Anonymous asked in Business & FinancePersonal Finance · 3 months ago

How to quickly and effectively build credit?

Sadly I am a little late to the credit building game. My parents had awful credit and told me to stay away from credit cards at all costs. Now I’m 20 and basically can’t get a loan for anything, even if I do the interest/apr is insanely high. I started a few months ago and got a secured card with my bank, and they only gave me a $300 limit. I also just got a capitol one card last month that I just made the first payment on (also with a $300 limit).

I’ve been told the best strategy is to utilize 9% of your limit and pay it all the day after your statement hits, which is what I’ve been doing. My current score is 666, but I still have no FICO score. I’m just wondering what I should be doing to build my credit as efficiently as possible. Should I try to increase my credit limit, get more cards, get a personal loan? I just want to be able to buy a new car preferably not at 18% apr. 

10 Answers

  • 3 months ago

    You might benefit from a credit builder loan if you are willing to pay some interest to somewhat speed up the process of building your credit score. No more cc's; and hold off on the new car.

    • Commenter avatarLogin to reply the answers
  • Steve
    Lv 6
    3 months ago

    Try applying for a gas card. Use it as needed and pay it off monthly. Establishing credit is a journey and not a very fast one.

    • Commenter avatarLogin to reply the answers
  • 3 months ago

    DO NOT use a credit card to buy a car. And, forget the car until your credit is good and you are earning a decent income.

    What you need to do is use a special card for people with poor credit. I know that Capital One offers such a card. You have to put money in an account that represents the money that you are permitted to "buy" using the credit card balance - and you must not draw out more money.

    The advise you were given is valid, but you can pay off your balance on the last day of the grace period, provided they get the money on that last day. And it will take a few months until your FICO score is changed to reflect your good credit record.

    • Commenter avatarLogin to reply the answers
  • 3 months ago

    cut credit cards in pieces

    analyze what you spend on useless stuff,luxuries,a car whose pmnt you cannot afford,trade

    it in,,get cash,buy an older maybe scruffy looking set of wheels with a good sturdy motor,with heat,, good headlights and taillights,brakes,,,

     get a jay oh bee,one you can do well,even if it does not pay what you want,, credit is dumb cash is king,

    look among your household possessions,,stuff in the garage you can sell at yard sales

    get trade training at a community college,,go full time,get a part time retail jobby,

    get classes in tech engineering,,the earth sciences,,they will assist in the trade gig,a double major

    teaching in sosh subjects means there are a glut of these majors out there competing with you,,are not of much use except in personnel offices

    some employers demand the salaried people be cross trained and able to perform the companys' business of record,

    or join the military,get free tech training,you get into superb shape,, many skills  used there  would also serve well in civilian occupations when you leave unca sams indentured servitude in 4 years,

    dave ramsey is great on dealing with debt,he is on you tube,and has a website

    • Commenter avatarLogin to reply the answers
  • How do you think about the answers? You can sign in to vote the answer.
  • 3 months ago

    You should not get any more cards. Getting only one card builds it most effectively. Getting more cards builds it less effectively. (Unfortunately, giving up a card does not undo the damage; once you have gotten more, the damage is done, and cannot be repaired.)

    Your main problem is that you are trying to do it too quickly. To build credit effectively, you need to do less, not more.

    Keep the cards and that you already have, but do not get any more cards or accounts.

    You cannot build your credit very much if you continue getting more cards.

    If you continue getting cards this often, then you will lose the credit that you have already built.

    To keep the credit that you have built, or build more, you need to stop getting new cards so often.

    Once a person has a card, they should not get their next one for over a year.

    • Commenter avatarLogin to reply the answers
  • Anonymous
    3 months ago

    I'm not sure if you were aware of it, but Google search's are free:


    • Commenter avatarLogin to reply the answers
  • 3 months ago

    You CAN'T quickly build a credit history.

    If you are ONLY 20, you are NOT late in the game. In fact, you are EARLY.

    If you are 18 or older in the US, you have a FICO score.

    The best advice for a car is don't even LOOK at anything less than 4 years old, and pay CASH.

    • Commenter avatarLogin to reply the answers
  • 3 months ago

    A FICO score is a specific type of credit score.

    If you have a capital one credit card, you have a FICO score.

    You aren't going to be able to purchase a new car at a decent interest rate because your income doesn't justify it. 

    - Buy a used car for cash is a much better deal for you.

    • Commenter avatarLogin to reply the answers
  • 3 months ago

    The other response is spot on.  An auto lender is going to be far more impressed by a sizable down payment and sufficient income than they will be over some dinky $300 limit credit cards.  

    • Commenter avatarLogin to reply the answers
  • Anonymous
    3 months ago

    Credit is not a game and it cannot be built quickly.  And as or even more important than your score is your INCOME and DOWN PAYMENT.

    Almost no 20 year old can buy a new car.

    It does not make much difference how much of your $300 limits you use or when you pay, just pay before the due date. 9% verus 30% just is not going make a hill of beans difference.

    Work on getting a job paying $2000 a month and after a year on the job and $1500-2500 down and you should be able to get a used car loan. 

    You are 2-3+ years away probably.

    And don't even think about leasing.

    You don't need another card or a personal loan. 

    You need good income and a down payment.

    • Commenter avatarLogin to reply the answers
Still have questions? Get your answers by asking now.