stupkid

Hello. What's the quickest way to build credit? Never stepped into credit until recently. Always payed cash for everything and need ways to build credit up for future references.

Ex:
1. New cycle starts
2. Max credit card
3. Pay off
4. Repeat 2 & 3 until cycle ends.

Would repeating steps 2 and 3 as much as possible on one credit card build credit fast? Would opening more credit lines be better?

Debt will not be a worry since the credit will be payed off.

Please reply below.

jkelley

Do not max out your card.

Credit is drawn from credit card statements, other bills including insurance, car loan, rent or mortgage, and bank statements. They know how much you deposit, and they know how much you bought with credit. They make a ratio out of this. The lower the better. At the same time, yes, you have to buy things on credit to get credit. But just the fact that you pay the balance down, never make a late or minimum payment, will be 100x stronger towards your credit than maxing out your card. But it's still one of the factors they throw in their calculator.

History is one of the leading (if not the largest) factor.

Opening more lines will help in the long run. They ding you a little bit when they first open it but that goes away quickly.

Avoid having anyone run your credit for a LOAN. CreditKarma is fine, it's a soft inquiry. But trying to take out a loan and having someone run your credit hurts, and sticks for 2 years.


IMO use 20% of your credit limit every month, and then pay it off every month.

stupkid

No more than 20%? There is no fun in that haha.
The credit would not actually be maxed out, just get close to the limit.
And payments will always be paid in full and on time.
So the best option is to wait and be patient?

IrishCarBomb

This x100000 if you're trying to build credit there is no reason to max it out. Little stuff over time does add up.

jkelley

How much you actually spend on the credit card and paying it off ie "i've used lots and lots of credit and i'm a good boy and paid it off" will not rapidly grow your credit like a lot of people think. Credit bureaus actually look first at your credit "utilization." They look at your statement and say "so-and-so has spent X dollars of his Y available credit. let me divide those two numbers and get some dumb-ass ratio to evaluate his credit-worthiness." This number is below 1/5 (20%) to get the best rating for that particular part of a credit assessment.

Another thing that matters to them that a lot of people are unaware of is that they get your bank statements as well. They look pretty much specifically at how much you are regularly depositing into your accounts and then they take all of their other available info from your mortgage/rent, insurance bills, city bills, etc (which are all reported to them), and then divide your total let's call them "regular, recurring bills" by your "assumed" income (from your bank deposits) to get another ratio, DTI or debt-to-income. This number they like to be less than 50%, I believe.

SueTaing

Fastest way to build credit is below:

Cosign for a car loan

Have a credit card and pay on time. Do not exceed 50 percent of limit and maintain that balance. Best to just pay off every month but if you can't the limit is 50 percent.

It doesn't matter if you spend a dollar or a million. If the card is paid on time and balance is low it's all good.

Keep your inquiries at a min.

FYI I worked directly with Equifax Experian and Transunion for 3 years for restores and credit corrections.

WhyW

^This guy speaks truth.

So I've been playing the "build my credit score" game for awhile. Here is what I have learned.

I use a site called creditkarma.com. It does a soft credit report (so it doesn't show up) up to once a month so you can track your credit score. I went from barely having any credit to my name ($900) and unable to get any more credit to now I have $25,000 in credit and I did it in 2 years.

I've maxed out a card before, and even though I paid it off it absolutely killed my credit score. It was BAD. I also made a few large purchases last month and guess what? It lowered my credit score because my spending drastically increased. (I put 12k in car parts on my card, paid it down to 7 by the time it was reported) Even though I paid it in full that month, I still got a ding for it.

Do NOT let people run your credit unless you absolutely have to.

Do NOT max out your card. 30% of your credit limit maximum per month.

If you really want to increase your score quickly, get a car loan or cosign for one.

Personally I pay off my card in full every month. You can also just keep a low balance, but you'll be paying interest on it. I don't like giving the bank any of my money, so I don't carry a balance.