Discussion Forums > Technology
Credit Cards and Statements
mgz:
--- Quote from: Tatsujin on February 03, 2013, 07:30:36 AM ---I got another question. I already have an unsecured credit card from my job and I've been paying it in full every month. I want to build my credit faster so I was thinking of getting a secured credit card and doing the same thing with it. Would that help my credit score? I need to achieve 650 credit score as quickly as possible. Tips?
--- End quote ---
it takes at least 2 years to "build your credit" when you are starting from scratch generally speaking.
There isnt much you can do to speed that up as you credit score simply reflects your reliability to pay money you owe. So keeping something paid off in full for a few months doesnt do much.
Also what is your credit score currently?
as 650 isnt terribly high
Tatsujin:
--- Quote from: Ixarku on February 03, 2013, 01:23:05 PM ---
--- Quote from: Tatsujin on February 03, 2013, 07:30:36 AM ---I got another question. I already have an unsecured credit card from my job and I've been paying it in full every month. I want to build my credit faster so I was thinking of getting a secured credit card and doing the same thing with it. Would that help my credit score? I need to achieve 650 credit score as quickly as possible. Tips?
--- End quote ---
Here are a few basic tips to raising your credit score quickly. Also here. I've looked at a few other articles and they all generally agree on the same things.
I wouldn't suggest getting a secured card unless you have to. Secured cards typically carry higher fees and/or higher interest rates than unsecured cards, so odds are you'll get screwed from that angle. Secured would be a viable option for rebuilding your credit if your credit is already bad and you can't get a loan another way. As well, as the above articles suggest, opening new accounts does bring your score down a bit, at least in the short term.
Oh, and for the love of God, don't fall for any "repair your credit" scams.
--- End quote ---
You don't pay interest at all if you pay everything in full every month. The secured credit card will be there to just swipe for 20-50 dollars a month and pay it all in one go. I am not and will never plan on having a high balance and paying it off every month. That's just a waste of time and money and I don't need anything important at the moment. But now I know that if you open up a new credit card then it will go down a little bit. Question is, how much is little bit? And does the credit score get evaluated every month? So does it go up every month? By how much?
I have a credit score of 509 by the way. If you get 625, most credit card companies will approve you. 650 will get you a near-guaranteed approval.
Ixarku:
Your credit score (and there actually are quite a few, but the FICO score is the best known one) can basically change at any time. Creditors typically report to the bureaus once a month. Simply applying for credit can cause your score to change. If somebody pulls a credit bureau report on you, your score will change. By exactly how much, I can't say; you can probably find some information about the FICO score if you look for it, but the calculation of many scores is proprietary information and you may not be able to find definitive information.
Bottom line, though, is not to worry too much about your exact score unless you have a specific reason to, like you're going to be applying for a home loan in a few months. It's pretty unlikely, almost impossible, that you're going to be able to predict exactly how your scores will change over time. This is why most of the advice you see online is general tips.
As far as the secured cards go, like any other credit, the terms will vary from product to product, lender to lender. Just because you don't have to pay interest if you pay the balance every month doesn't mean, for example, that the creditor won't charge you an annual fee the moment that you get the card. Some regulatory changes have gone into effect in recent years affecting exactly how much they can gouge you for, but I don't remember the exact details offhand.
Edit -- IIRC, a lender can charge no more than 25% of the initial credit limit in non-penalty fees in the first year the account is open. So for example, a one point you might have seen a lender offer, say, a $150 credit limit on an unsecured card to people with bad credit, and the lender could have charged a $25 application fee followed by an $80 annual fee, all of which would be billed on the first statement. Banks can't do that kind of stuff anymore. This particular limit doesn't apply to fees for returned checks (NSF / insufficient funds), late fees, or over-the-credit-limit fees -- these so-called penalty fees have different rules.
mgz:
--- Quote from: Tatsujin on February 03, 2013, 07:56:01 PM ---
--- Quote from: Ixarku on February 03, 2013, 01:23:05 PM ---
--- Quote from: Tatsujin on February 03, 2013, 07:30:36 AM ---I got another question. I already have an unsecured credit card from my job and I've been paying it in full every month. I want to build my credit faster so I was thinking of getting a secured credit card and doing the same thing with it. Would that help my credit score? I need to achieve 650 credit score as quickly as possible. Tips?
--- End quote ---
Here are a few basic tips to raising your credit score quickly. Also here. I've looked at a few other articles and they all generally agree on the same things.
I wouldn't suggest getting a secured card unless you have to. Secured cards typically carry higher fees and/or higher interest rates than unsecured cards, so odds are you'll get screwed from that angle. Secured would be a viable option for rebuilding your credit if your credit is already bad and you can't get a loan another way. As well, as the above articles suggest, opening new accounts does bring your score down a bit, at least in the short term.
Oh, and for the love of God, don't fall for any "repair your credit" scams.
--- End quote ---
You don't pay interest at all if you pay everything in full every month. The secured credit card will be there to just swipe for 20-50 dollars a month and pay it all in one go. I am not and will never plan on having a high balance and paying it off every month. That's just a waste of time and money and I don't need anything important at the moment. But now I know that if you open up a new credit card then it will go down a little bit. Question is, how much is little bit? And does the credit score get evaluated every month? So does it go up every month? By how much?
I have a credit score of 509 by the way. If you get 625, most credit card companies will approve you. 650 will get you a near-guaranteed approval.
--- End quote ---
why do you need your credit up and what kind of time frame are you looking for.
Because like ix said it can go up at any time or down. But generally speaking its a slow and steady kinda thing.
If you are looking for a loan it will take you time and even if your score improves over the next 6-8 months you would still likely get hammered with high rates.
Because while 650 score nearly guarantees you approval for loans, it isnt a good credit score per say.
In short though keep paying your credit card off, dont constantly apply for things that require you to have credit checks(dont apply for several credit cards or check your credit score constantly) dont needlessly try to acquire credit potential these all negatively affect your score.
And i know i said it several times already but credit score takes time to acquire. Mine was like 790 last time i check when i bought my house but i have maintained perfect credit since i was 18
Ixarku:
--- Quote from: mgz on February 04, 2013, 11:58:16 AM ---And i know i said it several times already but credit score takes time to acquire. Mine was like 790 last time i check when i bought my house but i have maintained perfect credit since i was 18
--- End quote ---
Good job! It's great that you didn't have to learn about bad credit the hard way.
Another general bit of information for people is that you can recover from stuff like collections, bankruptcy, etc; it just takes years for it to roll off. With credit cards, it's pretty much standard practice for lenders to keep at least 24 months of payment history -- this is why even one late payment can fuck you over for a while.
In my case, back in the mid '90s, I got into some trouble with credit card debt. I racked up some of my own debt on stupid things, and while I was living with my parents, I opened several credit cards up for my parents use under my own name. These days, I'd have a lot better sense then that, but, hell, it was my parents -- they were having difficulties and they promised to pay the bills on time, and at the time it didn't seem like a big risk. Well, in '98 I decided to move to California, and quite by accident like a month before I was supposed to leave, I found a past due bill laying around that I didn't recognize, for a card under my name -- my mom had been intercepting the bills (with my prior permission) so that she could pay them. Except that she wasn't paying them, and I quickly found out that I had thousands of dollars just going into collections for several different accounts.
So I put an end to that immediately, got all the cards back from my mom, destroyed them, learned about collections the hard way, borrowed some money from someone else, and got most everything settled before I moved. It really fucked over my life for a few years, but eventually I started making enough money to climb out of debt, and about 7 years later I had zero credit card debt. I applied for a car loan 3 years ago, and at the time, my score with one bureau was I think 820, and was 840 with another. It was great having the dealership kiss my butt while I was there. I rejected the first couple of offers they made me for financing, and eventually walked out with a $18,000 loan at 3.9% for 3 or 4 years, don't remember. I paid off the loan in a little over a year anyway, at a total cost of about $420 in interest.
In any case, the point is that, even with collections or other bad stuff on your credit history, it is still possible to recover and get good credit scores, given enough time & enough income, and by doing the right things consistently.
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