I have no credit Where Do I Start

[jonjon101870]

Hello

 

I have no credit. I got a capitol one platinum with a $500. Where should I go from here

 

[stroked89coupe]

Secured card. Then let them both age for at least a year preferably two. Then move on to a prime lender or credit union. You don't have to get a secured card but you would probably end up being where you want to a little quicker.

Edited May 3, 2013 by stroked89coupe

[stroked89coupe]

Welcome to the community!!!!!!!

[trza]

There's not much reason to get a secured card, unless you can put down a decent amount of cash to get a relatively high limit right now. That could help you grow limits faster as future lenders compete for your attention. But if you're not in a hurry you can establish credit without the need for a secured card. The worst thing you could do is pick up a lot of credit very quickly, without being responsible enough to handle it. That's the road to credit hell and 7-10 years of purgatory to get out.

 

If you have some cash, say $1000, you could ask your bank for a secured loan right now. They lock up your cash and replace it with theirs. $1k for 12 months would be a payment of ~$85/mo. Make your 12 payments and you have added a positive installment loan on your report. You'll have a positive TL with your bank which might help you get an auto loan or credit card from them later, and you get your original loan amount back, too. FICO likes to see a mix of loan types, and I think the Auto and Insurance enhanced scores like installment loans? While you're talking to the banker, ask if they have a student card. I know that both of my Credit Unions will give almost anybody starting out a $500 limit to help them build credit. So maybe you try to do both. Or save the student card for the 3 month step. Your banker will be able to give you some guidance here.

 

3 billing cycles from now, you should qualify for some type of gas or store card with a low limit. I think it's better to choose an account that is useful to you than open up "any" tradeline, so you'll have to figure out what's best for your situation.

 

Make your payments on time each month for 6 months and you should get a small limit bump from CapOne. Then get the Walmart store card. It's horrible for carrying a balance, but it does give you a free TU credit score to help you track your progress. That will come in very handy as you choose which tradelines to add. And you can get credit limit increases every 4 months so it will grow quickly if you treat it right, helping to get you in with the prime lenders and best offers.

 

After a year your CapOne and Walmart cards should be at $1k+. Look to get a "real" card from your bank. Or...move to a Credit Union like DCU and pick up one of their cards. They offer EQ(?) scores for more tracking. You might also want to look to get another GE line.

 

At 18 months, you should be eligible for some prime banks.

[futurehomeowner?]

I disagree with the secured loan route. By doing this you are adding a TL that is only a year long. This will kill your age of accounts. I would stick to a secured card for now and in a few months try a method like the shopping cart trick or hell even try that now and build lines that way.