Building Credit

Keli0715 · July 2014

Hi,

okay so I am looking for build my credit and im not sure what my next should be? I made bad credit mistake when I was 18 and I would really like to get on track before my boyfriend and I decide to tie the know which I know is soon? and I really need advice on what to do first. I already have one secured account and I was wondering if I should get another or what I can do to help boost my score>

Thanks

MommyLiberty5013 · July 2014

How long ago was the mistake that you made? How many years? What was it for? Some bad credit mistakes are "worse" than others and take less time to fix.

jtmh2012 · July 2014

There is no "quick fix" to building your credit score. The only way to fix it is to use credit responsibly. That means making all your payments on time and in full on any credit cards and loans you happen to have.

KatieCutie05 · July 2014

What happened years ago, did you default? If so is it paid?Get a copy of your credit report, and any outstanding debts need to be paid. My sister literally paid one of those scam artists to rebuild her credit, but ignored the 2k credit card bill that she knew was in collections. You can't polish a turd. The only way to rebuild your credit is to be current on all your debts, make early and additional payments, and even that takes time.

Xstatic3333 · July 2014

PPs are right that it just takes time. If you currently have a CC open I would: 1) make sure the balance is paid off, and 2) use it to charge one thing a month, which you then pay right off. If your credit is bad I wouldn't open a new card right now, and I also wouldn't attempt this method if you'll be tempted to run up a balance. Avoiding that is most important.

What is your secured credit line-a car I'm guessing? My H did have a big credit score jump when he started consistently making above-minimum payments on his car loan. It may have been just a coincidence as his old mistakes dropped off, but hey, it doesn't do any harm!

Katie also has great advice to make sure your credit report is accurate. I use the service Credit Karma to monitor my credit report, but others on the board request their free reports by mail once a year or have other techniques.

Sisugal · July 2014

Ditto previous advice. Do NOT open new accounts. Pay in full every month - and pay extra on current debts --- get OUT OF DEBT and then stay out of debt.
Read Total Money Makeover by Dave Ramsey - great for getting out of debt
Read Smart Couples Finish Rich`by David Bach for setting up finances as a couple that works for both people.

After that - work on building an emergency fund of 6 month's expenses- the unexpected in life does happen - be prepared.

hoffse · July 2014

I'm wondering if the secured line is reference to a secured credit card?

If so, was that the only card you were eligible for? Unsecured is usually better, but you have to be able to use credit responsibly for your credit to improve. Typically secured cards are for people who can't get credit in other ways.

We can give you more targeted suggestions if you provide additional details. How old are you? What happened where you were 18? What is this secured line you speak of? When are you getting married? Do you know your credit score now?

And onward.

FabulousMrs.P · July 2014

Is it s secured credit card? Do you know if your secured credit card will eventually become an unsecured credit card? I didn't have any credit when I got out of college, so I got a secured credit card. I used it for groceries every month and paid it off promptly each month. In a year's time they changed it from secured to unsecured. I just kept using it and paying off the balance each month.

Keli0715 · July 2014

hi everyone sorry I didn't provide enough details the first time but I am 26 now and newly engaged and at the age of 18 during college I collect a total of 5 credit cards like target, walmart, vs, and American eagle etc. and I didn't do a good job a paying them off but I have caught up on that debt and my credit score is mid 600's now and I was wondering if I should get another credit car to help see how responsible I am now because I pay all of my bills on time and I don't have any major outstanding debt except for my student loans which total about 30,000. I am in the process of car buying and didn't know if I should wait or try to make my score stronger.

formerlyGDaisy09 · July 2014

are any of the accounts you had when you were 18 still open?

Paying your student loans on time and doing the same with a car loan will help your credit score. if you have one of the other cards open you might charge a couple things a month (like maybe gas) and pay the card off in full every month.

opening a new card may hurt your score a little, and could get in the way of getting a car loan(your score gets dinged a little when you have newer accounts)

ETA: also are any of the cards you had before (if they're still open) backed by a major credit card company (visa, mastercard, etc), store cards don't do a lot on their own.

hoffse · July 2014

If you are in the process of buying a car, I wouldn't open a new card. It takes a long time to build credit, and opening/closing cards will actually lower your score for a few months until your credit recovers.

H and I are in the process of buying a house and have 3 or 4 cards we will close and 1 card we will open AFTER the mortgage has been secured and everything closes. It's not worth messing with the credit score right before a major loan gets put into place.

irishfemme · July 2014

One place with great advice is also:

www.creditboards.com

Lots of expertise and experience over there!

MommyLiberty5013 · July 2014

Don't finance your car for longer than 3 years. And, if you can avoid a car loan altogether, even better.

formerlyGDaisy09 · July 2014

if she's looking to build credit financing a small part of the car and paying it off quickly to avoid lots of interest could do that...

Xstatic3333 · July 2014

I would wait another year to buy a car if you can. My husband needed to finance a car (his wasn't fixable and we weren't living MM yet) with mid-600s credit and the best rate he could get was 6.9%. It's an affordable used car (good!) but now even though his credit is great it's too old to refinance.

If you were cleaning up your mistakes 5-7 years ago, the negative marks will start dropping off soon. If you do have to get a car, it will help your credit at least. My H's is great, and we had no problem with our mortgage less than 1.5 years later. I would definitely not open a new card; just occasionally use the ones you have.

I will also make a plug for avoiding big car payments. I hate having a payment, and even though it makes sense interest-wise to get a small loan and invest the difference, I think I'll try to pay cash for my next car. Something you could pay off in three years is a good compromise.

Keli0715 · July 2014

thanks everyone for all of your advice!!! i really appreciate it. i will definetly get a car loan for 3 years or less

Building Credit

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