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Question Regarding Building Credit and Credit Cards

Discussion in 'Business & Tax Advice' started by TheKingGeek, Sep 8, 2013.

  1. TheKingGeek

    TheKingGeek Senior Member

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    I live in USA and decided that its time to start building credit since in this country if you don't have credit you can't buy a house or brand new car unless you pay in cash at the spot. Yesterday I got approve a Capital One's card with $500. So I was wondering would I build good credit if I use my card's full balance and then pay in full 1-2 days before my due date?, I once read that they don't like it when you do it like that because you are not giving them any benefits, but I couldn't care less if they like it or not, all I want to do is if I can build credit this way.

    Also feel free to give me your personal advices to build credit fast. Thank you so much in advance!
     
  2. Goal Line Technology

    Goal Line Technology Senior Member

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    Search out netmoney1
    he is a member here, and has an EXCELLENT affilliate program (for US only)
    which may be of interest to you,
    and if you ask him nicely, he may offer you a little discount j/k
    or advice on related Credit Repair etc...

    By the way, take care, because getting unlimited credit is not always the best solution to obtaining finance,
    just be prudent and plan well.
     
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    Last edited: Sep 8, 2013
  3. thedorf

    thedorf Senior Member

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    Don't do that. You might forget to pay (just one or two days in advance) and then have a late one on your record.

    I also have one of those cards. I operate the account online and linked it to my checking account for online payments.

    I usually pay my bill twice a month this way it is so easy. Never late and after awhile they started sending me auto loan requests.
     
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  4. Cratos

    Cratos Jr. VIP Jr. VIP Premium Member

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    Using up the full balance on the card is not advised. Paying the balance in full before the due date is good. Screw them if they like it or not. Their making billions off of the idiots that don't.
     
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  5. TheKingGeek

    TheKingGeek Senior Member

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    I will use the money to pay my bills etc, I will always save the $500 in my bank account, that way I will always have the money at the end of the month.
     
  6. learnquick

    learnquick Registered Member

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    I would only use up to 20-25 percent of credit available to you on that card at any given time -- so about $125 for your card. This way you won't look like your credit is maxed out.


    Also, you don't want to chance paying 2 days before it's due, find out the money did not post to your account for whatever reason, and get a late payment. That would suck; besides, those late payments screw up your credit score.


    I always pay mine off 5-7 days before it's due and then check online to make sure the money posts to the account.


    Once you have the card for a while, have good on-time payments, and keep the balance on the card fairly low, you should start to develop an sound history -- at least, that's how it worked for me.
     
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  7. kinlee

    kinlee Supreme Member

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    You can build good credit by setting up cell phone bill to take automatic payments from your credit card every month, well that's what my bank told me when I got a credit card. Shop around for credit cards, get one with no annual fee, some kind of cash back or points system, and the lower the interest the better.
    I try to pay off my bill completely every month, all that interest will add up if you leave a balance.
     
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  8. jstover77

    jstover77 Executive VIP Jr. VIP Premium Member

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    Most creditors don't report late payments until you get 30 days+ past due. Some don't report until you are 45-60 days out. You can always work with them too. Potential lenders/creditors generally want to see consistency with on time payments. They also have criteria according to things such as your debt to income ratio etc. Every lender has different criteria and tolerances. Really depends on what kind of credit you are trying to get.

    If you really want to build your credit fast you can have tradelines added to your profile.
     
  9. tnhomestead

    tnhomestead Regular Member

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    Kinda disagree with the original premise here -- you can get a house with no credit, and I drive a nice car with no credit. Its pretty easy, just buy a cheap used car, drive for a year and make a payment to yourself. !2 months later, trade in cheap car + cash and step up -- rinse and repeat. I cant see paying interest to someone else, and I got burned on credit cards 30 years ago. All it takes is a medical emergency, job loss etc and your credit is ruined. I much prefer cash. I mean add up the interest on a house -- doubles the price at least! And on a new car, you lose a huge chunk of value just by driving off the lot -- then you add interest into it and it kills you!

    As far as a house goes, they still do manual underwriting, just have to find a bank that offers it. Or do what I did -- buy a junk house, rehab, sell, and rinse and repeat! I stopped, but my buddy didnt -- hes a high school dropout with well over a million in property right now -- has a RV park in Ok, plus rentals all paid for.

    If you are going to use a card, keep the balance low and pay it off -- if anything goes wrong you dont want to be stuck with extra bills and no way to pay.

    Good Luck!
     
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  10. noseo

    noseo Regular Member

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    Like somebody already said, only use about 20% of your revolving credit. So put your lunches on the credit card (for example) and pay it off frequently. If you're using it and not making any late payments (60 days late or more), then you are building credit.

    Other things that can build credit: another card, school loan, car loan, or another installment loan such as furniture or appliances.

    There is very little point in worrying about your credit unless you're looking for a home loan at some point. As someone has already pointed out, you can just pay cash if you manage your money well.

    The real advantage of getting a loan at good interest is that you can use the money to work for you at a higher rate of return, e.g., in your business. If you have a business that requires your sweat equity but also requires cash at hand, it's not unusual to have 200%-300% returns on your cash annually, sometimes more (limited, of course, by how much business you can generate - you can't expect to get that rate of return passively and without limit).
     
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  11. netmoney1

    netmoney1 Executive VIP

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    Lots of info in this thread that isn't right. You can't buy a house without credit. And credit is HUGE for so much. If you have a business the days of "no PG (personal guarantee)" are long gone. If you want to get an office lease, a copier lease, get lines of credit, etc then they will pull personal credit. Every time. It is not only important in your personal life but in your business life as well.

    You just got a $500 capital one card. Don't apply for any more credit for some time. You will just get another card for $500...something referred to as "toy cards" because they are such low limits. Honestly, what does a $500 limit do? Not much. You need to get away from the toy card label and to do that here are some tips. (I am assuming you have limited credit history)

    1. Use the card for small purchases...but learn when your statement cut date is (when it reports to the credit bureaus) - and make sure that it is always paid down before that date. In order to achieve the maximum FICO scores your cards should carry a balance of 2% - 3%. If your balance reports $0 your score will actually be lower than if it had a balance of $10. So, on a $500 limit card keep a $10 balance reporting for the best effect.

    2. Find family members that have credit cards with some good age and limits and ask them to add you as an authorized user. This will transfer over the cards history to your reports. Now, make sure these cards are at least 5 years old and have limits north of $10,000 - and make sure there has never been a late payment reported. Cards that this works for: American Express, Capital One, Bank of America, Chase, Discover, JCPenny, Macy's, and some others. Let them know that you do not need physical possession of the card - they can cut it up when they receive it. You just want it for the aged accounts. Also, make sure the cards do not ever carry a balance of more than 20% of the card limit.

    Do not add more than 3 authorized user accounts. Let the capital one card age for 6 moths along with the authorized user accounts. Then apply for 2 more cards. Feel free to PM me at that time and I can let you know what cards are giving nice limits at the time.

    Good for you for wanting to get your credit right....if you are smart you can leverage it big time to help you in your business ventures. It makes life much easier.
     
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    Last edited: Sep 9, 2013
  12. LaLore

    LaLore Regular Member

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    Are purchasing tradelines an option if #2 is not a possibility? I'd never heard of purchasing tradelines before today. So not sure if legit or not.
     
  13. netmoney1

    netmoney1 Executive VIP

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    Stay away from anyone claiming they can add tradelines...it is bullshit 99.999999999999% of the time. Use authorized users.
     
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  14. LaLore

    LaLore Regular Member

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    Thanks. I'm going to pick up your product and work through it to fix obvious issues. I was denied for a rental recently due to credit check. Thought I had it in the bag...NOT!! Thanks, again.
     
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  15. CosmicSoundz

    CosmicSoundz BANNED BANNED

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    Want to know how I went from 620 to 800?

    When I was younger I fucked up. I owe a bank $7k (they will never get their money). The states statute of limitations is 4 years. Which means after 4 years of no payments the loan is void.

    anyway I got myself a Capital One credit card from apple.com (no interest for 1 year) and bought a macbook pro.. I set auto payments to happen so it gets paid off in 11 months.

    Just by doing that I went from 620 to 800.

    My guess on why..

    1. payments were made on time for 11 months straight.
    2. each payment was more than the min payment.

    Good luck!
     
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    Last edited: Sep 9, 2013
  16. codexehow

    codexehow Power Member

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    Can someone answer this: is maxing out the card and then paying the balance within 2-3 months as bad as maxing it out and just making the minimum payment each month?

    Appreciate it. Great discussion, btw.
     
  17. netmoney1

    netmoney1 Executive VIP

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    Welcome

    Any time you have a balance on the card it is going to lower your score. As your debt to credit limit increases the score drops. Always try to keep balances under 20% for the optimal score, and at 2% - 3% for the max benefit.

    Also, making the min payment each month will keep you in credit prison long....pay off as quickly as possible. If someone can afford to only make min payments then they can not afford to use the credit.
     
  18. codexehow

    codexehow Power Member

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    Thanks! This is great info.
     
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  19. Wealthy Wisdom

    Wealthy Wisdom Power Member

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    Thanks for making this thread TheKingGeek, a lot of good info in here. I'm going to apply for a credit card after I pay off my medical bills. Those killed me but I am determined to get them paid off to start building credit.
     
  20. TheKingGeek

    TheKingGeek Senior Member

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    Hey bro thank you so much for replying to my question! I thanked and was going to Rep+, but...:D
    [​IMG]

    I just noticed that you release your Credit Repaird product, dont know if you remember but I contacted you months ago trying to promote it. I already have some great ideas for it and pretty sure your product converts really good based on design etc. I have some more questions regarding credit and hopefully you will be able to answer.

    1. How can I find out the statement cut date?

    2. Just to be sure I get this right. If my card is $800, if statement cut date is 10/10/13. I should have $16-24 left on my balance and paid before the statement cut date?, and how soon should I paid?, guessing that paying to soon could hurt my credit.

    Thank you so much for sharing your knowledge with us for free and for your time. Thanks for everyone else for your answers as well!