How does one really build a credit history in the US if you have had none?

Question

If one obtained a secured credit card from a bank, is it true that you should not spend more than 50% of your limit? Also, that you should not pay your balance in full but only the minimum amount to "start building your credit score?"

Answer 1

Actually it is more like 30% not 50%, and you can spend more you just need to keep it below that after you make a payment. i.e you have a  limit of 1000, but you charge 800$ on it.  You then need to make a payment 500$ to keep it below the 30%.  They will report you balance every month to the credit bureaus after your payment is due.  I have heard you should keep about a 10% balance on your cards for the best results in building your credit.  You want to provide a solid payment history so use it for small purchases then make the payments, I dont think making minimum payments would be good.  As for credit cards to get... You can go to your bank and get a secured card (you will have to put 300$-1000 down to get one, 300 is minimum, or you can get  a orchard or first premier card.  These cards have some fees attached to them but you do not have to put any money down to get them.

http://creditcardwarehouseonline.com

Answer 2

A secured credit card is an option. The revolving line of credit should report to all three credit bureaus monthly, and generally reports the balance on the date that your statement closes as the balance on the account. Oweing more than 30% of the credit line can negatively impact your credit score.

In addition to the secured credit card, an installment loan can have a positive impact on your credit.

As long as you make atleast the current payment due, on time, the credit bureaus will still report you current. The size of your payment will not "boost" your credit score.

Answer 3

This article lists several ways of building your credit history in the U.S., http://www.monitorbankrates.com/how-to-b...