Question about someone trying to establish credit?
Link_The_World asked:
I am 24 years old, and I dont have a credit score. I have a monitoring program that shows me my new report every month as well as my new score. My score says it is a 0…and it says that I have a “thin file” which means I dont have enough information to have a credit score yet. It makes sense since I have never had anything in my name that would be on my report.
I am 24 years old, and I dont have a credit score. I have a monitoring program that shows me my new report every month as well as my new score. My score says it is a 0…and it says that I have a “thin file” which means I dont have enough information to have a credit score yet. It makes sense since I have never had anything in my name that would be on my report.
Anyway my question is, I finally got a credit card 5 months ago and I STILL dont have a score even though my report shows that I am making on time payments with that card.
Someone told me to NOT pay the balance off in full and to just pay off half the balance but roll over the balance. Obviously I will get finance charges but thats what they say to do to get a score quicker. I have never heard of this have you? What would you do if you were me and you wanted to get a credit score???
Christian
Pamela
Actually a good thing to do is get a credit card and make monthly payments on time. If you make on time payments monthly for a while, it looks really good on your credit report. Also, don’t get too many accounts open and revolving at a time. It actually looks bad when you have too many credit cards. Good luck.
Alicia
It takes 6 months of payments to generate a score. You’re almost there.
After that, never use more than 50% of your available credit limit. Every 2-3 months, pay it off in full, then don’t use it for an entire billing cycle. Let it report as a zero balance.
Doing this periodically will improve your scores. Any balance over 50% of your limit will reduce your scores, sometimes substantially, so keep the balances low.
Talk to your bank or a local credit union about getting some small installment loans that you can pay back over time (8-12 months), just to get some additional tradelines set up.
Pauline
You need a history of credit, and 5 months is still thin – but don’t start paying interest to “make” your credit report appear, that is not good.
It is better to wait the full year and pay off the balance every month for a better score, than pay interest for a lower score (because making partial payments is a lower score than paying off balance in full, all things being equal).
Jeremy
That is a bad idea. You can get an excellent credit score and pay off your balance every month. You just need more credit. Revolving general cards can be a bit harder to get, but retail store credit cards are easy to get and will build great credit scores for you. Just use the cards and pay off the balances every month. It will take awhile, but when you get a credit score, it will be high and you won’t be throwing money away.