NT, lets talk credit. . .

[eff ecks]

NT, I am looking to get my first credit card. My friend tells me that because im young, i will only be able to get a Capital One card with a $500 limit.Basically im just gathering advice to make a wise decision as far as what to do(before and after thecard is obtained).

 

[diego]

Capital One is not a bad card to start with.
They are pretty fair for the most part.

Swipe it wisely.

 

[the north west]

don't get a credit card

children can't handle credit cards

 

[pacmagic2002]

Get a credit card.......but only use it for stuff you already have money for........or for stuff you need a few days before you get paid and PAY IT OFF as soonas you get the money.

This is the best practice to build your credit early.

I messed up with capitol one as my first credit card......went all the way up on my balance but made my payments.

I was young and was buying shoes and clothes like it was already my money.......Started with a $400 balance.......now i owe them $1009.

I just got a secured credit card soo i could buld my credit back up.....believe me, if i knew what i know now about credit and how it effects you, i would havedone things ALLOT differently.

 

[solematic j21]

Capital one is aight. I have it but im about to bring down the limit.

 

[rjpadin]

Originally Posted by pacmagic2002

Get a credit card.......but only use it for stuff you already have money for........or for stuff you need a few days before you get paid and PAY IT OFF as soon as you get the money.

This is the best practice to build your credit early.

I messed up with capitol one as my first credit card......went all the way up on my balance but made my payments.

I was young and was buying shoes and clothes like it was already my money.......Started with a $400 balance.......now i owe them $1009.

I just got a secured credit card soo i could buld my credit back up.....believe me, if i knew what i know now about credit and how it effects you, i would have done things ALLOT differently.

I agree with you for the most part. The problem is unfortunately that creditors also want to see that not only can you pay off your balance but that you canalso maintain a balance over time. Being responsible is the key to a credit card. Just use your head, if you can't afford something try lay away instead ofa credit card. Also make sure to run a credit report once a year with your credit score and right before you make any large purchase such as a car or a home.

 

[bxbadboy90]

Besides a credit card what are other ways for an 18 year old to build credit?

 

[soltheman]

Originally Posted by bxbadboy90

Besides a credit card what are other ways for an 18 year old to build credit?

Car or a house.

 

[bby fresh]

Capital One is okay. Do you already have a bank account? I have Bank of America, and I use a Visa platinum plus card issued by them.. I use my checking accountto pay for my credit card bill, so I don't have to mail checks. Try to get a credit card when there's a promotion going on, like 0% APR for the firstyear or some kind of incentive for signing up. Other than that, just always remember to pay your bill in FULL each billing cycle.

 

[solematic j21]

Catching a fee will make it harder for you.

 

[mateen cleaves]

i need to get a credit crd but i dont know what kind, never had a credit card before and have no credit. checked out capital one and its confusing

 

[jthagreat]

my first card was from walmart... 300 limit. i would go that route cause folks (not me at least) dont spend much loot there.

 

[infamousod]

one way to go is to get a store credit card, like Macy's or something, basically use it to get that discount, pay it off and stick it in a drawer.

it'll build credit history having it for a long time and one factor on your credit score is how much %-wise of your credit you have tied up. So if you havea card that's completely paid off and sitting there idle it boosts your score and shows you can handle having a credit line.

 

[mateen cleaves]

Originally Posted by infamousod

one way to go is to get a store credit card, like Macy's or something, basically use it to get that discount, pay it off and stick it in a drawer.

it'll build credit history having it for a long time and one factor on your credit score is how much %-wise of your credit you have tied up. So if you have a card that's completely paid off and sitting there idle it boosts your score and shows you can handle having a credit line.

you can get those cards without credit?

 

[eff ecks]

Originally Posted by infamousod

one way to go is to get a store credit card, like Macy's or something, basically use it to get that discount, pay it off and stick it in a drawer.

it'll build credit history having it for a long time and one factor on your credit score is how much %-wise of your credit you have tied up. So if you have a card that's completely paid off and sitting there idle it boosts your score and shows you can handle having a credit line.

I was thinking of doing this for a Macbook. Would it take longer to build credit with a store card as oppose to a normal credit card?

 

[infamousod]

I wouldn't say it hurts or helps you more than a regular credit card. you can definitely get store cards without credit, they are falling all overthemselves to open as many cards as possible.



Key factors of your score
Just what goes into the score? Everything in your credit report, with different kinds of information carrying differing weights, says Fair Isaac Corp. PublicAffairs Manager Craig Watts. The FICO-scoring model looks at more than 20 factors in five categories. (The VantageScore relies on slightly different factors.The Bankrate feature "New Vantage credit score now online" compares the FICO score with VantageScore. )

1. How you pay your bills (35 percent of the score)
The most important factor is how you've paid your bills in the past, placing the most emphasis on recent activity. Paying all your bills on time is good.Paying them late on a consistent basis is bad. Having accounts that were sent to collections is worse. Declaring bankruptcy is worst.

2. Amount of money you owe and the amount of available credit (30 percent)
The second most important area is your outstanding debt -- how much money you owe on credit cards, car loans, mortgages, home equity lines, etc. Alsoconsidered is the total amount of credit you have available. If you have 10 credit cards that each have $10,000 credit limits, that's $100,000 of availablecredit. Statistically, people who have a lot of credit available tend to use it, which makes them a less attractive credit risk.

"Carrying a lot of debt doesn't necessarily mean you'll have a lower score," Watts says. "It doesn't hurt as much as carrying closeto the maximum. People who consistently max out their balances are perceived as riskier. People who never use their credit don't have a track history.People with the highest scores use credit sparingly and keep their balances low."

3. Length of credit history (15 percent)
The third factor is the length of your credit history. The longer you've had credit -- particularly if it's with the same credit issuers -- the morepoints you get.

4. Mix of credit (10 percent)
The best scores will have a mix of both revolving credit, such as credit cards, and installment credit, such as mortgages and car loans. "Statistically,consumers with a richer variety of experiences are better credit risks," Watts says. "They know how to handle money."

5. New credit applications (10 percent)
The final category is your interest in new credit -- how many credit applications you're filling out. The model compensates for people who are rateshopping for the best mortgage or car loan rates. The only time shopping really hurts your score, Watts says, is when you have previous recent credit stumbles,such as late payments or bills sent to collections.

"Then, looking for new credit will be seen as an alarm because statistically, before people declare bankruptcy and default on everything, they look for alife preserver," Watts says. Also, if you have a very young credit file, an inquiry can count for more than if you've had credit for a long time.



What doesn't count in a score
The scoring model doesn't look at:
age
race
sex
job or length of employment at your job
income
education
marital status
whether you've been turned down for credit
length of time at your current address
whether you own a home or rent
information not contained in your credit report
A lender may consider all those factors when deciding whether to approve a loan application, but they aren't part of how a FICO score is calculated, Wattssays.





Credit scores are not perfect
The major drawback to credit scoring is that it relies on information in your credit report, which is quite likely to contain errors. That's why it'scritical that you check your credit reports annually, or at the very least three to six months before planning to buy a house or a car. That will give yousufficient time to correct any errors before a lender pulls your score.

Watts says that the need for accuracy in credit files is one reason why it's good for consumers to learn about credit scores.

"There's a hope that as consumers know about credit reports and scores, they'll do more to correct errors and provide more oversight," hesays. "If consumers can police the accuracy of their own reports, everybody gains."

Want to get an approximation of your score? Bankrate and FICO have teamed up to create the free FICO Score Estimator.


Source: http://www.bankrate.com/brm/news/credit-scoring/20031104a1.asp

 

[nikeflightposite]

Originally Posted by Eff Ecks

NT, I am looking to get my first credit card. My friend tells me that because im young, i will only be able to get a Capital One card with a $500 limit. Basically im just gathering advice to make a wise decision as far as what to do(before and after thecard is obtained).

F.Y.I. Cap 1 started me off with 300 and i haven't gotten it raised for 1.5 years

 

[infamousod]

actually getting a macbook with their credit would be good. its different from other credit. just make sure they give you a good rate.

 

[toast1985]

If you have to rely on a message board for advice for a Credit Card, I would advise against you not having one. Attend a few credit seminars, and talk to someprofessionals.

...Not saying NT is a poor source of info, there are a lot of intelligent folk on here, but I still would advise you talk to a few others in the physical form.

 

[josebronx]

cc companies must be racist or something because I got $300 limit my first time

 

[dacityslanga]

As a person who worked at a bank in 2007, my advice to you OP is to try your bank's credit card first. Most banks have student credit cards, that way youcan build your credit and since you already bank with them, your rate will be lower. Most banks even have promotions for students (ex. 0% interest for 6 or 12months). Capital One is ok, but I would advise not to get one from them.

Also to answer your 2nd question on obtaining credit, yes a car and a house is good, but lets be real, you dont have those. If you are in school, Student Loansare an excellent way to go, also getting a cell phone in your name is another way.



1100th post

 

[springfieldxd]

i got 10k on my first cc...

went !%*@@% stupid...

 

[aec23]

try to get whatever credit card you can get, hopefully with no annual fee. my first card limit was only 150. then after six months it got bumped to 900. i onlyuse my card when i know i have money in the bank to back it up. my dad said if you are able to build 4 lines of credit within 2 years, you are off to a greatstart, assuming you are not maxing them out monthly and paying them off each month on time. ive only had credit history for about 1.5 years and have 4 cards, idont see myself going for more cards anytime soon. but definitely get one and be wise and build your credit so you can buy a house and car in the future.