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NoSoup · 05-21-2003, 07:00 PM

I think that you should definately get a credit card, but make sure you keep handle on it. I am a loan officer, and I see far too many people come in to apply for an auto loan, mortgage, etc. that are declined simply due to lack of credit. Here is some credit advice, and by no means am I licensed to say this, these are just things that I have observed and learned from.

First of all, most anywhere you go your interest rate will be based solely on your Empirca (FICO) Score. This is a score that the Credit Reporting agency (ie TransUnion, Equifax, etc) assign you. Once you have obtained some type of credit (ie Credit Card) you will be assigned a score based on your credit performance after 6 months. There are several things to note here. The Credit Agencies have no idea if you pay off your Credit Cards every month. Once a month any lender that you have is required to report your current balance to the agency. If you have your card maxed out the day before you make your payment, this will still reflect poorly on you. Also, the Credit Reporting Agency keeps track of the highest balance you have ever had on you card. Try not to ever go above 60% of your limit. If you have, increase your limit and don't go higher than the origninal.

Of course, none of this matters if your account goes delinquent and you go to collections. If you are delinquent, that will remain on your credit bureau for at least seven years, and up to ten. It may seem like a pain now, but paying your bill on time is terrible important to your financial future.

On the subject of paying your bills on time, I am going to be one of the few people to say that it is ok pay your bills a little late, but only do this if you have to, seeing as how it is a pain in the ass to have to pay all those late fees and your interest rate will probably triple. However, if money is short, as long as you pay your bill within 29 days of the due date, it will not report to the Credit Reporting Agency. On the 30 day, it does. (Make sure the check gets there on time!)

Well, that's about it, hope this will help a few of you out. If anyone has any more questions, let me know.

Good Luck

Oh- on a side note, establishing credit is a bitch. I would suggest contacting either a local Bank or Credit Union and seeing if they offer secured cards. (basically, you give them $X and they give you a card with a $X limit on it. If you don't screw up, eventually they will give you your money back and you will have an unsecured card. They don't keep your money forever, they just hold onto it just in case you max out your card and never pay your bill.

05-21-2003, 07:00 PM	#5 (permalink)
NoSoup Non-Rookie Location: Green Bay, WI	I think that you should definately get a credit card, but make sure you keep handle on it. I am a loan officer, and I see far too many people come in to apply for an auto loan, mortgage, etc. that are declined simply due to lack of credit. Here is some credit advice, and by no means am I licensed to say this, these are just things that I have observed and learned from. First of all, most anywhere you go your interest rate will be based solely on your Empirca (FICO) Score. This is a score that the Credit Reporting agency (ie TransUnion, Equifax, etc) assign you. Once you have obtained some type of credit (ie Credit Card) you will be assigned a score based on your credit performance after 6 months. There are several things to note here. The Credit Agencies have no idea if you pay off your Credit Cards every month. Once a month any lender that you have is required to report your current balance to the agency. If you have your card maxed out the day before you make your payment, this will still reflect poorly on you. Also, the Credit Reporting Agency keeps track of the highest balance you have ever had on you card. Try not to ever go above 60% of your limit. If you have, increase your limit and don't go higher than the origninal. Of course, none of this matters if your account goes delinquent and you go to collections. If you are delinquent, that will remain on your credit bureau for at least seven years, and up to ten. It may seem like a pain now, but paying your bill on time is terrible important to your financial future. On the subject of paying your bills on time, I am going to be one of the few people to say that it is ok pay your bills a little late, but only do this if you have to, seeing as how it is a pain in the ass to have to pay all those late fees and your interest rate will probably triple. However, if money is short, as long as you pay your bill within 29 days of the due date, it will not report to the Credit Reporting Agency. On the 30 day, it does. (Make sure the check gets there on time!) Well, that's about it, hope this will help a few of you out. If anyone has any more questions, let me know. Good Luck Oh- on a side note, establishing credit is a bitch. I would suggest contacting either a local Bank or Credit Union and seeing if they offer secured cards. (basically, you give them $X and they give you a card with a $X limit on it. If you don't screw up, eventually they will give you your money back and you will have an unsecured card. They don't keep your money forever, they just hold onto it just in case you max out your card and never pay your bill. Last edited by NoSoup; 05-21-2003 at 08:55 PM..