What are some tips to start establishing credit?
Have a young friend who just starting out in the world, so to speak, and I want to advice them on several good ways to establish good credit. They want to eventually have a high enough score to get a good loan for a car.
Get a credit card and pay it in full each month. It is 100% myth that carrying balances is good for credit. Nothing, but nothing could be further from the truth. New Federal Laws have passed making it very hard for anyone under 21 to get a credit card. They must show steady employment with strong income ability to pay back. In that case, the person can just co-sign with a parent to develop credit. It is important that you have a checking account in good standing for 6 months with a bank when you apply for your first credit card. /.
Get a gas card and pay it off every month. Make sure they don't open A LOT of cards at one time and have your friend never ever go over the credit limit. It takes time to establish credit.
well a gas card is a great first credit card. But since your saving for a car. Try to use the card specific to monthly expense. Like a a cellphone phone bill let them pay the bill every month then pay it off in full every month. The cellphone on their own name also improves credit.
do not open too many credit cards, and do not have a lot of creditors look at your credit themore poepl that look at your credit the lower the credit score falls... i would say get one credit card,( visa master card) use it maybe once a month but only spend about 20.00 a month on it and pay it off in full this way the credit will be keept good, in about a few months the credit score will be higher.. alot of car dealerships do give good apr% to young people who have jobsand ahve been at the jobs for a bit.. I hope this helps
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