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How do you build credit?Posted:

FredNJ
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I just turned 18 & I want to start early so I can build my credit but what are the first steps? I know allot of you guys on here are older & know your stuff so I was just wondering. This Saturday I was going to buy a car but no credit & they said its fine but paying the payment every month would build my credit up too right? Would be very much appreciated if someone could give me the steps on how to build credit.
#2. Posted:
G-59
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Get a credit card and prove you can pay it back on time
#3. Posted:
BJP
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If you have taken out a phone contract in your name then they will probably have already checked your credit score. At your age there shouldn't be any reason for you to be in crazy amounts of debt or to have multiple credit cards so you shouldn't worry too much.

Some people recommend getting a credit card and making a few small purchases and proving you can pay back on time then getting rid of it. - Never personally done it.

Check this website for a load of good information.

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BJP
#4. Posted:
Craig
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Credit cards and phone contracts are probably the easiest way to do this.

I have a credit card myself and has saved my bacon a few times in the past. But to boost your rating you need to prove you can pay it back on time, every time.

If you miss a payment you're going to regret that for a while...

Credit cards are really handy things, unless you're an idiot with money.
#5. Posted:
M3
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I am 21. When I was 17 I bought my first car for cheap (a 2000 bmw 328i) luckily my stepdad was a mechanic and he knew how to fix things on it. Over a year and half i fixed this car up, made it real nice with rims, dinan engine parts etc... turned around and sold it for $5000. At 19 with still no credit, I decided to use this money to put down on a car payment at a dealership. ( a 2008 bmw 335i coupe ). financed it for $12k. after about 6 months of on time payments my credit score started out at 650. Then i started getting credit cards, paying them on time and such and since then my credit score is around 720.

Point is, im not saying get loans and credit cards, but in order to establish credit, you need to start out showing that you can re pay loans and debts etc.

Ask a family member if you can be an authorized user on a credit card of theirs and pay them back whatever you use. After a couple months of being an authorized user, this will show up on your credit report. But make sure whoever you get to do this for you doesnt have outstanding balances on their cards, because it will show up on your credit report as you have that balance as well
#6. Posted:
Dusky
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You don't need credit for a loan it just helps for good interest rates.

Credit cards (which are bad) are one of the easiest ways to build credit if you use it responsibly.

Paying your car payment on time also helps.

Basically keep your debt to income ratio low and pay your revolving balances on time and you should be fine.

Try to get a loan through a credit union. They offer great deals.

How I know this is because I went from no credit to a 715 in about a year.
#7. Posted:
Nathan
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Get a credit card but only buy small things at a time pay it back then get any the item and so on
#8. Posted:
Spencer
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Dusk wroteYou don't need credit for a loan it just helps for good interest rates.

Credit cards (which are bad) are one of the easiest ways to build credit if you use it responsibly.

Paying your car payment on time also helps.

Basically keep your debt to income ratio low and pay your revolving balances on time and you should be fine.

Try to get a loan through a credit union. They offer great deals.

How I know this is because I went from no credit to a 715 in about a year.


I agree, I love how you worded it too sounded legit until the end when you made it sound like one of those "I made $9000 in one week with this trick" ads at the end.

But I would say a credit card with small purchases will for sure help, and in the long run when you're taking out a loan for a house or car or something that will help increase your credit of course if you're paying it off.

I'm also curious about everyone mentioning phone bills I don't have a credit card or anything credit related and there was no issue with me going and setting up my own phone plan even though I thought there would be! Would be willing to hear opinions on that.
#9. Posted:
Dusky
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Spencer wrote
Dusk wroteYou don't need credit for a loan it just helps for good interest rates.

Credit cards (which are bad) are one of the easiest ways to build credit if you use it responsibly.

Paying your car payment on time also helps.

Basically keep your debt to income ratio low and pay your revolving balances on time and you should be fine.

Try to get a loan through a credit union. They offer great deals.

How I know this is because I went from no credit to a 715 in about a year.


I agree, I love how you worded it too sounded legit until the end when you made it sound like one of those "I made $9000 in one week with this trick" ads at the end.

But I would say a credit card with small purchases will for sure help, and in the long run when you're taking out a loan for a house or car or something that will help increase your credit of course if you're paying it off.

I'm also curious about everyone mentioning phone bills I don't have a credit card or anything credit related and there was no issue with me going and setting up my own phone plan even though I thought there would be! Would be willing to hear opinions on that.


It's sometimes easier to get things without credit vs having bad credit. Usually places just don't want to see missed payments or any collections on your credit report. That end part was me saying that if you do it right it doesn't take you long to get good credit. I wish I had $9000 if I did I'd be in a new car right now xD.
#10. Posted:
002
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A car payment will raise your credit. VERY slowly unfortunately lol. My payment is $213/mo, banks want to see you pay this off every month and if you pay more it's better for you because they report that you over paid on time. I pay $220/mo.

Next option is a credit card. NEVER max it out, all you want to do is 1/3 of the max and pay it off in full. If you max out your card you become higher risk. My max is $500 so I only use $150 each month and pay it off in full.

Past that it's anything that's a monthly payment. Phone bill, rent / mortgage, etc.
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