[BillSPrestonEsq]

Your wife had a credit history from loans.

I paid my undergrad education off in cash. Thus credit cards were the only starting point. If a person has NO CREDIT HISTORY, then they do not have lines of credit open through student loans or cars.

I started at 24 with literally no credit history, as in blank slate. Credit cards were a way to start. You pick no fee cards, and treat them as if they were cash. I started using them to buy groceries on a budget. Just groceries.

[tlj009]

You pick no fee cards, and treat them as if they were cash

And not only no fee cards but pay attention to anything that is added to "help" you. When I activated my one credit card, I spent 45 minutes telling the nice lady from India that I don't want payment protection. They actually charge $.01 for every dollar that you spend for this stupid payment protection thing. And it never goes away. Not only that but I think that they are trained to aggravate you until you give in.

[Gustin]

Originally Posted by BillSPrestonEsq

Your wife had a credit history from loans.

I paid my undergrad education off in cash. Thus credit cards were the only starting point. If a person has NO CREDIT HISTORY, then they do not have lines of credit open through student loans or cars.

I started at 24 with literally no credit history, as in blank slate. Credit cards were a way to start. You pick no fee cards, and treat them as if they were cash. I started using them to buy groceries on a budget. Just groceries.

+1 I was given my grandfathers old car, my education was/is paid with scholarships (and the remainder in cash). There is no other way for me to build credit than through a credit score than with a credit score.


I couldn't get an apartment a couple months ago because I had new/no credit. They didn't give a damn about my employment status, past history of paying rent on time etc. I even offered to pay a number of months in advanced, but they wouldn't go for it because my score didn't match up.

Originally Posted by tlj009

And not only no fee cards but pay attention to anything that is added to "help" you. When I activated my one credit card, I spent 45 minutes telling the nice lady from India that I don't want payment protection. They actually charge $.01 for every dollar that you spend for this stupid payment protection thing. And it never goes away. Not only that but I think that they are trained to aggravate you until you give in.

When I asked the guy I was talking to what these "wonderful" offers would cost he kept saying "These offers are absolutely free to you (2 second pause)... for the first 30 days."

[Epaphras]

Originally Posted by Gustin

I couldn't get an apartment a couple months ago because I had new/no credit. They didn't give a damn about my employment status, past history of paying rent on time etc. I even offered to pay a number of months in advanced, but they wouldn't go for it because my score didn't match up.

Then that is an absolute shame on their part. It is incompetent for a landlord to reject a potential tenant willing to pay months in advance and with a proven income and reliable history. Incompetence breeds incompetence, so in my opinion you dodged a bullet with this. Think about how they'll react to maintenance or other issues if they are so formulaic/unthinking when it comes to the most important aspect of their business: screening tenants.

[Gustin]

Originally Posted by Epaphras

Then that is an absolute shame on their part. It is incompetent for a landlord to reject a potential tenant willing to pay months in advance and with a proven income and reliable history. Incompetence breeds incompetence, so in my opinion you dodged a bullet with this. Think about how they'll react to maintenance or other issues if they are so formulaic/unthinking when it comes to the most important aspect of their business: screening tenants.

Absolutely. Still didn't help me get a place to live though..

[Epaphras]

Originally Posted by Gustin

Absolutely. Still didn't help me get a place to live though..

But you found a place eventually, right? Unless you are currently homeless. If you go around shopping for an apartment with six months' deposit and a solid rental history and a secure job, someone will rent to you, with or without a credit history based on credit cards. That was my only point with that.

[BillSPrestonEsq]

Originally Posted by Epaphras

But you found a place eventually, right? Unless you are currently homeless. If you go around shopping for an apartment with six months' deposit and a solid rental history and a secure job, someone will rent to you, with or without a credit history based on credit cards. That was my only point with that.

Yes, and usually you are down to the people who don't care about credit score, which means some really, really funky stuff. In short, you are limited to real funkiness. (it took me months to find a place)

You have a credit history based on credit. Scores are scores whether they come from student loans or credit cards, and credit cards are no worse than student loans. Loans are loans.

[TunerSteve]

I agree totally on using credit very sparingly if at all.

When I first began to establish a credit history I purchased a TV, on a 6 month payment plan. I already had enough to pay cash, but wanted to set up a history. I put the cash aside for making the payments, and in the end spent about $45 extra in interest, but my history was established, and have never had an issue again.\

The credit card companies are under heavy pressure these days, and have had the opportunity to change your agreement on a monthly basis. I used to have a card that I only used for internet access. I paid it each month in full, and never used that card for anything else. Last year they began to charge me fifty cents a month for just having the card. I didn't close the account (that would hurt my credit score) I simply moved that billing to a different card that doesn't treat their customers that way.

I know of people that pay their payments on time, but have had thier rates go from 8%, two months later to 16% and one month later it went to 30%. These are people that have never been late on a payment! Use caution, and educate yourself.

[Gustin]

Originally Posted by BillSPrestonEsq

Yes, and usually you are down to the people who don't care about credit score, which means some really, really funky stuff. In short, you are limited to real funkiness. (it took me months to find a place)

Yep. I'm just renting from a family. Luckily they're very nice and a great landlords, but there was a very large likelihood of that not being the case.


Most of the places here wouldn't even let me have a cosigner. The application process here involved filling out the forms and then they run your credit score.. if you don't qualify, there's usually no option for resolution. Their systems (set up by parent companies with hundreds of properties around the nation) won't even let them continue the application process.

It's unfortunate, but that's the way it works in most places. And for me the only way to build credit is a credit card. It's a necessary evil. But as long as you are disciplined you will be alright.

[athanatos]

Wow! Quite a few responses! Thanks for the input, guys (and gals)!

Originally Posted by luvinjesus

You need to have loans in your name and show that you have a history of paying them on time. Seriously. I am building my credit by paying my student loans on time.

Originally Posted by luvinjesus

Well I know from experience, having never had a credit card and a relatively high credit score, that paying back my student loans and car loans on time does in fact build your credit score.

Originally Posted by Gustin

I went through the same thing for a long time... I only just (as of today as a matter of fact) have been able to get a credit card. If you're a student, try applying for student cards as they're usually a little more forgiving about credit history. With the economy picking back up, they're also getting a little more relaxed.

I just graduated last May with absolutely no debt, no loans, ... and no credit history. I have left the marketing segment of notoriously foolish credit-card spenders. ...I'm 23 and outta college.

Also try applying through your bank (especially if you've been with them for a while).

What if I don't have a big purchase yet?

Also another option is to get a secured credit card (you pay a specific amount up front and that becomes your credit limit). Use that for a few months then try reapplying when the credit's been built up.

Originally Posted by BillSPrestonEsq

Capital one gave me one with no credit. My credit limit was a joke, but it got raised in about 3 months.

Originally Posted by Skeeter

I had/have the same issue. I currently have a secured funds credit card from Capital One and I'm using it to build up my credit history. Seems to be working, I guess.

Originally Posted by Pre-Ex-Girlfriend

A secured funds credit card is a good option because the spending limit is usually pretty low, and you don't need a credit rating to get one. If you make all your payments on time, you should be able to establish good credit in about six months.

This recommendation popped up several times. I am unfamiliar. I'ma look it up, but anyone wanna clarify?

My credit history started with me taking out a loan with a co-signer (my mom). She had the money to buy me a car, but took out a loan anyway just so that I could have credit. She paid the loan off right away, and I established good credit. Not the easiest way to get credit, since you have to have the money already, but it sure works.

My parents tried to do that with my brother. My brother paid it off too soon, so it reflected negatively, IIRC.

Originally Posted by beanbag

as soon as I turned 18, I applied for a target store card. I used it instead of cash, but after each purchase I would head straight over to the customer service counter and pay the card off. after about 6 months of doing that, they offered me a target visa.

it's worth a shot.

I might try this. Not a bad idea... but I am worried I might have too many inquiries; which IIRC actually can look bad. Maybe not, because then I would have a credit history. Lol.

Originally Posted by Epaphras

Credit cards are dangerous, be very careful.

My being overly cautious got me in this position.

If you are worried about building your credit score by getting a few credit lines, don't worry! When you apply for a mortgage or something like that someday, if you go to a good lender who actually looks at more than your pulse and your ability to sign your name, they'll look back at your pay stubs (proof of income), rent and utility payment history, etc. to determine your rate -- based not on some algorithm (which is all a credit score is -- it's a proprietary algorithm that no one but the owners really know how it's computed) but on your actual credit risk. That's the old-fashioned face-to-face way, and one good by-product of this meltdown is that they are now going back to that. Your local bank (locally-owned) or credit union (member-owned) is much more likely to have a competent loan officer than a big bank.

I'll remember that. I have an account at a big bank, a regional bank, and a credit union.

But what if I don't have a big purchase (yet)?

Basically, there are better (less-dangerous) ways to build a credit history that don't involve debt. Pay your rent on-time, keep a steady income, pay your utilities, cable, etc. on time and in full, etc. Don't fall for the myth that you need a credit card to build a credit history.

Right now, I live with my parents, pay my parents for the utilities they charge me, and such. I have no credit, and wouldn't unless I move out.

Which I might do soon.

[beanbag]

Originally Posted by athanatos

I might try this. Not a bad idea... but I am worried I might have too many inquiries; which IIRC actually can look bad. Maybe not, because then I would have a credit history. Lol.

it depends on the type of inquiry. some are negative, some are not. I couldn't tell you off the top of my head which are and aren't, but know that there is a difference.

[Pre-Ex-Girlfriend]

A secured funds card is pretty straight forward. You send the credit card company money, in our case it was $300, and you get a card with that amount of money as your limit. Since they already have your money, then they don't really care as much if you never pay them back.


Also, about the Target card, I'm not sure if this is still the case, but it used to be that you have to already have a major credit card in order to get one. Not only that, but you have to have one for at least six months. We tried to apply for a Sears card (for the discount, then we were going to pay it off and cancel it), but we hadn't had our credit card long enough.

[athanatos]

Originally Posted by Pre-Ex-Girlfriend

A secured funds card is pretty straight forward. You send the credit card company money, in our case it was $300, and you get a card with that amount of money as your limit. Since they already have your money, then they don't really care as much if you never pay them back.


Also, about the Target card, I'm not sure if this is still the case, but it used to be that you have to already have a major credit card in order to get one. Not only that, but you have to have one for at least six months. We tried to apply for a Sears card (for the discount, then we were going to pay it off and cancel it), but we hadn't had our credit card long enough.

Okay, so the way you and Wikipedia portray it...........

It's in some respect like a reloadable debit card. Only it acquires a history with the company, allowing credit essentially (or in practice) be your balance. Well, until your credit increases.

Blech! That honestly sounds lame, given that they cost money.

[Nate]

My wife and I got in the same situation trying to be too careful, avoiding debt / credit whenever possible, paying only cash, trying to be responsible stewards of our resources.

The long and short of our experience is that it is never too early to get a credit card and it is absolutely essential to your financial life that you do so sooner rather than later.

When my keyboard busted, we went and tried to get a loan [under $2,000] to pay for a new one we wanted to buy. We got denied due to insufficient history, even though she had a Victoria's Secret store credit card, I had a student loan, she had a small car loan that she used to pay for her first car, and we had no late payments, no credit faults, and scores in the upper 700s.

We ended up just writing a check for the keyboard, but we went that week to our bank [CapitalOne] to get credit cards so that we could begin building an actual history.

Still, after about a year of having the cards, we went just last month [back to CapitalOne, same place that gave us the credit card!] to apply for a small auto loan [just $3,000] and were denied again due to insufficient history, even though we had the year of credit card use [and we used it on EVERYTHING, and paid the balance back at the end of each month] AND a mortgage.

We finally went to a smaller, local bank at which we have an interest-bearing account and convinced the loan officer to convince the underwriter to fund the loan despite our history.

Go to a bank you use that you have a lengthy history with and get a credit card with them at whatever interest rate / credit limit they will offer. Negotiate until you get one. Then use it.

You don't need a big purchase to obtain a line of credit from your bank in the form of a credit card. Just put day-to-day things on it and then pay it back at the end of each month.

And don't accept no for an answer. People [especially in smaller lenders] are willing to negotiate and let you prove your reliability. Bank cards reflect better than store cards, too.

[BillSPrestonEsq]

too many inquiries is bad. However, it is bad in the sense it shows you are having trouble getting credit.

When I got my car financed, (after a credit card, mind you) the dealership's finance department sent it out to 19+ lenders before one took us, meaning I had a heck of a lot of inquiries that month. I was advised that after a few months, those just go away, especially if you don't do anything stupid. I did not need to get a secured card, but that may have changed, but I believe my initial credit limit was something like $50.