

I doubt paying them off right away will help much, but it has been a long time since I had to worry about "establishing" credit.

12clicks

odd, my Canadian friend living in LA has credit.

Want to try a different lie?
Hahaha

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