24 Looking to build Credit... What are some good tips on your first Credit Card

[Bert.]

i mean i got a car loan on mine and been racking up on the cards but im paying things off and never missing payments or scewing around. should eventually go up again

whenever that is, im not too concerned anymore

 

[bigboss]

I cant stress how important credit is NT fam, I pull it everyday on people that are in the subprime range and its just unreal how many people don't take it serious. 

 

[Bert.]

hey man i care, thats why i pay my stuff and dont plan on opening new lines or anything for quite a while

 

[bigboss]

hey man i care, thats why i pay my stuff and dont plan on opening new lines or anything for quite a while

I wasn't directing that at you lol just more of a general statement because of the amount of young people (20-25) with already bad credit.

 

[bigboss]

I'm going to be honest here, never owned a CC and was not planning to since I feel I don't need it. Can someone please school me quickly on why it is or isn't important to get my credit score going etc. It is a topic no one every really tried explaining to me.

Its super important because unless you plan on paying cash for everything in life, which is damn near impossible for the average person, then you're gonna have to have credit to be able to get a loan. If you want to buy a car and finance it, you need good credit or you get screwed with interest rates. If you want to buy a house, you need good credit to get a loan for that. 

I went with the Capital One student card when I got started and it was only for $300 but I got 2 of them and never went above $150 on either. I personally am ocd about paying them off, I buy something then wait for it to post and pay it off then. I really don't even like using them. I would try to not use it on things that you couldn't pay straight up for to begin with. Basically don't spend money you don't have.

I would check at whatever bank you use and see what they offer as well.

---

Credit scores are kind of skewed though, student loans shouldn't be reported on your credit in my opinion, they inflate some peoples score and kill others.

 

[Bert.]

hey man i care, thats why i pay my stuff and dont plan on opening new lines or anything for quite a while

I wasn't directing that at you lol just more of a general statement because of the amount of young people (20-25) with already bad credit.

nah man i know. Im just saying i know its kinda important

i started working on it way too late but by the time im ready to start doing things in my life like buying a home and what not. my credit should be top notch

 

[pitman13]

Thats really good man , and you can assume that your real FICO score is higher than that.

Hopefully. I'll check my full FICO score sometime in June/July.

jelly

mines dipped

Mine dipped a bit when I paid of my student loan in Feb. That only made me focus on my CC utilization which was at a whopping 55%. Cut that down to about 15% and my score rose back up.


Stay focused Fellas.

 

[jewseejay]

Put the Cap1 phone rep in her place something fierce. Now i feel bad haha

So im paying all my cards down over lunch when i check my cap 1 for s&g's (neverrr use the card but its my oldest)

Me: Why do i have an outstanding balance, might have some fraud on my acoount

Her: netflix. Microsoft. Membership fee..

Me: oh snap must have 2 netflix accounts. Ill fix that membership fee though?

Her: yes your annual membership fee

Me: Ive always been paying this? Whats it for

Her: blah blah better service your account sir

Me: weird none of my other cards charge me a membership unless they provide me some sort of benefit like amex. what are your benefits?

Her. Uhhh umm uhhh sir this fee lets us better manage your acounnt

Me: if you can name one benfit i wont close my account....

Her: uhhh ummm hhg.

Me: well im at lunch now but ill call back and ask for a supervisor if they cant refund my fee im closing this account. Click

I could feel the tears in her eyes haha such a nice lady but she really had 0 answers

 

[kevenmayne]

Someone school me on this real quick.

But why does it matter how much credit you are utilizing on your credit cards, or how much you are paying it off every month, as long as you ARE paying the bill every month?

I understand using over "30%" of your credit line will hurt your score, but you can just lower that usage amount at any given time and your score will go back to "normal", after a month, true?

Couldn't you hypothetically, use 90% of your credit line for a year, make minimum payments the whole time, and then just lower it to 20% usage and have it be the same it would've been all year? I don't see how anything matters as long as you are not missing payments. if someone was going to have their credit ran, they could just pay off the cards and be good when the credit report is ran, no?

Only wondering cause I see people saying "I make sure I do this every month, blah blah"
Not saying I am using my whole credit line. Just using that as an example

 

[Chiron]

Someone school me on this real quick.

But why does it matter how much credit you are utilizing on your credit cards, or how much you are paying it off every month, as long as you ARE paying the bill every month?

I understand using over "30%" of your credit line will hurt your score, but you can just lower that usage amount at any given time and your score will go back to "normal", after a month, true?

Couldn't you hypothetically, use 90% of your credit line for a year, make minimum payments the whole time, and then just lower it to 20% usage and have it be the same it would've been all year? I don't see how anything matters as long as you are not missing payments. if someone was going to have their credit ran, they could just pay off the cards and be good when the credit report is ran, no?

Only wondering cause I see people saying "I make sure I do this every month, blah blah"
Not saying I am using my whole credit line. Just using that as an example

well for one why carry a huge balance and pay all that interest?

and two.. you should want your credit line pretty available in case of emergency

and three once its on the card it requires discipline to really spend and pay it responsibly and not fall into the swipe it and forget it mentality

 

[bigboss]

Someone school me on this real quick.
 

Your score won't just automatically go back to what is was before you started doing something like that, at least I don't think it would. 

 

[kevenmayne]

well for one why carry a huge balance and pay all that interest?
and two.. you should want your credit line pretty available in case of emergency
and three once its on the card it requires discipline to really spend and pay it responsibly and not fall into the swipe it and forget it mentality

I understand it would be not smart financially, and don't myself. I was just trying to understand how credit worked more. I was seeing if it was more in depth than what I was saying as an example. Because, I think what I was saying is true.

 

[kevenmayne]

Your score won't just automatically go back to what is was before you started doing something like that, at least I don't think it would. 

it won't go back to what it was right away, but after the next bill cycle (or whenever your credit reports your stuff) it will update on your credit report and go back to what it was. At least that's what I've gathered and noticed from my experience. And don't see how it wouldn't go back

 

[crcballer55]

 

well for one why carry a huge balance and pay all that interest?
and two.. you should want your credit line pretty available in case of emergency
and three once its on the card it requires discipline to really spend and pay it responsibly and not fall into the swipe it and forget it mentality

I understand it would be not smart financially, and don't myself. I was just trying to understand how credit worked more. I was seeing if it was more in depth than what I was saying as an example. Because, I think what I was saying is true.

In theory, since credit reports don't obtain your income history, a spike or consistent utilization of your available credit might mean you're a higher credit risk and therefore they drop your score to discourage that spending and show others you might be a higher risk than other borrowers.

In the real world, the credit scoring system is highly flawed both in its logic and implementation. You can be a millionaire with a 7 figure income and it wouldn't affect your credit score one bit. You can rent an apartment, pay your utilities and other bills on time every month and it won't affect your credit history one bit since those aren't reported (even though the scoring system is supposed to show how responsible you are). The whole point is to get you to borrow money by rewarding you with a higher score for borrowing money so you can later have the opportunity to borrow more money at a lower rate.

 

[capital sb]

Yes your score would go back to where it was before you maxed out your cards. Once you max out your cards it is very hard to pay off, and the interest that you end up paying really hurts you over time. If you pay just the minimum it would take you maybe 2-5 years to pay off depending how high your limit is.

 

[crcballer55]

Yes your score would go back to where it was before you maxed out your cards. Once you max out your cards it is very hard to pay off, and the interest that you end up paying really hurts you over time. If you pay just the minimum it would take you maybe 2-5 years to pay off depending how high your limit is.

It's actually more like 20-25 just paying the minimum

 

[kevenmayne]

It's actually more like 20-25 just paying the minimum

Yes. My limit is at 1.5k only and that alone would take 3years to pay lol. Can't imagine with a 10k limit

 

[bigboss]

 
In theory, since credit reports don't obtain your income history, a spike or consistent utilization of your available credit might mean you're a higher credit risk and therefore they drop your score to discourage that spending and show others you might be a higher risk than other borrowers.

In the real world, the credit scoring system is highly flawed both in its logic and implementation. You can be a millionaire with a 7 figure income and it wouldn't affect your credit score one bit. You can rent an apartment, pay your utilities and other bills on time every month and it won't affect your credit history one bit since those aren't reported (even though the scoring system is supposed to show how responsible you are). The whole point is to get you to borrow money by rewarding you with a higher score for borrowing money so you can later have the opportunity to borrow more money at a lower rate.

Very true, I see people all the time that have a score that doesn't reflect their report. They do report if you stop paying rent that's for sure lol You can easily lie and get a high credit limit as well.

 

[crcballer55]

 

 
In theory, since credit reports don't obtain your income history, a spike or consistent utilization of your available credit might mean you're a higher credit risk and therefore they drop your score to discourage that spending and show others you might be a higher risk than other borrowers.

In the real world, the credit scoring system is highly flawed both in its logic and implementation. You can be a millionaire with a 7 figure income and it wouldn't affect your credit score one bit. You can rent an apartment, pay your utilities and other bills on time every month and it won't affect your credit history one bit since those aren't reported (even though the scoring system is supposed to show how responsible you are). The whole point is to get you to borrow money by rewarding you with a higher score for borrowing money so you can later have the opportunity to borrow more money at a lower rate.

Very true, I see people all the time that have a score that doesn't reflect their report. They do report if you stop paying rent that's for sure lol You can easily lie and get a high credit limit as well.

It depends on the landlord though. If it's a large company, yes. If it's a smaller 2-3 unit or private investor, probably not.

 

[omariwestafari]

what do u guys think of those letters u get in the mail that say get a loan from 2500- 20000 right away?

 

[crcballer55]

what do u guys think of those letters u get in the mail that say get a loan from 2500- 20000 right away?

If they're soliciting you to borrow their money you're probably getting taken. Especially these places promoting the title loans.

 

[nawghtyhare]

Woke up this morning
I set up a payment for my cap1 card to be paid on Friday
I just checked to see if it went through and all that
And notice they raised my limit to 2.5k from 750
Pretty surprised and was shocked
My card always carries a balance since I use it for netflix and other reoccurring charges
Never been late and always pay at least my min to $100 every month

 

[willie mcfly22]

Woke up this morning
I set up a payment for my cap1 card to be paid on Friday
I just checked to see if it went through and all that
And notice they raised my limit to 2.5k from 750
Pretty surprised and was shocked
My card always carries a balance since I use it for netflix and other reoccurring charges
Never been late and always pay at least my min to $100 every month

How long have you had the card?

 

[omariwestafari]

Idk how yall limits so low. After my third year of college i had 11k worth of credit limit with 3 credit cards. 7k being my highest on one.

 

[nawghtyhare]

Woke up this morning
I set up a payment for my cap1 card to be paid on Friday
I just checked to see if it went through and all that
And notice they raised my limit to 2.5k from 750
Pretty surprised and was shocked
My card always carries a balance since I use it for netflix and other reoccurring charges
Never been late and always pay at least my min to $100 every month

How long have you had the card?

Since 2013
Started with a limit of 300