Chosen by Asker

Some people here are suggesting you avoid credit cards. As you now know, credit cards aren't an inherently bad. It will be very difficult for you to establish a history as a reliable borrower. You will not be able to rent or buy a car, house, an apartment, or even get the best insurance rates with no credit history unless you have a proven track record paying off a credit card as agreed. It doesn't matter you're the most fiscally responsible consumer ever, if you don't have a credit history, banks will treat you like an 18 year-old who's new to the game. The KEY to using a credit card and establishing a high credit score is to *always* pay off your balances on time, don't max out credit lines, and ideally, pay the full balance each month. To answer your question: Since your debt to credit ratio is so high, you'll have to start gradually to prove to creditors that you're a trustworthy borrower. What you should do is open up a bank account and apply for what's called a "secured credit card." You'll have to deposit money in your account, but it works just like a credit card. This way, you can begin to build good credit and can soon apply for other types of credit when the time comes. See the source below for more info. Don't worry about how a card "looks" (Sears card vs. credit card), just make sure the card does not have an annual fee, and be absolutely sure to make payments on time. Sometimes you have to start small, but it will pay off as you see your credit improve and mortgage lenders begin to view you as a more favorable borrower. You can build a fabulous credit history with a card that has a limit of only a couple thousand dollars. The most important factor in your credit score (35% of the score) is payment history, so even if you just use it to buy a few things a month, paying in full with do wonders to improve your standing. Good luck.

Source(s)

I work in the institutionally credit industry. Here's info on secured cards: www ...

by Credit Quant

3 weeks ago

Asker's Rating: 

When I was 18 I got a gas card. Paid in full each month, because I didn't want to pay interest. When I was 19, I had such good credit - I got a visa with a 7,000 limit. I used it for food only - and again, paid in full each month. I didn't want to pay interest. When I bought a house, I had the mortgage person tell me he had never seen such a high score. He added that he was comparing me even to the old people. Looks like paying in full and never paying interest is a good way to get top scores. Use credit cards - don't let them use you. Forget a credit card to buy that fridge. If you don't plan to pay in full when you get the bill, you will only be ruining your credit even further. Carrying balances not only destroys your credit, it can destroy your life. /

by Judy- 3 weeks ago

credit ... has general information on "building credit."

by jlf- 3 weeks ago

We haven't had a credit card account in over 20 years. We were able to buy a second home and finance a car with zero problems. The wisest way to build good credit? Follow your dad's and my lead. With credit, you are spending money to DON'T have. With a savings account, you can spend money you DO have. !!!The BEST thing you can do is to build a respectable savings account balance!!! Forget about getting credit cards. They are like a cancer that will destroy your financial health. CC issuers know human nature. CC issuers capitalize on those human shortcomings. Humans are greedy, impatient, careless and forgetful. Humans want things they don't need. Humans want things NOW - can't wait. Humans spend money on things they can't afford. They forget to pay their bills or fail to track their balances. CC issuers have people thinking that to have good credit, you need credit cards. But that will get you into deep financial trouble. CC issuers manipulate customers credit profiles in the following ways to justify interest rate increases and cause other penalty fees to occur. I've read these complaints from many other posters to YA who describe their problems with their banks. Too many credit cards? You are a risk - raise you interest rate and/or lower your credit limit. Too few credit cards? You are a risk - raise your interest rate because credit profile is too brief. Credit cards with high balances? You are a risk - raise your interest rate AND possibly your minimum payment so that you fall behind. Then they can charge you late fees. Credit cards with low balances and high limits? You aren't using enough of your credit - lower your credit limit ceiling so that your debt-credit balances are above the 30% level - raise your interest rate. Pay off your cards every month? Charge those who do an annual fee. Not using your credit cards? Close the account. That raises your debt-credit ratio to above the 30% level triggering higher interest rates. No credit cards or too few credit cards? You can't get the mortgage because you have no credit history. Credit cards with balances? You can't get the mortgage until you pay some of them off. Credit cards with zero balances? You can't get the loan because of the potential debt you could incur if you start using the cards. Wouldn't it be wonderful if everyone stopped using credit cards and saved their money to pay for things with CASH (other than a car or home). The FICO scoring system would collapse as there wouldn't be any way to measure one's credit profile. Again, my recommendation is to start saving money now, $100 per month if you can. In five years, you'll probably have enough to close on a home of your own. But understand, that your income minus your debts must leave enough money to make the mortgage payments. That's what the lender will be looking at besides your credit profile.

by Dan B- 3 weeks ago

bad advice! my sister did the same thing paid cash then when she needed credit she had nothing in her credit report to show how good she pays?? you have to have credit to get credit!! best thing you can do is pay your unpaid medical bills and get a small visa or master card. make shure you pay the minimun or more every month on time. that should do it??

by Robert W- 3 weeks ago

Do you have bad credit, or no credit? It sounds like bad credit, but I just want to make sure. Here's a really good article on repairing bad credit: www ... It also tells you how to get a free credit report, and explains why your score might be bad. Good luck!

by MissyMiss- 3 weeks ago

You are very young still. Stop listening to all the insanely crappy garbage you were told, credit is needed for everything. Things are tight, and they will get tighter.

by Apollo- 3 weeks ago

Сredit repair workеd fine to fix my credit. They disputed and removed lots of bad items from my credit report. I used this service - buildcredit.ifastnet.com

by Brad- 3 weeks ago