Originally Posted by btm757
I was able to get a $2800 loan with no collateral and no co-signer from my bank (credit union) this was when I was 18 and had no credit yet. im now 21 and have almost a 800 credit score with no credit cards. Im told I can get my score higher if I got a credit card and used it but paid it off when the bill came
Originally Posted by knightmare1015
They told you a little bit wrong my friend. Yeah it can improve your credit as long as you show activity. But if you pay it off and don't use it again, it can harm your credit as well. It's really a two way street. Also don't apply for too many credit cards because each and every time your credit is checked it lowers your credit score with every credit reporting agency. Just be carefull and reasonable and you'll be ok.
yeah ben, paying it off DOES help BUT keeping a balance is even better. keep you balance around 25% of total credit. Of course you are paying interest, but it really helps your credit score ALOT. i cant say that my credit score is that high, but im definitely learning from my mistakes. When you do this, you are establishing payment history.
Also, NEVER cancel a card. your score takes a hit then too. just keep it even if you dont use it again. or go charge something on it every once in a while to keep it "active".
keep your debt to income ratio down as well. too much credit is not good. Try to stay below like 41% (you can buy a house with this debt to income ratio). basically this ratio is the ratio of how much you are paying out each month to how much you are bringing in each month.
Taking out bigeger loans and paying them off is good as well. If you have had a few bigger loans that you have paid for, banks and other institutions are more than lkely to lend you money. And like Ben said, having a major credit card (VISA, MC, etc) helps your score as well.
I need to take my own advice. i currently dont have a credit card but i do need to get one. I have learned alot about credit over the course of buying our new house. Trust me, ANY late payments you have, when you ever want to buy a house or car, you will have to explain them. They really hurt. even if its just a $15 payment at walmart or lowes or something.
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