Credit advice.

[slo65]

Howdy, I'm Sean I've met a couple of you so far on group rides, not all but i figure i could ask for some advice here, I'm 21, didn't get my first credit card till 20 or so, currently have a car financed (mom co-signed) under my name so that's helping my credit. But my question is, what's the best way to build credit? I have some friends around my age with pretty substantial cc debt, I've done pretty well so far, the cc company just upped my limit 500 dollars, I'm considering hiding it from myself . Don't wanna digress too much but yea, lets hear some opinions, the gentleman who handled the financing for my car said to keep a 30% balance on cc's. I've also heard the best way is to pay it off in full each month, so which is it

[Rockinthecasbah]

dont build a bunch of bikes and tell yourself you pay it off
pay it off each month and try to keep the limit low

[slo65]

Originally Posted by Rockinthecasbah

dont build a bunch of bikes and tell yourself you pay it off
pay it off each month and try to keep the limit low

yea trust me i get bike envy seeing everyones bike at rides (including your voodoo )

[Rockinthecasbah]

im still paying off stuff from my black market lame but I get by. paid for the voodo and intense bikes with cash and made my normal CC payments, just use the cards for gas or soemthing and thats all and pay them every month that way you build credit and it doesnt get bad

[un-kola]

If you have an installment plan,make your payments on time,don't max out credit cards,if you do use your cards pay them off at the end of the month,don't carry over c.c. balance from month to month.At your age it will take a little while.It's called trust .A lot of cards have a low interest rate when you first get them(under 10%),but if your late,it can shoot up to 25-28%.That's why you want to pay them off or close to it as you can,and not the minimum payment.It's the interest that'll kill ya.- Lloyd

[jbh65]

i have credit for the 20+ years and with the exception of my mortgage and student loans I have never carried a balance.

Refi the car into your name so that it does not show on credit as a co signed acct. No major lender will give any credit to you for that.

Keep paying your credit cards and after 14 months ask for them all to be raised to their max credit limit. You want to show high credit limits with low or zero balances.

Don't apply for a zillion cards either. You do not want your credit pulled more then 3-4 times per year.

[bvader]

I have excellent credit...worked hard for it.
What jbh65 said above is very sound advice

I will add one very simple, very basic, but absolutely essential piece of advice.

Live Small and Live Within your Means....especially in this economy.

Translated only use the credit to build credit, not to buy things you can't afford.

gawd...I sound like my Dad!

[dssgaffler]

I'm in the banking industry so we deal with FICOs on a daily basis. So far, all of the responses you've got have been spot on accurate. At my bank to be considered for a home loan or auto loan we require you have a minimum of 5 trades (accounts) of at least 24 months open. What that means is you need to have at least 5 credit accounts (installment or revolving) that have stayed open for at least 2 years. One last tip I can give you is to keep at least 1 credit card or revolving account open from the now until the end of time. Having an old account that has been open for a long period of time can help push you into the high end of the FICO spectrum. Good Luck!

[slo65]

thanks for all the responses so far, i live within my means, though i've been thinking about trading in the Audi (used) i got recently for something a lil better on gas, it helps that i've been commuting to work on the bike though

[sandblast]

Don't get married. I'm 28 and my Fico has been great since I was about 20. By the time I was 26 I owned a nice 3 bedroom house and had a hgh 700's fico score. I had a paid off Buell and 1 car paid off and was able to work for myself with my brother. Awesome.
Then came my divorce- even though she did'nt really go after me for money I lost my house (not yet actually) and my credit because of that went to hell. All my other stuff I have been perfect with but it doesn't mean anything because the house. (She wanted to stay in it, her family is rich and said they would help her so I let her have the house- now she is not making the payment and I cant because I have to pay rent.
I don't mean to tell you my life story- but that really hot girl at the bar- don't marry her, and your credit in time will build up fine. .

[slo65]

Originally Posted by sandblast

Don't get married. I'm 28 and my Fico has been great since I was about 20. By the time I was 26 I owned a nice 3 bedroom house and had a hgh 700's fico score. I had a paid off Buell and 1 car paid off and was able to work for myself with my brother. Awesome.
Then came my divorce- even though she did'nt really go after me for money I lost my house (not yet actually) and my credit because of that went to hell. All my other stuff I have been perfect with but it doesn't mean anything because the house. (She wanted to stay in it, her family is rich and said they would help her so I let her have the house- now she is not making the payment and I cant because I have to pay rent.
I don't mean to tell you my life story- but that really hot girl at the bar- don't marry her, and your credit in time will build up fine. .

no worrys, best of luck with you and yours , i owe about 400 on my CC, gonna pay it off within the next couple months, then just purchases i can pay off at the end of the month, appreciate all the advice so far

[DISCO]

I see what's up, you can't increase your limit or get anymore trade lines until your balance is below $250. The ideal model is 30% of the limit or less, but sometimes you will get no interest or special financing. Don't throw away money on a new car, it's always a depreciating liability and is not necessary until the old one is driven into the ground. Some folks will tell you debt is bad, others may warn you to stay away from women. The only fact you can trust is that "banks will lend you all the money you need, as long as you can prove you don't need it (Mark Twain)" So keep your balances low, stick to cards you can use anywhere like a Visa or MC so that you can buy food, books, what ever until you graduate. In the meantime just finance every cent you can if you are pursuing a degree, if you do it right and save the remainder you might have enough left over to pick up some property and I don't mean a residence because that is not an asset either. best of luck with it.

[Rockinthecasbah]

Rich Dad poor dad at its best

[DISCO]

More like no dad with younger siblings in college.

Anyway all those millionaire next door type books preach the same lesson

1. pay yourself first (put money away, you will need it)

2. Live below your means (kind of like afterlife preparation, sacrifice now for eternal peace)

3. never quit your day job (for nothing else benefits,you will owe it to your family)

4. make a budget and don't go over ( I use cash so it's impossible to over spend)

5. win in the margins (always keep an ear out for a chance and don't be afraid to take it)

most people make their first million on the side by going online instead of plopping down in front of the tube. I'm not saying to try Amway, Vitamin MLM, or Pre-Paid legal but lots of folks do better there than at their day job. For our generation having your own E-bay store is about the easiest way to make money while you sleep. It can be labor intensive but it made me almost $20k last year working about ten hours a week.

[RustyIron]

Originally Posted by slo65

the gentleman who handled the financing for my car said to keep a 30% balance on cc's. I've also heard the best way is to pay it off in full each month, so which is it

He was no gentleman. He was a babbling imbecile. I can't believe he would have the gall to tell you something like that. It's good that you're skeptical of people whose goal is to separate you from your money.

One tip: Re-evalauate your goals. This "build credit" thing that you mention--it's not a legitimate goal. "Building credit" is building nothing. It's a nonsensical term invented by people who want to separate you from your hard earned cash.

If someone walked up to you tomorrow and wanted to loan you a million bucks, what would that do for you? Be careful before answering this. The news is rife with examples of people who, through their own naiveté and the avarice of lenders, have squandered everything they had.

Personal economics is not unlike riding: planning, discipline and precision execution is what will get you to the finish line first, not the half-baked schemes of mid-pack riders and used car loan peddlers.

[kanga]

One thing that helps, as mentioned is your ratio of balance to available credit. It will help your rating to have a higher limit, as long as you use it less. So keep getting that limit raised, but don't use it.

Set up automatic minimum balance payments to ensure that you're never late on the minimums, and then pay extra in additional payments, up to the complete balance, more frequently. I typically pay my credit card weekly, based on what I've used that week, and what I have available to pay. You can avoid paying interest that way, presuming your card has an interest-free period. Just leave some small balance at the end of the month to show you are using the credit, as that end of statement period balance is usually what gets reported, not what you spent and paid off before the statement.

Just some things that seemed to have helped me get through...