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Thread: Ways to establish credit history?

  1. #1
    resident Humboldt's Avatar
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    Ways to establish credit history?

    Can anyone wih some financial knowledge please suggest ways I can establish some credit history?

    I applied for a credit card (first one) and was denied. I don't have a bad credit history though, according to my credit report, but no credit history at all.

    When I talked with a Citibank rep., they suggested a "SecureCardProgram" in which I give them a certain amount $ deposit for the first 18 months.

    Not that I want someone else to earn interest off my $300 for 18 months, but at this point that's what I'm about to do, as that's the only way I know of so far of establishing any credit history.

    Does this sound like a good idea, or are there other credit-card companies that might allow a "no credit offender" like myself to get a card with a decent interest rate?

    Thanks

  2. #2
    Elite Member Jim's Avatar
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    Get A card, and buy crap. Pay it ALL off ON TIME.

    That's really the only way to get SOME credit, is to find one card to give you a chance.

  3. #3
    Elite Member Norm's Avatar
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    Put a few bucks (500 - 1000) in the bank and borrow that much, using what's in your account as collateral. Pay it back, and borrow again. That will give you a good credit rating.

  4. #4
    ♫♪ ♫♪ ♫♪ ♫♪ downhill's Avatar
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    Funny thing about credit cards...they really arn't worth squat as good credit goes, but everything if you don't keep your payments up.

    Finance a car...your phone, cell phone, rent....all those are excellent ways to establish credit.

    Funny, when my daughter first turned 18, she got a flood of adds from companys like The Bon, ect ect...for cards with a credit of a hundred bucks....They love to go after kids....the kids being lax on payments ...and such..don't keep them up. The stores make a fortune on late charges.

    Humbolt, can you show a history of making good on your rent payment?

  5. #5
    resident Humboldt's Avatar
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    Originally posted by downhill
    Funny thing about credit cards...they really arn't worth squat as good credit goes, but everything if you don't keep your payments up.

    Finance a car...your phone, cell phone, rent....all those are excellent ways to establish credit.

    Funny, when my daughter first turned 18, she got a flood of adds from companys like The Bon, ect ect...for cards with a credit of a hundred bucks....They love to go after kids....the kids being lax on payments ...and such..don't keep them up. The stores make a fortune on late charges.

    Humbolt, can you show a history of making good on your rent payment?
    Sure, I've been in the same place for about 5 years now, one landlord. You think maybe I could get some sort of statement from him or something?

  6. #6
    Advanced Member christine186's Avatar
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    You need to apply for department store cards or gas station cards before you can apply for a Visa or Mastercard and no a letter won't help you because if a landlord was hunting you down for non payment, it would be in your credit history.
    Good luck with the apps.

  7. #7
    Fantastic Folder! lansens's Avatar
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    Try getting a Capital One card. I have had some bad credit in the past (still trying to fix it) and they started me off with a low limit. Pay your stuff on time, and every six months you can get an increase.

  8. #8
    Advanced Member tr87526's Avatar
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    This is my line of work.

    Most suggestions are good. Try gas cards, Lowes, home depot and yes most high rate credit cards (14% or more). Do not pay them off each month at first. You need to show a running balance for at least 6 months. Try to apply online for gas cards.

    If you do have a savings account your bank should let you use it as collateral.

    What out for companies that charge Application fees (a fee to apply or a processing fee)

    Do not apply for more than 4-5 places during a 1 yr period (to many inquiries on your Credit Bureau is bad also.

    Try to live at the same residence for at least a year. That goes for the job too.

    Have a checking account (and a savings if possible)

    Once established, pay promply!!!!!!!!!

    Then when you do get good credit, pay off all high rate cards and close them! Open but zero balance accounts still count against you when you apply for future credit.

    Here is a good website on Horror stories where people were taken by bad lending insitutions. Most are the consumers on fault but the don't want to admit it, others are just rip off companies:

    www.consumeraffairs.com

    Good Luck

  9. #9
    resident Humboldt's Avatar
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    Originally posted by tr87526
    This is my line of work.

    Most suggestions are good. Try gas cards, Lowes, home depot and yes most high rate credit cards (14% or more). Do not pay them off each month at first. You need to show a running balance for at least 6 months. Try to apply online for gas cards.

    If you do have a savings account your bank should let you use it as collateral.

    What out for companies that charge Application fees (a fee to apply or a processing fee)

    Do not apply for more than 4-5 places during a 1 yr period (to many inquiries on your Credit Bureau is bad also.

    Try to live at the same residence for at least a year. That goes for the job too.

    Have a checking account (and a savings if possible)

    Once established, pay promply!!!!!!!!!

    Then when you do get good credit, pay off all high rate cards and close them! Open but zero balance accounts still count against you when you apply for future credit.

    Here is a good website on Horror stories where people were taken by bad lending insitutions. Most are the consumers on fault but the don't want to admit it, others are just rip off companies:

    www.consumeraffairs.com

    Good Luck
    Thanks for the tips, ummm...tr87526 You're exactly who I hoped would reply (well, someone in your field, that is).

    Can you explain the "running balance" a little bit more please? So I should intentionally NOT pay them right off the bat each month for the first 6 months? I need to intentionally allow a small amount of debt to build up so I can pay it off, or ???

    Thanks

  10. #10
    resident Humboldt's Avatar
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    And how about the "SecureCardProgram" that I mentioned in my first post? Does that sound like a good one or no?

  11. #11
    Advanced Member tr87526's Avatar
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    Humboldt,

    Securecards are fine if you can find a good/fair one. You have to watch out for the fees (including the hidden ones they didn't tell you about - very fine print). Watch the rate, just because you do not have credit or bad credit does not mean you have to have a 24+ % rate. Once you exceed 18% so much of your payment go to interest that he balance never comes down and even in some case the min payment does not cover the interest charged for that month.

    Sears, I love'em but they are a good example. On my last bill it said my min pmt was $34 but the interest charged was 33.68 so if I only pay the min pmt my balance goes nowhere.

    I use to have a list of good secure card companies, let me look it up and post it.

    As for running balances, I have seen people get some type of credit and charge (lets say) $100, then the bill comes in and they pay $100. That's good but not for establishing credit. Lenders want to see history and 6 months is the min.

  12. #12
    Advanced Member tr87526's Avatar
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    Here's another good site. Click on "find a credit card" Please read all terms before doing applying for anything.

    http://www.creditinfocenter.com/

  13. #13
    Advanced Member tr87526's Avatar
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    Here you go, from the good folks at bankrate.com

    Secured Credit cards:

    http://www.bankrate.com/brm/rate/cc_...=All&cc_freq=1


    Read all terms for each card!!!!!!!!!

  14. #14
    resident Humboldt's Avatar
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    Thanks a lot for all the info., I really appreciate it

    So for 6 months or so the best thing to do is make sure to use the damn thing but no pay it off, or pay off most but not all of it, or what? Could you please explain that part a little bit more? I understand about the interest rates and all, but am not sure I understand how much debt I should allow to build up or for how long.

    Thanks again.

  15. #15
    Game Freak Gaming-Module's Avatar
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    FYI. You need three sources of credit to buy a house.

    Now ya know, and knowin is half the battle, er somethin...

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