What are some tips on building good credit?
Janae B asked:
I just got my first credit card through my bank (wells fargo) and really want to start building credit. I know the basics of building credit like paying on time and not going over your limit but still confused on how it all works.
I just got my first credit card through my bank (wells fargo) and really want to start building credit. I know the basics of building credit like paying on time and not going over your limit but still confused on how it all works.
Can i make my payments through my online banking like transfer from my checking to my credit card? Also how does APR work? Or even just tips on building credit would be awesome too. 10 points best answer. Thanks!
Thomas
Tags: Bank Wells, Credit Card, Wells Fargo
September 4th, 2009 at 1:47 pm
Make SMALL purchases and then pay them off as soon as you get the bill. NEVER carry a balance on the card.
If you can’t manage to do that, then cut the card up because you’re headed for credit hell.
September 7th, 2009 at 6:27 pm
Yes, you should be able to make online payments thru your banks online billpay. I recommend paying all your bills that way.
If you don’t pay the account balance in full, you will be charged interest on the average daily balance at the monthly rate (Annual Percentage Rate (APR) divided by 12). If you pay in full, you pay no interest on purchases.
Best way to handle your new credit card, is to use the card for small purchases and pay it in full every month. This will build good payment history, avoid interest, and keep you out of debt.
September 9th, 2009 at 5:10 am
Ok,here you go, first you don’t even get close to your credit limit..or your score go’s down..Never use more then 35% of the limit.If you need more credit then it is better to get another card.
Charge a small amt.each month and then pay it off in full..Do not make monthly payments and pay interest..You can transfer funds from a savings acct. to a checking acct.. I never give any one the authorization to deduct monies from my accts. for and bills. However you might pay your bills using a electronic check service.
Now back to building your credit, apply for the following, a store card such as macy’s sears, nordstrom, gas cards,such as chevron or shell, use each one of the cards every two months, pay the bill in full when it arrives, put the cards away and do not get in the habit of using them and not paying in full,this is the way people get into trouble.
Now for a couple of life lessons, folks have a bad habit like when they don’t make enough money then they reach for the cards..remember it is not what you earn but what you save—also, rich people know how to save and invest poor people know how to spend, and finally if your not saving your money,at least 10% of what you earn then you cheating your future.. I hope i gave you some ideas and thoughts. Good Luck
September 9th, 2009 at 5:55 am
~ Charge only what you can afford to pay, when you get into the habit of charging only what you can afford, it lets future lenders and creditors know that you are a responsible borrower.
~Use only a small amount of the credit you have, keep your balance below 30% of your credit limit.
~Start with only one credit card, many first-time credit card users get a lot of credit cards within their first few years of using credit. Don’t do this. The more credit you have, the more you’ll end up using. Learn how to be responsible with credit before you apply for additional credit cards.
~Pay your balance in full and on time. Paying off your balance each month shows that you’re capable of paying bills, something creditors and lenders want to see.
~ Open up different trade lines than credit cards, have a mixture of personal loans, installments, revolving accounts.
September 10th, 2009 at 11:59 am
The best way to build solid credit is do just what you said: pay your bills on time and keep your balances low (under 30% of what your limit is).
The information on your credit report is run through an algorithm and produces your credit score. It judges you on a number of areas and is a well kept secret. According to most sources, it likes to see a well balanced profile (1-3 open credit cards with low balances and 1-3 open installment accounts, or loans, that are paid on time each month). They figure if you can pay a fixed payment on time each month along the ability to use credit cards responsibly for a significant amount of time, you are worthy of a high credit score.
Unfortunately, mistakes are often made on your credit report and must be corrected with the credit bureaus. It is important to check with the bureaus at least once per year to make sure everything is reporting correctly.
Check out:
Wells Fargo will allow you make your payments online with both your checking and credit accounts. APR stands for annual percentage rate and is charged as a finance charge for carrying a balance on most credit cards. They range from 0% to about 30% and the lower the better (again determined by your credit score).
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