[Tsar]

Originally Posted by Pampered-Z

Just to add to this thread. Just found this out while working with the banks on my daughter's new home.

Once you get the card, make sure you use it. I'm not saying to go nuts, buy something so that you make payments over time say pay it off in a few months. Also you should use the card at least 3-4 times a year and this will help you raise your credit limit and rating.

Buy something you can easily afford and then make the payments each month. Showing you are good at making the payments helps your credit more then then buying something at them paying off the full balance of the card each month.

My oldest daughter has 3-4 cards but only use 2 of them. She did the buy it / pay if off for years, even for large purchases. What happened is that did very little to help her credit. On one of the cards that she never used, without her knowing? ( or maybe didn't understand if they did notify her ) was that the CC company dropped her credit line from 10K to 5K becuase it was inactive for over a year. Well when that showed up on her credit report that the CC dropped her limit it really hurt her credit score! I never realized all this was factored in because I've had established credit over years. Seeing what my daughter went through was a mess! you would think that someone that pays off their bills right away would have good credit, but that's not how the creditors view it. They want to see more long term ability to make payments. So you need to balance you buying with paying withut getting beat up on the interest.

On the other side, My younger daughter that makes less money then her sister uses her CCs and makes the monthly payments and as a result she actually has far better credit reports because she has demonstated that she makes all her payments and her limits have been raised over the past few years.

One can always request the credit line to be toped out at certain point. A college student does not need a credit line that's 25k and he will likely not use it. So it's only natural to chop that down to only a few thousand, especially in todays economy.

As far as "paying stuff off ever time" vs "paying off everything at once", well if you actually look at the credit report, it will not say whether or not you were paying stuff off at once/over time. It will simply indicate if your account is in a good standing/ and how long it has been in good standing, in addition to if you have been late, and if your account is in collections.

I know I have never paid anything over time, it's stupid and costs extra money. However, my FICO score is close to 800, which is pretty damn good. It's all about ones ability to maintain their account in a good standing, and their debt to available credit ratio. Pretty easy stuff.

Originally Posted by Blacdout96

I never owned a cc, I took a loan out years ago, paid it off in half the time, credit skyrocketed, now they beat my door down with credit cards offers.

Not to burst bubbles, but everyone receives pre-approved CC applications. You can have bad credit (<700) and still receive them. Unless you paid off a house and a major car loan, it didn't change your credit by much.

Originally Posted by 7pointoh

Why not get a small personal loan from a bank and pay it off within six months? Paying off a loan on time or earlier can help build your credit score.

You wanna run to the bank for a "small personal loan" every time when you wanna buy something to build your credit?