credit rating

[whaskins09]

just got my credit card for the first time, im a freshman in college. ive had it for a couple months now (4 or 5) and only spend 20$ a month and paid it off full each month. How long does it take for someone's credit to become good? if i were to apply for a loan to buy a house, which im not, but would i show up as having good credit? never had a single money problem before. just curious about how long it actually takes to "establish good credit." or does it take a couple years of repeated good credit card use to actually get a high credit rating?

thanks

[dealsaver]

Welcome to the world of credit. To get an idea of what creditors may think of you, you can request a $1 two month trial credit report, score, and monitoring service at PrivacyGuard.com(make sure you cancel before the two month offer is up. Rates skyrocket for their service after that). You should get an analysis of your credit along with a few FAKO scores. If you need tips on getting the best credit score, consider having your parents add you as an Authorized User if they are responsible users of credit. Your credit history will instantly be longer if that card reports AU's to the credit bureau. For more tips and tricks, you can visit creditnet.com. Just don't get sucked in by all the deadbeats and bankruptcy addicts there.

[FrugalTexan75]

It does take time. Since you are a freshman in college right now, that gives you about four years before you're out in the "real world." I would suggest keep doing what you're doing - vowing to pay off any charges you make each month. By the time you graduate, you will have a good amount of history for creditors. I did the same thing when I was in college. I got a card when I was a freshman, and paid it off every month. Once I graduated I was inunndated with offers, and unfortunately ended up with 5 cards by the end of my first year out. I would suggest that you keep it to just ONE card - lot easier to not get into trouble with just ONE card.

HTH,
Keeping It Frugal in TExas,
Laura

[katwoman]

If you don't have discipline, stick with your one card.

If you do have discipline, get ONLY prime cards and use them wisely. The best card you can have, in your situation, is American Express. This company likes to be the first or second card a person gets. They will always take a chance on young people in college. Conversely, if you get into credit problems or start to show you can't handle credit they will pull out fast. Very good strategy on their part.

Why do I counsel on having prime cards? You are the company you keep. If you have predatory issuers and pitsy credit limits other top tier issuers will view you as a risk. Just don't bother. Get Chase, Citibank, MBNA, AMEX.

And check your credit reports at least once a year.

Good luck.

[TBH]

Originally Posted by katwoman

The best card you can have, in your situation, is American Express. This company likes to be the first or second card a person gets. They will always take a chance on young people in college.

I got my first card in college and it was American Express. They described it to me as a CHARGE card, not a CREDIT card. You were actually expected to pay it off in full each month. This was very good training for me. When I realized I could get a credit card with rewards or one with no annual fee, I just ditched the American Express but continued to treat my credit cards like charge cards--paying them off every month. I still maintain the habit.

Kudos to the original poster for thinking about this so early and so carefully. You have a promising financial future ahead of you, if you're already asking these types of questions and planning ahead.

[brandondrury]

Don't spend that much time worrying about your credit score. Focus on educating yourself in an area that you will like and make money. Then when the loan officer looks at your situation he'll ask for collateral and you can say "I have this for collateral".

A smaller loan and bigger collateral mean more than a credit rating. I'm not saying that you shouldn't care about your credit rating, there are just bigger fish to fry.

Brandon

Don't spend that much time worrying about your credit score

I completely agree with this. People spend WAY too much time focusing on something they can't control (sort of).

That being said, I believe the magic number is 7. Once you have 7 years of credit history (around 25) you should see your credit score improve dramatically.

[cercis]

American Express now has a rewards card. I think they pay 3% back on eating out. It's the only card you can use at Costco. Now that we've got our mortgage, we're going to get one (we do eat out, way too much, so that 3% will help).

[sweeps]

Yeah, the Amex Costco card is the only credit card that can be used at Costco. You get 1% back for that. 2% back on travel (hotels, airfare, etc.). And 3% back on eating out (restaurants, fast food, etc.).

My only slight beef with the card is you get paid back in Costco dollars instead of cash. This means you miss out on some rewards when you use them (instead of the credit card).

[BillsGirl]

theres alot of credit card sites on the net putting all cards into categories for you and breaking them down to what you need to know!! I have no credit and since I am SAHM I don't think I ever will...lol

[cercis]

Sweeps - they pay in giftcards? I didn't know that. Well, that makes it a little less attractive. The nearest Costco is 4 hours away. I doubt we'll spend more than $100/year there. It's something we'll have to think about a little more.

[sweeps]

Your reward comes as a gift check that can only be used at Costco. It's not a big deal, I make good use of it, but of course cash is king.

One side note on Costco. They really push their executive membership. Every time I go I get a sales pitch on upgrading from the regular membership. If you run the numbers you have to spend something like $2800 a year at Costco just to break even on the executive membership. For a lot of people it's not worth it. Don't get suckered.

[cercis]

I already did that figuring. They told me that if I didn't get the difference in membership prices back in cash back, they'd make up the difference. I told them I'd stick with the basic membership. It's not like I'm going to drive that 4 hours that often.