credit, how does it work Options

[Toyoca]

I just got an amex credit card. im new to having my own credit card. always went through my parents card (but it had my name on it w/e that means). i just got it cause i wanted to start building my credit. i dont completely know what that entails but i got one anyway lol. i basically just figured to get a car or house in the future i need credit so ppl will approve me. so is credit just using your card and paying bills on time? and if you do, you get a good credit score? is that basically it.

btw i got credit $2000. that sounds like a large amount to me given that i dont have that much a month lol. esp since i dont work right now. but sounds good to me lol. i just found it interesting cause my friends all started out with around 500 and i clearly didnt lol.

[BlackCelicaGT94]

dont go charging up a storm. i got one at 18 and it was for 1,000 and racked it up once and didnt pay anything for a year then i paid it off with insurance money and then did the same thing again and paid nothing for a year and then paid it off with tax return money and closed it. Now no one will give me a credit card and it sucks cuz id like to have a 500 dollar one for emergency use only.

i suggest buy like 200 bucks worth of stuff and paying a lil over the minimum every month so it shows u can make payments.

This post has been edited by BlackCelicaGT94: Oct 4, 2006 - 11:54 AM

[Supersprynt]

Amex wouldnt be my choice but I pay my MC off every month.

[Toyoca]

i wont ever charge over any amount of money i cant back up.

o so when the bill comes its just a portion of what i used that month and not the whole thing?

btw i hear amex is awesome. for customers not companies lol

[orvillescelica]

You got it right. I have a credit card... I charge on it, i pay the amount full when the bill comes, i have excellent credit.

[mzztoyota]

Just make sure you pay everything ON TIME, I think is the big thing, and if something ever happens where you don't have all of the money on time, at least give something, because your credit score will drop much more if you miss a payment than if you only pay a part of it....

I have one of those "safe" visa cards attached to an account, so I can't possibly spend money that I don't have. It works for me...

[Toyoca]

is there somewhere to look up my credit score for free? or can i only find it out through some kind of fee

[mzztoyota]

annualcreditreport.com is supposed to provide you with one free credit report each year, because believe it or not there is a law that says that every person is entitled to know their credit score...but last time I checked it wasn't working...

freecreditreport.com gives you a free one, if you join their site, which you have to pay to be a part of But see if you can find a loophole, a friend of mine supposedly did, I'm too lazy to care...

[saleeka]

If you started out with a $2000 limit, you already have a decent credit score from being conjoined with your parents. Also, keep in mind any time anyone looks at your credit report, your score drops. I used to work with collections back in the day, so I know the ropes when it comes to getting/keeping a high score...

[Supersprynt]

Why would your score drop if someone looks at it? Lenders & banks dont know your score off the bat so how are they supposed to make a decision w/o first looking at your score?

[confucious]

in regards to building your credit, buy something nice but not completely out of your range. if you have 500 saved up buy something worth 500-800. then, if your payment is say 40, pay 60. paying it off right away doesn't build credit as much as paying it monthly. each month you successfully make a payment, you get a mark on your credit as OK. Keep making these for about 3-5 years you'll be in good shape when its time to get a house.

[saleeka]

Why would your score drop if someone looks at it? Lenders & banks dont know your score off the bat so how are they supposed to make a decision w/o first looking at your score?

Notice the lack of logic- welcome to the wonderful world of credit

paying it off right away doesn't build credit as much as paying it monthly.

+1. Paying in lump sums dosen't show creditors a history of responsiblity.

[Supersprynt]

That doesnt make much sense. Responsibility is shown by making prompt payments, not the amount. I did some reading and the amount (as long as its the minimum) means less than the punctuality of your payment. Making payments on time counts more than how much. Paying it off full every month wont hurt your credit, costs less in the long run (interest makes things more expensive).

Have savings & or checking account. This helps towards credit. Also any loans you've taken out will count towards your score. Owning things like house, car also helps your credit score.

Keep the amount of credit cards to a minimum. The more you have, the worse it looks.

This post has been edited by Supersprynt: Oct 4, 2006 - 3:38 PM

[saleeka]

in a way it does make sense- but only for the creditors... They don't make money when you pay in full, so they see no bennifit in rewarding you for that... honestly, credit is prolly the most backwards thing I can think of- some of the stuff i've seen both creditors and debtors do to try and one up one another... I was younger when i worked with all that credit crap, and it scared me away from it... I have yet to get a credit card, and I've always baisically lived off of the "I only spend money I have" rule. The sad problem with that is no credit is just as bad as bad credit...

Other tips that people really should know, but usually dont-

Late payments to cell phones hurt your credit score more than you think- if your phone has ever been shut off, your score took a good hit, each time...

Closing accounts, even those paid in full, will hurt your score...

and the scariest one in my opinion- Don't ever be rude to bill colletors. If they have acess to your credit report (and they usually do), they can pull your score as long as you are in their campaign. I worked with a LOT of people who would pull people's reports a couple times a week if the debtor pissed them off in any way, because they knew it was f'ing their score over...

[saleeka]

Making payments on time counts more than how much.

Ohh so very true

[uberschall]

whoever originally said to buy something reasonably priced and pay it off bit by bit has the key. credit is all about demonstrating ability to make payments on stuff (yes, saleeka, it's uber-backwards)...not just pay your card off every month.

there's no sense checking your credit score now. if this is your first cc, you have no credit. i've had a credit card for two years, have taken and paid off several loans, and even with my other payments...i still don't have sufficient credit to get a "good" rate on a car, let alone a house.

the best thing to do is set a monthly limit and stick to it. for a while, i only used my card for gas....which for most people is a solid, predictable monthly expenditure.

don't go nuts, pay it off, and close it. credit isn't really about good things, it's about bad things. instead of looking at it from a "how will this improve my credit" perspective, you just need to look at it from a "how could this negatively affect my credit" standpoint.

[Toyoca]

k so basically just pay off whatever amount they say exactly when they want it right?

cause i was just going to pay off everything @ the same time. but apparently thats not a good idea (from whats been posted). k so i hooked it up to my debit card so whenever it says on the website "payment due: " ill just click pay now and be done with it. no more than what it says and no less?

This post has been edited by Toyoca: Oct 4, 2006 - 5:27 PM

[quicknstyle]

dont just pay it off, but then again dont just pay the minimum amount... because more than likely, your interest rate is crazy high, so you would probably be paying about 25% of your payment to interest alone... only use your card for things you need for emergencies... keeps you from splurging money you dont have.... and yes, paying your card off everytime you use it doesnt help much, or atleast as much as paying the minimum on time everymonth... but then if you do that, you pay a crap load of your money to interest, i would reccomend doubling your payments, and get it paid off early, that would be the most effecient way.... and yes, inquiries do hurt your score, not by a lot, but it does... credit is about how responsible you appear to be... when you have too many inquiries, people think you are just trying to borrow and borrow and borrow, which can lead to risk... thats why now, for major purchases like houses and cars... anytime you have a credit inquiry within a 2 week time period, it only counts as 1 inquiry, so that when you shop 10 banks for a better approval, your not jacked with assloads of inquiries... one might have excellent credit, but if he/she has too many inquiries, your score will be jacked...i sell cars for a living and ive seen plenty of people with good overall credit but their inquiries drop them to like a 480....

[Toyoca]

i dont believe i have interest but im not sure lol. i got amex blue for students

This post has been edited by Toyoca: Oct 5, 2006 - 11:56 AM

[BlackCelicaGT94]

My reccomendation is pay more than the minimum due but not all of it but not anything less than the minimum.

[bufferdan]

Pay it off in full everytime its due...dont be paying interest charges to "up" your credit score...thats a dumb way to do things. All i have had was a few credit cards and a cell phone...those alone and paying them in full on time is what built my credit up. Here is what it looks like now

[Ale_lock]

i dont believe i have interest but im not sure lol. i got amex blue for students

There's always interest, you'll just have features that other people would normally pay a small fee for or such.
It's like my student checking account, I don't pay any upkeep fees for 5 years which would normally be waived if I have direct deposit, after 5 years it'll switch to a normal checking account which will deduct 3.95 monthly unless I have direct deposit then it continues to be free.

[bufferdan]

btw....amex blue card is nice. Its my favorite! Mine is about worn out from blingin it so much. ha

[quicknstyle]

Pay it off in full everytime its due...dont be paying interest charges to "up" your credit score...thats a dumb way to do things. All i have had was a few credit cards and a cell phone...those alone and paying them in full on time is what built my credit up. Here is what it looks like now

cell phones dont count positively towards your credit... any type of bill like utility phone or cable bills dont count positively towards your credit unless you are more than 30 days overdue... then they only count negatively... and paying things in full do help your credit, but not by much, so it could a very long process...

[JonCars17]

I don't have any credit, but I just got a credit card a few (may) months ago and I have another for college one month ago. I'm not gonna get anymore. THe I use all the time has a 500 dollars limit which was just increased because I paid all of my bills on time without going over. I buy gas with it. The other has a 1,000 dollar limit and I have to use it atleast once a year without being taxed.

I'm thinking of buying me a cheap laptop for school for under 1,000 using the other card to pay for it monthly. Even thou I technically could buy it in full right now -_-.

This post has been edited by JonCars17: Oct 6, 2006 - 2:05 PM

[bufferdan]

[/quote]
cell phones dont count positively towards your credit... any type of bill like utility phone or cable bills dont count positively towards your credit unless you are more than 30 days overdue... then they only count negatively... and paying things in full do help your credit, but not by much, so it could a very long process...
[/quote]

Care to explain how im on the high end of the credit score scale then? I have NEVER had a loan on anything, cept for the house i just bought, my credit score has been that high for years though. All i have had is a few credit cards and a cell phone. I have never had a late payment and always paid in full. Ive only had these things since i was 18 and now im almost 24.... i guess 6yrs did it huh? Most older folks dont even have credit scores that high...must be because they use the "I should get a loan and not pay my bills in full" technique that they think raises their credit.. All that does is "backlog" you... keeping balances on credit cards is a bad thing to start doing. Say you have 1000$ bill...you pay your 150$ you need to on that bill....well next month you have another 1000$ bill + your 850$ from before + interest....ohh ohh. It will just escalate from there and then its very hard to pay it off. You just cant spend more than you have... if you do then your gonna end up getting screwed most likely. The way i use credit cards is, i can buy whatever it may be on my credit card ONLY if i could buy it with cash i have in the bank also. I pretty much just use the credit card as a easy means of purchasing instead of carrying cash and going to the bank alot.

http://www.myfico.com/CreditEducation/ImproveYourScore.aspx

This post has been edited by bufferdan: Oct 6, 2006 - 2:42 PM

[confucious]

BUT as far as BUILDING credit, why buy a new thing on it EACH month and pay it off completely and follow this cycle: buy something, pay it, buy something, pay it, buy something pay it??? I don't think you want to be getting a youngster in this pattern.

Why not just buy something, pay it slowly and it will be reported on your credit each month? I'm guessing he doesn't plan on buying a house in a few months. If you just slowly pay it off, you'll be in awesome shape by the time you are my age.

My credit score is high too and I've been doing that since I was 16.

As far as cell phones/other bills go, it all depends on the company. Some report it, some do not.

[My2Celi]

Thats exactly what im doing. I buy stuff with my credit card and i pay it in full . So far my credit is looking pretty good. I always pay my bills on time. Sounds like your sucessful already bufferdan, it doesnt seem like ima be gettin a house when im 24...

This post has been edited by My2Celi: Oct 6, 2006 - 3:42 PM

[BlackCelicaGT94]

So I have a credit question onw

My parents have gotten credit cards then they make me a co-card holder. If theyre not paying the bill does that make my credit score go down? lol im not sure if they pay the bills or not cuz its not my account but im curious if having my name on the account goes towards my score.

Thanks

[saleeka]

/\ yes your score is affected, good or bad... As a co-holder on an account that goes sour, the issuers expect you to step in if the primary party dosen't pay. When legal action takes place on cards with multiple parties, ANYONE who is on that account can be held accountable for 100% of the balance due.

This post has been edited by saleeka: Oct 6, 2006 - 5:45 PM

[BlackCelicaGT94]

Yeah i was a lil pissed to find out when Express denied my application cuz I already had a card and my mom had put one in my name but not told me!!!!!!! but she wont give it to me - wtf

[saleeka]

I dont know about you, but I would be FURIOUS if I found out my parents were forging my signature on any credit application, regardless of their intention...

[BlackCelicaGT94]

I dont think its forging. I think they call and say "we'd like to add our daughter on to the account" and then they send the card and i never check the mail so they keep it. I dont know how many they have in my name but i get declined for credit cards all the time cuz of my history!

im -100 bucks atleast each pay period. All that is changing in November tho so I can get my g35 :-)

[bufferdan]

BUT as far as BUILDING credit, why buy a new thing on it EACH month and pay it off completely and follow this cycle: buy something, pay it, buy something, pay it, buy something pay it??? I don't think you want to be getting a youngster in this pattern.

Why not just buy something, pay it slowly and it will be reported on your credit each month? I'm guessing he doesn't plan on buying a house in a few months. If you just slowly pay it off, you'll be in awesome shape by the time you are my age.

INTEREST??? Why would you want to give free money to them if you dont have to? You wouldnt have to give away free money (interest) if you use proper spending methods like not charging more than you can afford and paying the amount off in full. Credit card companies dont like people that do it the right way of course....they aint making anything off me, in fact they paid me 180$ last year just for using the card Maybe thats why they keep bumping my limit up though...to try to get me to spend more than i have so i have a balance and get those nice interest charges.

Try this out...
http://www.bankrate.com/brm/calc/MinPayment.asp

This post has been edited by bufferdan: Oct 6, 2006 - 8:01 PM

[Ale_lock]

Nice link, gimmeh more info!

[confucious]

INTEREST??? Why would you want to give free money to them if you dont have to? You wouldnt have to give away free money (interest) if you use proper spending methods like not charging more than you can afford and paying the amount off in full. Credit card companies dont like people that do it the right way of course....they aint making anything off me, in fact they paid me 180$ last year just for using the card Maybe thats why they keep bumping my limit up though...to try to get me to spend more than i have so i have a balance and get those nice interest charges.

Try this out...
http://www.bankrate.com/brm/calc/MinPayment.asp

effort vs. interest.