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Best Ways To Build Credit?

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  • james.hendrickson
    started a topic Best Ways To Build Credit?

    Best Ways To Build Credit?

    Okay, I know this is a more basic question...but the forums gets a lot of lurkers, so I'm asking partly for their benefit and partly because I just did a review of ways to improve ones credit score for an article I'm working on.

    What do you guys find has been the best way to build good credit?

  • disneysteve
    replied
    Originally posted by Moses007 View Post

    Here are a few smart ways to pay off debt fast to obtain good credit:

    Stop using credit cards.
    Pay as much as you can afford each month.
    Keep control of your spending.
    Double up on payments.
    Use windfalls to pay down balances.
    Doing Freelance work to earn extra money.
    Tackle debts with the highest interest rates first.
    Donít sacrifice the things you love the most.
    Most of these tips have nothing at all to do with improving your credit score, though since you're not in the US maybe that has something to do with that.

    Leave a comment:


  • jiM_Mi
    replied
    Originally posted by Moses007 View Post

    Here are a few smart ways to pay off debt fast to obtain good credit:

    Stop using credit cards.
    Pay as much as you can afford each month.
    Keep control of your spending.
    Double up on payments.
    Use windfalls to pay down balances.
    Doing Freelance work to earn extra money.
    Tackle debts with the highest interest rates first.
    Donít sacrifice the things you love the most.
    That is get out of debt advice, that is not how I would build credit.

    Leave a comment:


  • Moses007
    replied
    Originally posted by james.hendrickson View Post
    Okay, I know this is a more basic question...but the forums gets a lot of lurkers, so I'm asking partly for their benefit and partly because I just did a review of ways to improve ones credit score for an article I'm working on.

    What do you guys find has been the best way to build good credit?
    Here are a few smart ways to pay off debt fast to obtain good credit:

    Stop using credit cards.
    Pay as much as you can afford each month.
    Keep control of your spending.
    Double up on payments.
    Use windfalls to pay down balances.
    Doing Freelance work to earn extra money.
    Tackle debts with the highest interest rates first.
    Donít sacrifice the things you love the most.

    Leave a comment:


  • jiM_Mi
    replied
    Originally posted by disneysteve View Post
    I've done a little searching and numerous sites state that credit card companies report once a month, usually at the end of your billing cycle. I also saw things saying that isn't a hard and fast rule, so some companies may do it differently, but that contradicts what you're saying, Jim, about them reporting once a month for everyone regardless of billing cycle. Do you have a reference for your info?
    The companies reps I spoke to gave me the info, and as I watch month by month what is reported, it aligns with this.

    Example- collections account paid off on 7th of month, was not removed on credit report until 5th of following month on one report, but was removed on 27th of month from another report based on the different time frames each was pulling info.

    3 months later all the reports match- so if credit report is meant to be an instantaneous view of credit remember the following
    1) DO NOT go by credit karma
    2) check the credit bureaus sites directly
    3) give 60 days for all changes to credit to be seen on all credit reports/ credit bureaus
    4) long term good behavior is rewarded

    Leave a comment:


  • disneysteve
    replied
    I've done a little searching and numerous sites state that credit card companies report once a month, usually at the end of your billing cycle. I also saw things saying that isn't a hard and fast rule, so some companies may do it differently, but that contradicts what you're saying, Jim, about them reporting once a month for everyone regardless of billing cycle. Do you have a reference for your info?

    Leave a comment:


  • disneysteve
    replied
    Originally posted by jiM_Mi View Post

    The issue is NOT the due date. It is that the timeframe of what is reported to a bureau is cyclical- regardless of your accounts due date, the account holder (bank or credit card) is only reporting to the bureau 1x per month. If your bill is due on the 10th because you negotiated that, it will not change the fact that this particular bank always reports to bureaus on the 5th day of the month. The credit bureaus are updated MONTHLY not daily.
    Ah. I wasn't aware of this. You're saying Chase reports once a month, on the same day each month, for all of their credit card accounts regardless of the billing cycle for each of those accounts.
    Last edited by disneysteve; 08-04-2019, 04:21 PM.

    Leave a comment:


  • jiM_Mi
    replied
    Originally posted by kork13 View Post

    If this is a real concern for anyone, I've yet to find a credit card that didn't let me adjust the due date (and by extension, the billing/statement date). For the sake of leveling out my checking account balance, I get all of my credit card due dates to be the last week of the month, so that my second-half paycheck covers them, while my first-half paycheck covers mortgage, utilities, etc.
    The issue is NOT the due date. It is that the timeframe of what is reported to a bureau is cyclical- regardless of your accounts due date, the account holder (bank or credit card) is only reporting to the bureau 1x per month. If your bill is due on the 10th because you negotiated that, it will not change the fact that this particular bank always reports to bureaus on the 5th day of the month. The credit bureaus are updated MONTHLY not daily.

    Leave a comment:


  • jiM_Mi
    replied
    Originally posted by disneysteve View Post

    Just to clarify, I didn't say to pay before the due date. I said to pay before the billing date. My Marriott Visa billing cycle ends on the 24th. If we've had a month where we charged an unusually high amount, I'll send in a partial payment a few days before that.
    I didn't make my point well- even with paying the bill before the date due or statement date, people need to realize that it will take 45-60 days to report last months payment on a credit report, I am tracking things very detailed right now to see what gets removed, what changes the score and similar details.

    First, credit karma is a good summary of 2 reports in one interface, that is all its good for.
    Second, when a collections account was removed, credit karma showed the score going down because a 5 year account was removed- even though collections has a bigger impact than time, in my case the score went down because my next longest 2 accounts were 2 years and 15 months at the time.
    Third, back 10-20 years ago I had numerous car loans, student loans and mortgage payments so my credit was active (many accounts, each open for 4-10 years). Without those things (I own my current house, no car loans for 6 years, all student loans paid off 2004 or earlier- well past 7 year timeframe they stay on credit report). So the easy ways people build credit when they are 26 are not there when I am 46.
    Fourth- it is important to know macro things (like try to get 4-8 accounts open) to rebuild, vs the good behavior needed every month vs the time needed to rebuild (will take 4 years to achieve peak efficiency as accounts max out on score impact after 4 years.


    Leave a comment:


  • kork13
    replied
    Originally posted by james.hendrickson View Post

    Kork - good point. I didn't even know you could negotiate the due dates on payments. I assumed the dates were fixed and the individual borrower could not change them.
    I wouldn't call it "negotiating" the due date... Just a request. I've mostly always found it as on the website in the account options. Also if note, I think you can only move the date forward (so your balance is due earlier than it would have been)

    Leave a comment:


  • james.hendrickson
    replied
    Originally posted by kork13 View Post

    If this is a real concern for anyone, I've yet to find a credit card that didn't let me adjust the due date (and by extension, the billing/statement date). For the sake of leveling out my checking account balance, I get all of my credit card due dates to be the last week of the month, so that my second-half paycheck covers them, while my first-half paycheck covers mortgage, utilities, etc.
    Kork - good point. I didn't even know you could negotiate the due dates on payments. I assumed the dates were fixed and the individual borrower could not change them.

    Leave a comment:


  • kork13
    replied
    Originally posted by jiM_Mi View Post

    The challenge is not all cards are on same billing cycle, and not all bureaus pull info the same day

    so if a person has 3 cards, due on the 10th, 20th and 30th of each month
    and the cards themselves report on the 5th, 15th and 25th, the balances get reported as well as the last payment.
    If this is a real concern for anyone, I've yet to find a credit card that didn't let me adjust the due date (and by extension, the billing/statement date). For the sake of leveling out my checking account balance, I get all of my credit card due dates to be the last week of the month, so that my second-half paycheck covers them, while my first-half paycheck covers mortgage, utilities, etc.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by jiM_Mi View Post

    The challenge is not all cards are on same billing cycle, and not all bureaus pull info the same day

    so if a person has 3 cards, due on the 10th, 20th and 30th of each month
    and the cards themselves report on the 5th, 15th and 25th, the balances get reported as well as the last payment.
    Just to clarify, I didn't say to pay before the due date. I said to pay before the billing date. My Marriott Visa billing cycle ends on the 24th. If we've had a month where we charged an unusually high amount, I'll send in a partial payment a few days before that.

    Leave a comment:


  • creditcardfree
    replied
    Originally posted by jiM_Mi View Post

    Do not use credit karma as the gauge for what is reported. I pulled my transunion report yesterday, and the report has the monthly balance and total monthly payment I made each month. While I don't know if the balance is used to calculate the score, there is a portion of score as to what % of available credit is used- is it better for that ratio to be lower (with zero being best) or is a higher score given for a non zero low value?
    ,

    My nephew just reported this on his FB page, that Credit Karma is completely different than what was reported when a bank pulled his credit report. He was starting to look for a house, and had been using Credit Karma information to improve his credit. Apparently it was way off and he felt this was consumer fraud. Well when you look at their terms and conditions they state quite clearly they do their own analysis, so it's going to be different then any of the three credit bureaus. I do feel bad for him and I don't know what his credit situation is exactly, but it's an example of how people aren't doing their due diligence and can be misguided by other offerings.



    Leave a comment:


  • jiM_Mi
    replied
    Originally posted by disneysteve View Post

    That's interesting. It would be nice to be able to have things included that aren't traditionally counted.
    My utilities have boosted my experian score. I provided them by banking info, they reviewed constant transactions and used this to give me about a 10 point boost.

    Leave a comment:

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