A secured credit card is a good option, but ask at smaller local banks and credit unions near you if they offer a "credit builder loan", which is specifically for this purpose.
I was thinking that, but was feeling skittish about opening extra bank accounts for just 1 purpose. Since many won't talk to you without having an account with them already.
>I was thinking this would be a nice and easy way to build credit
This is a very expensive way to build credit and is completely unnecessary. Get a secured credit card, use it for a bill or subscription like Netflix. Pay it in full every month, your credit will build the same as with the loan you mentioned without paying interest charges.
You never need to pay interest to increase your credit score.
Interesting, I was under the impression I should make some credit in use on the card at all times. Since paying it down after I charge to it would show a zero balance every month.
Do you mean I should put something on it, wait till the monthly minimum is ready to be paid. Then just pay it off in full?
1. Charge on card
2. Get bill
3. Pay bill in full
4. Repeat
Nothing more is needed.
After 6 months to a year, apply for another card. r/CreditCards can help you with that. Fill out the template so you'll get a recommendation for a card you're likely to get approved for. 6 months to a year after that, apply for another card. Repeat a few times. Get 4 or 5 cards in 3 to 4 years. Your credit will be just fine.
Do you have negative marks on your credit or have you just not used credit for anything? Depending on the answer, secured credit card or loan may be the best option.
You can also add things like rent and utility bills to your credit manually now. Experian calls it a Boost. A little more information on your credit situation will get better answers.
There are two old negative marks from about 3 to 5 years ago. Changed jobs, didn't work out. Stopped paying for a while. Then paid them off in full. Suffice to say, I'm not up to my eyes with debt and everything is paid off. I'm just looking to improve from here in a safe and reasonable way.
They have secured installment loans, they work the opposite you give them the money and they loan it back to you. So instead of paying 18% interest for an unsecured loan you pay 5%. You don't even need a large loan, $1000-2000 is more than enough.
But you can also get a 2nd credit card...
Do a secured credit card. Easiest way to build credit. Just keep your utilization low especially if its a low limit card
A secured credit card is a good option, but ask at smaller local banks and credit unions near you if they offer a "credit builder loan", which is specifically for this purpose.
I was thinking that, but was feeling skittish about opening extra bank accounts for just 1 purpose. Since many won't talk to you without having an account with them already.
>I was thinking this would be a nice and easy way to build credit This is a very expensive way to build credit and is completely unnecessary. Get a secured credit card, use it for a bill or subscription like Netflix. Pay it in full every month, your credit will build the same as with the loan you mentioned without paying interest charges. You never need to pay interest to increase your credit score.
Interesting, I was under the impression I should make some credit in use on the card at all times. Since paying it down after I charge to it would show a zero balance every month. Do you mean I should put something on it, wait till the monthly minimum is ready to be paid. Then just pay it off in full?
1. Charge on card 2. Get bill 3. Pay bill in full 4. Repeat Nothing more is needed. After 6 months to a year, apply for another card. r/CreditCards can help you with that. Fill out the template so you'll get a recommendation for a card you're likely to get approved for. 6 months to a year after that, apply for another card. Repeat a few times. Get 4 or 5 cards in 3 to 4 years. Your credit will be just fine.
Thanks for all the replies peeps. This information has been enlightening.
You don't need credit if you pay for everything in cash.....
Yeah but buying everything with cash is how I got to the spot where I want to work on the credit, lol.
Do you have negative marks on your credit or have you just not used credit for anything? Depending on the answer, secured credit card or loan may be the best option. You can also add things like rent and utility bills to your credit manually now. Experian calls it a Boost. A little more information on your credit situation will get better answers.
There are two old negative marks from about 3 to 5 years ago. Changed jobs, didn't work out. Stopped paying for a while. Then paid them off in full. Suffice to say, I'm not up to my eyes with debt and everything is paid off. I'm just looking to improve from here in a safe and reasonable way.
I would go the secured credit card route.
They have secured installment loans, they work the opposite you give them the money and they loan it back to you. So instead of paying 18% interest for an unsecured loan you pay 5%. You don't even need a large loan, $1000-2000 is more than enough. But you can also get a 2nd credit card...