Where do I begin? Need to build some credit.

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tina1rules
 
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Where do I begin? Need to build some credit.

Postby tina1rules » Wed Sep 17, 2014 3:29 pm

I have 0 debt. No credit cards, student loans, no mortgage defaults. I do have a few things in collection. I have tried to apply for credit cards of all kinds here and there the past several years. I never get approved EVER! I am just starting to try and figure all this credit stuff out. I have applied for a credit cards in the past month more times than I probably should have. Nothing ever. I have an account at I think it is credit.com...One of the 3 places on the free report thing you can do once a year tells me my file is too thin. According to the credit website my score is like 580. So then I thought maybe if I just break down and get a car loan that could be a build up my credit. Then my mind goes as if I'd get a good deal with my non-exsistant credit history.

soooooooooooo questions are. 1. Secured credit cards confuse me. Do those really help? How do they work? To me I feel like I give them money. I buy something with said card then have to pay them back for that something with my own money again?

2. If I did get some sort of financing for a car, after a few months would that look better to creditors?

3. Is it possible in a years time to get my score up to the 700 range?
My goal of all this is get a home. And if I have to overpay for a car loan or find a credit card with tons of interest for a year or two to get a home then so be it. I'd rather overpay for a year than 30. 'Thank you in advance.


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PlyrStar93
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Postby PlyrStar93 » Wed Sep 17, 2014 4:28 pm

Secure card means by applying for the card you will have to pay a deposit. Just like starting phone or Internet service and etc. if you did not have good enough credit or for whatever else reason you pay the deposit.

For the deposit, some may be eligible for refund after certain time but some others will refund the deposit only when you close your account. Issuer may keep the deposit if you are default on payments. In many cases, the credit limit is equal to amount of deposit paid, but there are different cases.

If you feel like giving them money--yes, but this is one of the easier ways to get credit with less than perfect credit history. After rebuilding you may get other prime cards and close this secured card to get your deposit back. Keep in mind that almost all secured cards charge annual fees, which is the most direct way you give money to them.

Other than that the issue becomes how a credit card works, which is you borrow money from them and later pay them back, like what you have said.

If you use responsibly then they can help your credit. Just pay bills on time and preferably in full each month, keep utilization low. On the other hand, if you default on payment then it still can hurt you.
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MemberSince99
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Postby MemberSince99 » Wed Sep 17, 2014 4:49 pm

Try a credit union they can be more forgiving than banks.


Secured is probalby the route you will have to go otherwise, and if that fails your only options are the scum of the credit earth like First Premiere or Credit One, true vulture companies. It is what it is.


I doubt you could get it to 700 in a year but you could probably hit mid 600s maybe a bit more if you do things right. It just takes time and effort, like anything worthwhile does.Keep doing things right and you'll be over 700 one day, well over.

tina1rules
 
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Postby tina1rules » Wed Sep 17, 2014 5:26 pm

Does your employment help your credit scores. I got a pretty good job for my level. November would make a full year. Before my employment was scattered. Oh and how high do the credit scores go. My understanding is 700 is pretty good but what equals great?

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PlyrStar93
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Postby PlyrStar93 » Wed Sep 17, 2014 9:44 pm

tina1rules wrote:Does your employment help your credit scores.


What's not in my FICO Score
...
Your salary, occupation, title, employer, date employed or employment history.
Lenders may consider this information, however, as may other types of scores.


Employment has no impact on FICO score, but lenders may use another model that includes employment in calculating scores.

ref http://www.myfico.com/crediteducation/whatsnotinyourscore.aspx
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Vattené
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Postby Vattené » Wed Sep 17, 2014 10:20 pm

Are you talking about income? It really doesn't matter too much. Once you are established it may help you with higher limits, but alone and with no history it doesn't provide lenders with any sense of your creditworthiness. I think the range goes up to 850. 800 is generally considered excellent.

You mention you have applied for several cards over the years but not what precisely. Just so we have more specifics: are you going for prime cards with rewards programs like a Chase Sapphire Preferred or a Discover it? If you haven't tried for a basic card with no rewards, you may be able to go for one of those just to build up to the point where you can get what you want.

In addition to secured cards, you may also consider store accounts. That is what I did to build a history (I just applied and got accepted for my first prime card in February). Something like a Walmart card is not a true credit card (it's not on a payment network and can't be used anywhere else) but helps you build credit without requiring any money upfront. Personally, I would prefer this route because it won't cost you anything. The terms on these accounts are terrible - low limits and high interest - but that is simply the territory for someone with no credit history.
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CarefulBuilder14
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Postby CarefulBuilder14 » Wed Sep 17, 2014 10:51 pm

Don't expect fast results. Even if you could instantly get several unsecured cards, it would take time for their good history to offset the bad history from your collection accounts. It could take a few years to get to 700.

Start with a secured card. Get in the habit of paying your bills on time, and then worry about making things complicated.
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popamode72
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Postby popamode72 » Wed Sep 17, 2014 11:00 pm

I agree with Vattene here. If you're gonna start out with a store card, I'd look into one of GE's cards, especially their Wal-Mart card because you can also track your TU Fico score for free. If not, the secured cards or a card from a Credit Union would be your other best options if you don't wanna end up with the likes of Credit One or Merrick Bank.

And I'd also work on those collections if you can. That might make a big difference.
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CarefulBuilder14
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Postby CarefulBuilder14 » Wed Sep 17, 2014 11:21 pm

Well, creditboards suggests a 580 is borderline for a Walmart store card. Maybe the OP would get one, but I figure with a credit history like that, avoiding unnecessary hard pulls and declined applications would be a good move.

Although it is hard to say if one more hard pull would suddenly make the OP ineligible even for certain secured cards.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

OldMan
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Postby OldMan » Thu Sep 18, 2014 6:13 am

I was in the exact same boat earlier this year. Try the Capital One Secure credit card for starters. If your credit report is clean of past issues, you'll probably be approved with only a $49 deposit. After it reports for about three months, I next applied for Discover, after they sent me an invitation to apply.

It takes time to build up your score so patience is your friend right now. Read all the approval threads you can to get an idea of where you need to be for a particular card before you apply for it. HP are not helpful in your situation.

Lastly, what reasons where you given for the denials in the past?
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