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How to get credit
#college #money-management #money #investment-management #finance
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4 answers
Kenneth Romanowski
CFP Board Emeritus (R), CTFA (Ret.), Instructor and Researcher of Financial History
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Kenneth’s Answer
Hello, Mohamed. Chris Engebretson's response is very good. Allow me to add a few additional thoughts:
1. The first is time. The longer you are at your residence or job, the better. Also, the longer your credit history, the better, especially if you have a long history of making payments on time. Where do you start? Once you have at least 6 to 12 months of income and have lived at the same residence for at least that amount of time, my first suggestion would be to apply for credit at a retailer. Retailers make money selling products, so they tend to be a bit more lenient with credit when you are first starting out. The store makes money on your purchase AND on your credit.
More credit accounts mean more sales for the store. Don't apply at many places at once. Go for one card and If accepted, make on-time payments for a year. After a year, apply for another card at a different retailer. Do the same thing and after 2 years have gone by, apply for a Mastercard or Visa. I have also seen Discover Card offer credit cards to college students with little or no credit. If accepted, you may only receive a small line of credit, but it is a good start. After a year, apply for a retail card.
2. A retail store may offer a promotion if you apply for credit. The store may be trying to reach a certain quota of applications to increase the number of credit accounts they have. If you see a promotion, you may have a better chance of acceptance.
2. Since you mention that you are a student, you may need to be at a certain minimum age to get started. The minimum age can vary depending on the state in which you live.
3. If you have a family member with good credit, if your family member is willing to help, apply for a joint credit card or loan. Just be sure that your payment history is reported for both your family member AND you. It's also important that the family member have good credit to increase your chances of approval. Your family member must also understand that if you do not pay your bills, they will be responsible.
I hope that this information is helpful. Good luck to you!
See if a family member with good, established credit will consider applying for a joint credit with you.
Consider applying at a retail store and gradually build your credit history over time.
1. The first is time. The longer you are at your residence or job, the better. Also, the longer your credit history, the better, especially if you have a long history of making payments on time. Where do you start? Once you have at least 6 to 12 months of income and have lived at the same residence for at least that amount of time, my first suggestion would be to apply for credit at a retailer. Retailers make money selling products, so they tend to be a bit more lenient with credit when you are first starting out. The store makes money on your purchase AND on your credit.
More credit accounts mean more sales for the store. Don't apply at many places at once. Go for one card and If accepted, make on-time payments for a year. After a year, apply for another card at a different retailer. Do the same thing and after 2 years have gone by, apply for a Mastercard or Visa. I have also seen Discover Card offer credit cards to college students with little or no credit. If accepted, you may only receive a small line of credit, but it is a good start. After a year, apply for a retail card.
2. A retail store may offer a promotion if you apply for credit. The store may be trying to reach a certain quota of applications to increase the number of credit accounts they have. If you see a promotion, you may have a better chance of acceptance.
2. Since you mention that you are a student, you may need to be at a certain minimum age to get started. The minimum age can vary depending on the state in which you live.
3. If you have a family member with good credit, if your family member is willing to help, apply for a joint credit card or loan. Just be sure that your payment history is reported for both your family member AND you. It's also important that the family member have good credit to increase your chances of approval. Your family member must also understand that if you do not pay your bills, they will be responsible.
I hope that this information is helpful. Good luck to you!
Kenneth recommends the following next steps:
Updated
Chris’s Answer
The single most important factor in establishing good credit is to pay all of your bills on time. Once a late payment is reported to a credit bureau (Equifax, Experian, TransUnion) that information will reduce your score and can stay on your report for up to seven years. That said, damaged credit can be mitigated by settling outstanding balances and resuming payment or disputing inaccurate information. There are other factors that determine your credit score, such as the amount or your debt relative to your available credit, age of credit accounts and number of recent applications for credit but on-time payment is the most impactful action you can take. See https://www.myfico.com/credit-education/improve-your-credit-score
Updated
Cassandra’s Answer
Per the bank we are affiliated with. I asked the same question for a client recently. Best way is to establish credit is to put all of your utilities in your name. The utilities will report to the credit companies establishing credit without having to get lines of credit. Get one credit card after a year of perfect payments on your utilities. You don't need several cards one or two will be sufficient. Do not carry balances. Find something like netflix thst bills monthly at a small fee and pay it every time. Don't wait for the bill to cone due or carry a balance. Good luck!!
Updated
Yasemin’s Answer
Hi Mohamed! In addition to the previous answers, I would also apply for a credit card! In college I received my first credit card and was very careful with my payments which helped build my credit. If you are younger than 18 I believe you can also open a joint account with parents or have a student credit card. I would look further into this as it can help build credit earlier on in life!
I hope this helps!
I wish you the best!
I hope this helps!
I wish you the best!