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Establishing Credit

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Establishing Credit
Paying your bills when they are due helps to establish your credit. Learn to budget your income to keep ahead of your financial commitments. This is a guide about establishing credit.
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Ask a QuestionHere are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community or ask a new question.

By 0 found this helpful
August 6, 2014

How do I get credit to make purchases?

By mariahbowles

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August 21, 20140 found this helpful
Best Answer

One of the best ways to establish a credit rating is to get a credit card, and pay it off IN FULL every month. Another way to establish a good credit rating is to save up a down payment for something you need, such as a car. Then when you purchase the car, after getting the loan from the dealer or the bank, then you must absolutely make all the payments on time and for the full amount.

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Do not go to payday loan places, or borrow from places who will lend you money regardless of your income, your net worth, your credit rating. Those sorts of places prey on people.

Most banks or dealerships will lend you money on a car, if you have a good job and a down payment, even if it is your first loan, because the car has value and they can take it back. However, even with this, you usually have to have a co-signer.

If you wish to get credit so that you can purchase a bunch of stuff that you can't really afford, or go on expensive vacations, or buy a bunch of stuff like expensive purses and shoes, or blow it on expensive meals and booze, you are better off not getting credit.

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August 22, 20140 found this helpful
Best Answer

If you have no past credit (of any kind) it is sometimes difficult to get a new credit card with a bank (with low interest rate) even if you have a job. They look at where you are living (buying, renting, school, parents) as well as how long you have been working (how many times have you changed jobs?) and other things.

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Most financial people say it is best to go to your bank and apply for a "credit" loan. That is - you put 100.00 in an account and then you ask for a "credit" loan of 90.00 against your saving of 100.00. Then you pay this off in monthly payment (whatever amount is set up) until it is paid off. Then try to add more money to your savings and borrow against it again. Do this for at least one year and you will be well on your way to getting a good credit card.

Try to always pay any bill (utilities, rent/mortgage, local stores, cable) on time as credit agencies know a lot about people and they check all of these for your payment history.

Usually a Walmart card (with money) does no good but there can be exceptions. If you acquire a credit card, try to always remain in the lower 25 to 50% of the top figure you have available.

Always pay more than the minimum due and give every purchase a lot of thought - even the 2.00 ones.

If you are trying to build credit then you should maybe make payments and not pay it off each month - at least for the first 6 months to a year.

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By 0 found this helpful
March 24, 2008

Can anyone help me find a good credit card to get? I make $202/month and need to build my credit so that I can start getting things that I need.

Audriana from Conroe, Texas

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March 24, 20080 found this helpful

I'm trying to establish credit also so I know what you're going through. If you get pre-qualified/pre-approved offers in the mail try one of those. Just be sure there's no annual percentage rate. Your balance will be small but if you pay it on time and in full they will raise it. I started with $500.00 dollars in November and in March they raised it to $750.00. Try not to use more than 50% of your credit line each month. I was told that's what they really look at. If you max out your cards every month they get the impression you are a bad risk. If you don't get the offers, try to get a secured credit card. It works like a savings account: you put a certain amount of money in(usually $500.00 to $1,000.00) and they withdraw from the account. If you don't overspend after about a year they will usually offer you a regular credit card. My bank told me they never heard of anyone being refused a secured card. But all banks don't offer secured cards so you may have to look around. Good luck!

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March 24, 20080 found this helpful

my sister was it the same position and i found this neat site that has all different offers and info on each one. it really helped her out with what she needed. http://www.unse  creditcards.org/

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By guest (Guest Post)
March 25, 20080 found this helpful

Try citibank or Discover Card. I like credit cards that reward you for using them. That way you make money off them.

You dont need a credit card to establish credit. You only need to buy something and make payments on it. Credit cards have the worst interest rates so you always want to pay them in full each month. Be sure to do that.

Best of luck always,

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March 25, 20080 found this helpful

Two things: first, you probably won't get a regular credit card with an income of $200/month. The usual minimum is about $15,000 per year, or about $1,250 a month. Second, you might be able to get a secured credit card through your local bank. You put $500 or so in an account, they give you the card and you buy $500 in credit purchases, and then make regular monthly payments to them. After a year of regular on-time payments, you'll have a credit rating.

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March 25, 20080 found this helpful

Unfortunately, I have to disagree with your thinking. A little bit of motherly advice--probably unsolicited advice. What do you need that is so important that you can't save for anyway? Needs and wants are two different things. You want to build debt to become debt worthy? Worded differently it sounds harsh but it is just another way of looking at things. I'm sorry, but I think you need to establish an income before you would even think to incur any debt. $202 a month is not very much money at all. And, having debt is not fun! And, if you really want credit, you should save money and put it in the bank like jantoo said. The bank can use that money as collateral and give you a credit card against it. You will pay $ to use your own money though.

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March 26, 20080 found this helpful

You're not going to be able to get the things you "need" (shelter, food, adequate clothing, access to transportation) making $200 monthly. The first thing you'll have to get is a better paying job. I don't know what work you're doing, but $50 weekly won't cover expenses. But - if you're working part-time, for "spending money" and your "needs" are taken care of by someone else - then you're looking to spend money on things non-essential to your daily survival, or "wants". Save your money until you're able to afford these things. You may find out after saving for several weeks or months, that you really don't want to spend that much money on whatever item you were saving for. Equate the amount of time you have to work to the item. As an example - my son wanted a GPS - at his wage, he had to work about 40 hours, to cover the cost. And remember - if you use a credit card, especially one with a high interest rate (my son was offered a card with an 18% rate), unless you pay the total balance every month, you're paying the credit card company a good bit of your money, leaving you less "spending money" in the long run!

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By guest (Guest Post)
March 26, 20080 found this helpful

Try dave ramsey he will help you out. Google him and go to his website!

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By guest (Guest Post)
March 26, 20080 found this helpful

You sound like you are ready to fall deep into the credit card trap that many young people fall into. At $200 month, it will be very hard to get credit, unless a parent co-signs for you, and this is such a bad idea. It is so easy to whip out a piece of plastic and buy something you want, like a meal or a movie, and then it will be long gone and forgotten when you get the bill. The interest rate compounds monthly and adds up quickly , especially if you don't pay in full every month. Don't get into this now-wait until you have a better income, when you might be able to get a card on your own, use it like once a month, and pay it off IN FULL every month, on time, to establish a payment record. Don't even think of it as a credit card, think of it as just a way to build credit and don't run it up. Every "late pay" or missed payment will harm future chances of getting credit, and the debit will increase alarmingly fast if you even just make minimum payments since the interest rate will be very high!

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March 26, 20080 found this helpful

DON'T. You won't grow on credit. It's a hoax that you "need credit" to do anything. You can still buy a house without a credit card. You can even buy a car without a credit card. And most banks' debit cards are underwritten by credit card companies like visa and master card and can be used anywhere those cards are taken and just like a credit card only they take the money right from your account. But any time they tell you you need a credit card you can use your debit card... just make sure you have the money in the bank to cover your purchase!

Don't fall into the Credit-Card-Trap!

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March 26, 20080 found this helpful

You do not have an credit problem - you have an income problem. PLEASE don't fall into the credit card TRAP. I agree with a previous reader - go to Dave Ramsey's website and find his radio program to listen to. It will really inspire you to live on what you make. If you absolutely need to use a "credit" card i.e. so you can make an online purchase - get a debit card that your bank issues that is backed by Master Card or Visa, but pays immediately out of your checking account. The borrower is SLAVE to the lender (Credit Cards) and this is oh-so-true! I have spent the past 3 years helping my niece get out of her credit card debt that was caused by always thinking that it could be paid off a "little at a time". You can not imagine the horrible dunning phone calls and harrassment she dealt with. If you can't pay for it today, save and pay tomorrow or next month.

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By 0 found this helpful
August 18, 2009

I was wondering if anybody can me with some advice. If you have bad credit or no credit where can you order from and not have to pay anything until the order is received? How can I receive a credit card, because I have been turned down quite a bit? I would like a credit card that at least would give you about $250.00 or more on your credit line.

By Jay L. from Montgomery, AL

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