An Easy Way to Start Building Credit

My credit card has gotten me through some tough times. I've paid through the nose for it but without the card I would have been stuck. My last semester of school I couldn't get a private loan. But I was able to charge it. Yeah, that sounds like a horrible plan but I ended up getting hired by a company that reimbursed tuition that semester too. I would be lying if that balance wasn't a huge motivator in my decision process. Even though I didn't finish college until my late twenties I wouldn't have been able to finish college if I hadn't learned some useful habits early on.

How To Get a Card

I don't like the junk mail offers. Maybe you could find something you like but there is a much easier way to get a decent rate.

I recommend that people get a box store charge card. I used Sear's. I was shopping at the mall one day and was given an offer that involved cash back from my purchase and ended up leaving with free socks and a store card with a $100 limit. The card was only good inside the store and most big chains have these - JC Penny, Macy's do for example. It was used off and on for around a year and then one day I needed some car work done and ended up calling Sear's, getting approved by them to convert it to a full credit card and getting the repairs done to my car.

It was easy for me to get approved because Sear's used their history of me on their check. They had a year's worth of purchase history showing on time payments that anyone else wouldn't have seen. I ended up with a $300 limit and a low interest rate with no charge for just having the card.

It's a safe way to start building your credit. Use it to get gas or make small purchases and always pay it off on time.

You can be late with payments without suffering and immediate hit to your credit. In fact, usually it's not reported until you're 90 days late on normal bills.

How To Build Your Credit Cheaply And Fast

This isn't like the teeth whitening scam. You are going to your bank and looking for a secure loan. Usually you put something up as collateral. The bank says your boat or your RV or your collection of guitar amps that go to 11 is worth X dollars and they will give you a loan for that amount. If you welch on the bet that you'll be able to pay them back they take your stuff and sell it.

The thing about a secure loan is you can put up cash as collateral. The people at the bank might act like you're crazy when you say you would like a secure loan for $300 and would like to post $300 as collateral. The people at the credit burea won't see that though. They'll see a loan that was paid on time, every time and closed. That's like giving an 80's hair metal band cocaine.

You get your bank to set you up with a new account. This account holds $300 you own. That account becomes collateral for your $300 loan. You immediately take that $300 loan and deposit it back in to your account. The balance is now $600. Your payment will be around $25 a month. You set up your account to automatically make the monthly payment and then you forget about that account. At the end of the year you can come back to it, you'll have around $290 in it. So or ten dollars you will have put a strong mark on your credit report. If you're really crazy and want to build your credit set one of these up every month.

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