Chosen by Asker

Your mother is wrong. It is a urban legend that carrying balances and only making partial payments increases your score. Credit cards don't report how much you paid, just if it was on time or not. The best way to build your credit is to use the card and pay it off in full every month. You'll save the interest, stay out of debt, and build a good history.

by bdancer222

4 months ago

Asker's Rating: 

Well what I did, was I almost, but not quite maxed out my credit card, and always paid early and just a little bit more than the minimum payment, and I have great credit

by Chels- 4 months ago

Individual creditors (the credit card on its way, in your case) only report certain things to the the credit reporting agency... your credit limit, current balance, high balance in the last xxx months, and whether or not you pay on time. I think what your mother is referring to is the fact that some credit card issuers don't care much for folks that pay their balance in full each month. They make the most money from card holders that have a high balance (and high finance charge) and only pay the minimum each month. In some of these cases the card issuer will simply not renew your card when it expires. This does NOT, however, change what they report to the credit bureaus. The longer you've had a credit account in good standing, the more it will help your credit score. Having the one active credit card in good standing will help you somewhat, but it's really tough (especially in the current credit climate) for a person just starting out, as you are, to find someone willing to extend you credit for a car loan. Talk directly with the finance department of various dealerships. Some have "first-time buyer" programs and will cut you a little slack. Failing that, you may have to look at the used "we tote the note" type car lots. You'll end up overpaying for what you get, but if they report your payments to the credit bureaus (ASK!! And make sure they give it in writing), it will help out a lot when it comes time for your next car.

by Maldavi- 4 months ago

no, as long as you are making payments it is reported. Use it to pay your cell phone bill every month or car insurance, something you are going to pay anyway, so you are sort of funneling the money thru that card but not actually spending MORE money. Carrying a balance over about 30% is not good. you should have a good amt of credit available to you but not being used. so that way it doesnt look like this person spends every nickel available to her, she must be broke..I made the mistake when i was trying to raise my credit score of actually paying off some cards and closing them and was told it would have been better to leave them open with low balances. bummer.. i blew alot of money paying them off so i could close them.

by Elizabeth S- 4 months ago

The fastest way to get a credit score is to pay your bills on time and before they are due . But since you just started out it may take awhile before it even show a score as well bare in mind that you must have an income to qualify for an auto loan . Best way is pay cash for the car and get something that will get you from point A to point B . My accountant once said to me its better to have money in bank then a receipt , it made perfect sense to me . The banks want you to be married to them and have debts and always be in debts . So learn right away to stay out of debts and pay cash , you will get bigger bang for your buck .

by Gentleman- 4 months ago

There is so much to learn about money for a young person. Some people go an entire lifetime and never learn. It is really quite simple once you have the bad experiences behind you. Credit is not your friend until you don’t need it. When you are most in need of credit is when you should not use it. Credit card companies are like drug dealers only interested in getting you hooked on credit. If you are one day late they raise your rate like crazy. All your checking for a cheap rate is out the window because you forgot to mail the check or the mail was late. At your age, the only charges that should go on your credit card are charges you can pay in full at the end of the month so you will be using the Credit card Company’s money instead of yours at no interest. Get a reliable used car and take great care if it. Ask your parents if any of their friends are getting a new car and you can get their old car cheep. Save your money and pay cash. Ask around at work if any of the bosses is selling a good used car. Once you get your old used car paid for, put the cash in the bank that your payment would have been in the bank and see how hard it is to come up with the payment. Remember, if you miss 2 payments, they are coming to get your car and your credit is toast. Until you work out your car problem, take a bus or better yet, walk. Your Whole life is ahead of you and you need to start out on the right foot. One last thing is never loan anyone money, especially family, you can give it to them but never loan it. They never are going to pay you back and they won’t ever talk to you again. People hate anyone they owe money to.

by Leon T- 4 months ago

pay on time every time and keep your available credit at 70% or more....make sure you pay more than the minimum and ask for an increase every six months

by Jubreal C- 4 months ago

Read This : - " How to Clean Up and Improve Your Credit Score - 7 of the Best Ways to Improve Your Credit Score " Here : - www ... +

by ADAM S- 4 months ago

No, don't charge a bunch of things. Don't charge more than you could if you wanted to pay off in full. Carry a small balance, but make sure your payments reach them on or before the due date. Pay a little more than the minimum balance, even $5.00 is great. It takes time, but you'll get a nice credit score.

by Classy Granny- 4 months ago