How to build your credit?

[SupaVillain]

My bad if this has been made before.

Background:
I am a 23 yr old male who currently lives in the DMV. I have a job being an audit associate with a Big 4 accounting firm. I have saved up about $7k in my ally savings account. My credit score (creditkarma) shows I have 606. What do some of you guys use to build credit?

 

[Ol’Otis]

Self Credit Builder Loans (formerly Self Lender)

 

[Obreh Winfrey]

Pay bills consistently and on time, don't run up a bunch of credit card usage, don't open a lot of lines of credit in a short amount of time. Make decisions and do the right thing and it'll start to rise.

 

[CopiousX]

I got you breh.

Do you have no credit? Or bad credit? Believe it or not, bad credit is easier to work with.




Co-signing onto an older person’s credit line is the quickest way.

• They add you as an authorized user, but you tell them to keep their card.
• You get credited for their length of credit AND their credit limit.
• Even if you don’t got family or friends you can attach yourself to there are online sites that you can pay your way into somebody else’s card.
• After 6mos, you should see at least a 50+ point increase.

Also, you can get a secured card with more or less no verification. These are normally issued at credit unions, breh.

• You basically give the bank (at least) $300 , and they credit you 300dollars on an official credit card.
• You basically borrow against that 300 for 6mos to a year(depending on your institution).
• After that trial period, they will give you back your $300 and then you keep the 300credit line for future use. This establishes a good payment history.

Finally, have you tried the “simple” steps to manage your already existing credit file? These are just little habits that work with the weighted measures that credit bureaus use.

• First, if you already have credit card(s), you pay them down until 10-19% of your credit limit.
  • This is called utilization and it is weighed 2nd heaviest after credit length.
    
    
  • You see the results of this literally a month after doing it
  • Do not pay them down to zero. Complet

• Second, you pursue a diverse credit profile. This is lower weighted but it has a nice effect.
  • Have at least 2 revolving accounts (secured cards, credit cards, store cards, [y’all can correct me on this, but I think charge cards also fall in this category] ) Easy to get.
  • a student loan (even a tiny one that you can pay off in 2or 3 months is fine). Easy to get.
    
  • A personal loan. difficult to get with bad credit
  • Car loans are generally bad and have instantly bad effects on your credit, but in the long run they add to you length of history.
  • Longer history. Here, the longer you gave your credit history, the better it gets just like car insurance.

Finally, do you owe anybody anything?

 

[SupaVillain]

I got you breh.

Do you have no credit? Or bad credit? Believe it or not, bad credit is easier to work with.




Co-signing onto an older person’s credit line is the quickest way.

• They add you as an authorized user, but you tell them to keep their card.
• You get credited for their length of credit AND their credit limit.
• Even if you don’t got family or friends you can attach yourself to there are online sites that you can pay your way into somebody else’s card.
• After 6mos, you should see at least a 50+ point increase.

Also, you can get a secured card with more or less no verification. These are normally issued at credit unions, breh.

• You basically give the bank (at least) $300 , and they credit you 300dollars on an official credit card.
• You basically borrow against that 300 for 6mos to a year(depending on your institution).
• After that trial period, they will give you back your $300 and then you keep the 300credit line for future use. This establishes a good payment history.

Finally, have you tried the “simple” steps to manage your already existing credit file? These are just little habits that work with the weighted measures that credit bureaus use.

• First, if you already have credit card(s), you pay them down until 10-19% of your credit limit.
  • This is called utilization and it is weighed 2nd heaviest after credit length.
    
    
  • You see the results of this literally a month after doing it
  • Do not pay them down to zero. Complet

• Second, you pursue a diverse credit profile. This is lower weighted but it has a nice effect.
  • Have at least 2 revolving accounts (secured cards, credit cards, store cards, [y’all can correct me on this, but I think charge cards also fall in this category] ) Easy to get.
  • a student loan (even a tiny one that you can pay off in 2or 3 months is fine). Easy to get.
    
  • A personal loan. difficult to get with bad credit
  • Car loans are generally bad and have instantly bad effects on your credit, but in the long run they add to you length of history.
  • Longer history. Here, the longer you gave your credit history, the better it gets just like car insurance.

Finally, do you owe anybody anything?

My credit is 606. I have student loans and a car note. I was thinking about getting the Chase Freedom Flex card and use that to pay for groceries and gas.

 

[Dwolf]

I got you breh.

Do you have no credit? Or bad credit? Believe it or not, bad credit is easier to work with.




Co-signing onto an older person’s credit line is the quickest way.

• They add you as an authorized user, but you tell them to keep their card.
• You get credited for their length of credit AND their credit limit.
• Even if you don’t got family or friends you can attach yourself to there are online sites that you can pay your way into somebody else’s card.
• After 6mos, you should see at least a 50+ point increase.

Also, you can get a secured card with more or less no verification. These are normally issued at credit unions, breh.

• You basically give the bank (at least) $300 , and they credit you 300dollars on an official credit card.
• You basically borrow against that 300 for 6mos to a year(depending on your institution).
• After that trial period, they will give you back your $300 and then you keep the 300credit line for future use. This establishes a good payment history.

Finally, have you tried the “simple” steps to manage your already existing credit file? These are just little habits that work with the weighted measures that credit bureaus use.

• First, if you already have credit card(s), you pay them down until 10-19% of your credit limit.
  • This is called utilization and it is weighed 2nd heaviest after credit length.
    
    
  • You see the results of this literally a month after doing it
  • Do not pay them down to zero. Complet

• Second, you pursue a diverse credit profile. This is lower weighted but it has a nice effect.
  • Have at least 2 revolving accounts (secured cards, credit cards, store cards, [y’all can correct me on this, but I think charge cards also fall in this category] ) Easy to get.
  • a student loan (even a tiny one that you can pay off in 2or 3 months is fine). Easy to get.
    
  • A personal loan. difficult to get with bad credit
  • Car loans are generally bad and have instantly bad effects on your credit, but in the long run they add to you length of history.
  • Longer history. Here, the longer you gave your credit history, the better it gets just like car insurance.

Finally, do you owe anybody anything?

Better to go with a Credit Union or bank to get a credit card?

 

[NeilCartwright]

Remove all negative items, late payments, collections, repos etc.Even one late payment has a huge impact

Keep all positive accounts open, do not close even if you don’t use them anymore

Add positive accounts and keep them in good standing. A combo of revolving accounts (credit cards) and installment accounts (loans)

 

[SupaVillain]

So i'm about to try to get the Chase Freedom card. Y'all believe this the right route? Any pros and cons?

 

[Family Lives Matter]

Take out a low interest credit card pay for gas or something like that and pay back the full amount each month.

Don't use it for bullshyt .


Pretty much just pay bills regularly and don't take out a bunch of shyt in your name

 

[CopiousX]

My credit is 606. I have student loans and a car note. I was thinking about getting the Chase Freedom Flex card and use that to pay for groceries and gas.

That's good that you already have an established credit profile. Those student loans are usually deferred during schooling, so how did the score get so low? Did you miss a car payment lately or get something like an unforseen med bill?



Also, i highly recommend not applying for the chase card with a 606 score. Your application itself will lower your score, and this effect is compounded by not getting the credit line that you requested. Chase is known to be stingy with approvals AND hanky with credit limit increases( used for utilization, not for spending)


In contrast to the chase card, the secured card i was talking about earlier was a damn near garunteed bet, that would allow you to set your own "limit" from the jump. The new credit line would also offset the loss from getting your credit dinged. If you dont want to do the secured card path, capital one is known to be liberal with giving out cards to people in the mid to low 600s. I believe they start you with a $300 limit too.


If you do get the card, I agree with your plan to pay for necessities like groceries and gas. Just make sure you keep that revolving 10%-19% balance if you want to upgrade cards (or limits) later on.

Better to go with a Credit Union or bank to get a credit card?

Credit unions by a huge margin. In addition to your credit score, they consider your yearly deposits made into the bank and your length of service with them when approving an application. This would be perfect for op, @SupaVillain, cause it would only require him to transfer a portion of his 7500 savings into the credit union to get good grace from the onset.

Furthermore, Credit Unions tend to have excellent customer service(only discover card is better) and they tend to be understanding if an emergency pops up cause they often know you by name and can sympathize in a way that traditional banks cannot.



There is 1more perk and 1more bad thing about the Credit Unions, though.

• Perk. They typically offer lower interest rates than the major banks and credit companies(visa, c.One, amex), except for discover card which trends lower.

• Bad thing. Their benefits are trash.
  • travel rewards tend to be lacking.
  • Your cash back potential is typically limited to 1%, while major banks and credit firms commonly offer 2% or 3% back
  • No lounge access when traveling
  • Fewer store discounts because they only offer deals for local mom&pop stores, whereas C.One or amex can routinely give you 10% off on major national chains ranging from Starbucks, to Macies, to HP computers, etc

Keep in mind that receiving 10% back on an HP computer purchase, can easily offset the maintenance cost of a non-credit union bank card.

 

[Obreh Winfrey]

If you do get the card, I agree with your plan to pay for necessities like groceries and gas. Just make sure you keep that revolving 10%-19% balance if you want to upgrade cards (or limits) later on.

There's no real point in keeping a balance unless you're trying to massage your utilization percentage to temporarily increase your score, and 1%-9% has yielded the best results for me personally.

 

[CopiousX]

There's no real point in keeping a balance unless you're trying to massage your utilization percentage to temporarily increase your score, and 1%-9% has yielded the best results for me personally.

Fair point. That could work as a short term strategy to bump his utilization immediately before seeking a new credit line or higher limits.


Similar to to each person's individual penchant for risk in a stock portfolio, your personal utilization may depend on your scenario.


Personally, I tend to get credit limit increases when I'm above the 9% threshold, and these increases occur at 6mos intervals. I tend to get these increases like clockwork when I'm above 10%, but occasionally get skipped out on when I'm below that amount. Same for new lines.. additionally, many of my cards were received 2months or 4months or 8mos into the year, so these increases occur sporadically throughout one year, instead of just twice. So I tend to take the ,"if you ready, then you aint gotta get ready" approach by just remaining at that threshold.

 

[DEANBIGBROTHERALLMIGHTY18]

Remove all negative items, late payments, collections, repos etc.Even one late payment has a huge impact

Keep all positive accounts open, do not close even if you don’t use them anymore

Add positive accounts and keep them in good standing. A combo of revolving accounts (credit cards) and installment accounts (loans)

How to remove the negative items such has late payments

 

[NeilCartwright]

How to remove the negative items such has late payments

There’s letters you can send to remove inquiries, late payments, collections etc

If you can’t find em on google there’s people out here who do credit repair

 

[-deleted-]

I Was supposed to be done with TheColi but in the spirit of my recent credit experience I’ll make this my last post instead:

I had 2 accounts in collections plus a charge off account for the last 3-4 years. I finally managed to pay them off (collections were settled, charge off in full) and my score shot up over +40 points overnight. The best way is to make those payments and time-building; if you have collections or charge offs there is an invisible ceiling to how high you can “fix” your score. So kill the collections and charge offs (go for the Pay for Delete option) but especially the charge offs.

If left for long the charge offs will go into collections which is basically like getting killed twice; you’ll be penalized for the charge off first (which is basically collections under the OG creditor) and then hit again for when it enters collections! shyt a dirty game.