What is the best way to build my credit if...

Question

I don't like banks or credit unions? Is it still possible? Couldn't I start out w/ a small credit card and then slowly build my credit?

Answer 1

creditrepairuniverse.net

repair and/or build your credit

fastest way to build up credit is with

secured credit card pay on time for 6 months.

Answer 2

Yes, you can start with a small store credit card.  Use it wisely and pay it off promptly will start you toward good credit.   You can also buy something you might have paid cash for anyway and make payments in order to get that good payment record on your credit report.

For instance, one of my 1st purchases was a bed.  I had the money to pay for it, but instead got it on a 1 year no interest deal.  I paid it off before the year was up & got something positive on the credit report.

Answer 3

I don't think you get a credit card anywhere but from a bank or credit union.

Answer 4

Let me detail the best way to use credit cards and build your credit.

First, the best way to use normal credit cards:

1. Find the rewards card(s) that will pay you the most for your normal expenses (I'll explain how in a second)

2. Funnel most/all of your normal expenses through your rewards card(s) without max'ing them out

3. Always pay your monthly balance off in full and on time.

That way you'll:

1. Build your credit quickly (based on responsible utilization of your lines of credit)

2. Avoid interest and fees

3. Earn great rewards

You can use this rewards calculator to find which rewards card (or combination of cards) will pay you the most in rewards for your normal expenses:

http://www.creditcardtuneup.com/

In addition to getting (and responsibly using) a couple credit cards, there are some other things you can do to build your credit, but first let me explain what makes up your FICO credit score.

FICO scores range from 300 to 850. So there's really 550 points possible. Here's how much of those 550 points are at stake for various kinds of credit usage behavior:

- About 35 percent is ‘payment history’ - Paying your credit cards on time and making at least minimum balance payments (though I recommend always paying them off in full each month to avoid interest)

- About 30 percent is ‘amounts owed’ - How much of your available credit are you using? The more of your available credit you have tapped, the less of this you get. By paying off your cards in full every month and not carrying a balance, you've done most of what you should have to do to earn these points. If you're really interested in "polishing" your FICO score (e.g. just before getting a mortgage), you may choose to pay your cards early or utilize them less. Personally, I just have about 7 credit cards, but only use a fraction of the available credit on them. That's why I'd recommend getting at least a couple credit cards.

- About 15 percent of your FICO score is ‘length of credit history’ -- You'll start building this as soon as you get your first credit cards or loans. Also, don't close your credit card accounts. Keep them open for the length of credit history.

- About 10 percent of your score is ‘new credit’ -- i.e. Applying for new lines of credit (cards or loans) chips away at these points. Each time you apply for a credit card your FICO score takes like a 10 point hit, but the impact goes away gradually and is totally gone 12 months after you applied for the card.

- The last 10 percent of your score is ‘types of credit’ -- You can can earn more of those points by having credit cards plus other forms of credit such as department store cards, vehicle loans, a mortgage, overdraft protection on your checking account, etc.

It's pretty easy to get a couple department store credit cards, so you should definitely do that to build your credit. Overdraft protection on your checking account is easy (if your bank offers it). I wouldn't go out of your way to get loans that you don't need, but having them and paying them responsibly helps your FICO score a little.