young and would like to build credit for future. how so?

exactly what the thread title says, i want to be sure of my loans and mortages and i want to start now. after i watched my sister go into $2000 debt with MBNA, and dem bastards calling us every freaken day for like 3 months, i would not like to find myself in the same boat as her. anyways, how would i go about doing this?

i've talked to some others, and they told me get like 2 or 3 credit cards, use them every month, and pay your bill ontime every month. i have two cc's now (applied for a crapload but have only been accepted twice!!), should i get more? and what else can i do to increase my credit?

thanks

2 credits cards are all you need for now. May sure you pay the balance on time. Build up some assets by putting money in the bank.

Originally Posted by eon90210

exactly what the thread title says, i want to be sure of my loans and mortages and i want to start now. after i watched my sister go into $2000 debt with MBNA, and dem bastards calling us every freaken day for like 3 months, i would not like to find myself in the same boat as her. anyways, how would i go about doing this?

i've talked to some others, and they told me get like 2 or 3 credit cards, use them every month, and pay your bill ontime every month. i have two cc's now (applied for a crapload but have only been accepted twice!!), should i get more? and what else can i do to increase my credit?

thanks

Applying for so many credit cards at once isn't .. good for your credit.. but then again you're looking long term, they can probably ignore this.

Originally Posted by eon90210

exactly what the thread title says, i want to be sure of my loans and mortages and i want to start now.

You want to be sure of your loans and mortgage? You don't need a good credit rating. You need a good steady job and you need to not have a bunch of other debts. Thats what the banks look at, even if you've never borrowed money before.

To build a credit history, it helps to have a record of loans paid off on-time, steady income, and, preferably, some collateral.

If you're new at this, banks may not like the fact that you have too much credit cards, lines of credit etc. when you ask for a loan (because those are considered other loan accounts from which you can borrow from and not have enough income to pay off).

Once you have some history and collateral, credit cards & lines of credit accounts don't hurt your chances of getting more credit.

The bottom line is, don't owe. If you must owe, choose to owe on big ticket items that usually don't depreciate much such as houses or businesses.

Getting a car and financing it really helps your credit score...that is if you make your monthly payments on time....it would improve your credit score much faster than credit cards....if you get a car and buy it out right, that won't improve your score...u must finance the car....

Originally Posted by j3fan

Getting a car and financing it really helps your credit score...that is if you make your monthly payments on time....it would improve your credit score much faster than credit cards....if you get a car and buy it out right, that won't improve your score...u must finance the car....

Well... i wouldn't tell a young guy to go and start paying all sorts of interest on a car he didn't need in the first place, and which will probably cost him over $4000 in insurance the first year. :-) But your advice is good. Especially if you actually need a car and can get 0% financing.

Here's some rules i followed and suggest to others. They may not all directly increase your credit rating but you said you wanted to ensure good credit in the future and your personal philosophy on finances will play a big deal in that.

#1. Don't buy anything on credit* (*there are a few exceptions) unless you already have the cash to pay for it. Never buy something with CC if you don't already have the money in the bank. You're not using the CC as a way to get *more* money, it's just an alternative to debit and it builds your credit rating.

#2. Always pay off your entire credit card balance every month. If you followed rule #1 then this shouldn't be a problem.

#3. Use the CC for every purchase you can. Some places won't take CC and i wouldn't buy a 75cent chocolate bar on visa, but use it for EVERYTHING else. Not sure if you've moved out of your parent's house but once you start buying your own groceries, paying for a phone line, and all the other expenses of life, you'll be amazed at how much money you can cycle through your credit card. And since you're following rules 1 and 2 then you are building good credit and not paying a cent in interest.

That's pretty much it. But the main problem people have with debt is that they view a CC as a way to spend when they don't have the money. If people just spent within their means then most problems would be solved.

* and those exceptions. Cars and mortgages of course are the big exceptions. But if you have to take a 5 year financing plan on a big screen tv then you probably can't afford it, in the grand sceme of things, anyway. Live within your means. Sometimes you need to treat yourself, but don't make it a habit.

great! thanks for the information session guys, learned a lot. so two cards is enough, use it as much as i can and pay off the bills on time; that all i can do now as everything else is not feasible for me at this time. thanks again.

Originally Posted by eon90210

great! thanks for the information session guys, learned a lot. so two cards is enough, use it as much as i can and pay off the bills on time; that all i can do now as everything else is not feasible for me at this time. thanks again.

Don't use credit cards unless you can handle it. CC's are the crack cocaine of debt. The more you use it the easier it gets and when you start making the minimum payments you are royally screwed by then. Don't do it, if you do not need a credit card right now, wait a few years. Ask yourself this Is my job stable, can I make all my bill payments for three months from savings? If not don't.

Want a good mortgage rate, SAVE A BIG DOWNPAYMENT. The higher the DP the lower your costs are, no mortgage insurance for one. Banks are in business to loan money, lower risks get better rates.

Start a regular savings plan, pay yourself first. Cash in the bank=good nights sleep. You will most likely only need to borrow for 2 things in life, a house and a car.

i was told once to purchase a cd once a month and pay on time-all the time....they dont look at the dollar amout but rather if it was payed, on time and in full.

how about a line of credit.
or apply for a gic.
rsp.
all this shows that you have some kind of welth as well.
best bet would be to talk to your financial advisor (bank rep) and make a plan for your future.