How should I begin building Credit?

[Trik'Stari]

You wouldn't have to lose the house if you're good with money. Don't get a payment that's rediculiously high, and still save money as your paying for the house.

Lets move it over to cars. Say me and you both had cars that broke down, I have good credit and 1000 bucks saved up. You have no credit and 1000 saved up. I'm getting the better car cause of my good credit and my 1000 bucks down payment. Your getting a piece of shit 1000 dollar car.

Very true. However, I would ask, that nice new fancy car you got for 1000$ down and credit, how much does it cost to fix when it breaks down, compared with the $1000 used card that might be older and cheaper to fix?

 

Credit is for responsible people.  That your parents bought a house they didn't have a backup plan for if one of them lost their job isn't credits fault.  If you want to blame the bank some for selling them a house at the top of their limit, sure there's some blame there, but personal responsibility reigns supreme.  Credit is a tool, the same as any other tool.  

Very very true, however my point still stands, the proof being reality. Lazy people get credit cards and go broke with them because they don't realize what credit is for, with banks profiting entirely off of it either way. And no matter how much you plan, there still can be circumstances where you end up bankrupt because of credit, as far as reality goes, cash is safer. While you can end up broke with cash, at least you can climb out of that without having to pay backed up debt.

[dfsdfgfkjsefoiqzemnd]

You wouldn't have to lose the house if you're good with money. Don't get a payment that's rediculiously high, and still save money as your paying for the house.

Lets move it over to cars. Say me and you both had cars that broke down, I have good credit and 1000 bucks saved up. You have no credit and 1000 saved up. I'm getting the better car cause of my good credit and my 1000 bucks down payment. Your getting a piece of shit 1000 dollar car.

 the difference is that Trik is going to have a 1000 dollar car that he owns outright and you are spending the next years paying a finance company 150% of whatever your good car is worth.

 

As for the whole "building credit" nonsense, that is exactly why I live here and not in the US.  We don't have to deal with all that. 

Here you go to your bank with proof of employment, show them your last 6 paychecks and they'll do a further check to make sure you don't already have a loan elsewhere.  Simple as that.

[moppop]

1. You don't buy a house on credit, you buy in cash (if you're smart)

2. While my own personal anecdote does inject bias, it is MORE than representative of the average person buying a house, or car, on credit, as represented by the housing/banking crash during the bush administration, which started long before then.

 

People suddenly didn't have to put a 30% down-payment on something to buy it with credit, instead they might have put 3% down, resulting in WAY higher interest rates, meaning it would take them far longer to actually pay off that debt, when the banks realized this, they started selling each other debt, and eventually the "trust" in that debt fell through, and we experienced a crash, and devaluation of our currency.

 

Debt, or credit, is representative of financial laziness. It's saying "I want it now, and I will agree to pay more than the item is worth in the long run, if I can have it now even though I don't have the money for it at this point in time".

 

You want a house and property? do what I am going to do. live cheap, save money, buy some land (I plan on 50 acres) with trees on it. Then rent it out to a tree farmer (or regular agricultural farmer if you can't get land with trees on it to begin with) and save the money from renting it out until you can afford to build a house. Generate your own wealth via smart investing and fiscal responsibility, instead of saying "FUCK IT, CREDIT CARD BITCH" and then going broke at 60.

 

As for living in the city....well that's a whole other discussion.

 

50 acres is probably going to cost you 40ish k. Land is an investment, yes, but an investment that also requires significant capital...particularly additional capital need to entice or build the facilities to entice those you want to tenant the land. It's a risk in itself. There are countless stories of people that got fucked doing exactly what you're doing especially if the don't do their due diligence (IE: buying land that's all clay and practically worthless for agriculture). The lack of due diligence applies to credit because that's how you get fucked.

 

The problem you have is that you simply refuse to separate simply having a credit card to abusing it (the "FUCK IT, CREDIT CARD BITCH" line). Is debt a massive problem? Yes, absolutely. However, when something is dangerous you simply don't just say 'STAY AWAY! FEAR THIS! FEAR! UNCERTAINTY! DOUBT!' as it perpetuates misunderstanding and abuse (see: drugs, firearms, ect). The proper way is to acknowledge and respect the danger through the safe and effective use so that people don't fall victim.

 

Again, as you even concluded others particularly in high cost of living areas simply won't have the option.

[Yoinkerman]

True enough.  If someone makes poor choices, credit is very dangerous.  Knowing your own limits, or artificially limiting yourself through secured or low limits, or buying a house well under your approved mortgage, can help.

 

I bought a townhouse earning $12/hr.  Now that I earn much more I'm not moving to a bigger house, I'm keeping this one.

[cjm86]

Very true. However, I would ask, that nice new fancy car you got for 1000$ down and credit, how much does it cost to fix when it breaks down, compared with the $1000 used card that might be older and cheaper to fix?

Very very true, however my point still stands, the proof being reality. Lazy people get credit cards and go broke with them because they don't realize what credit is for, with banks profiting entirely off of it either way. And no matter how much you plan, there still can be circumstances where you end up bankrupt because of credit, as far as reality goes, cash is safer. While you can end up broke with cash, at least you can climb out of that without having to pay backed up debt.

New cars last a very long time if you maintain it. A 1000 dollar car, you gotta ask "why is it 1000 bucks?" Your gonna have to pour money into it to keep it running. I just gotta make my payment and drive.

[cjm86]

True enough. If someone makes poor choices, credit is very dangerous. Knowing your own limits, or artificially limiting yourself through secured or low limits, or buying a house well under your approved mortgage, can help.

I bought a townhouse earning $12/hr. Now that I earn much more I'm not moving to a bigger house, I'm keeping this one.

Exactly "poor choices," he doesn't seem to understand that people bad with money shouldn't get credit cards. People smart with money use it to their advantage. I was a dumbass with my first credit card at 18. My credit is shitty because of it. If I had the mindset I do now at 18, I'd have a house and nice car cause of good credit.

[Trik'Stari]

50 acres is probably going to cost you 40ish k. Land is an investment, yes, but an investment that also requires significant capital...particularly additional capital need to entice or build the facilities to entice those you want to tenant the land. It's a risk in itself. There are countless stories of people that got fucked doing exactly what you're doing especially if the don't do their due diligence (IE: buying land that's all clay and practically worthless for agriculture). The lack of due diligence applies to credit because that's how you get fucked.

 

The problem you have is that you simply refuse to separate simply having a credit card to abusing it (the "FUCK IT, CREDIT CARD BITCH" line). Is debt a massive problem? Yes, absolutely. However, when something is dangerous you simply don't just say 'STAY AWAY! FEAR THIS! FEAR! UNCERTAINTY! DOUBT!' as it perpetuates understanding and abuse (see: drugs, firearms, ect). The proper way is to acknowledge and respect the danger through the safe and effective use so that people don't fall victim.

I live in the middle of 200 acres of farmland (we rent just the house). The landlord rent's the land out, it's shit soil (I know because they allow us to use a small portion, less than an acre, to grow our own veggies on it. and while they do grow, the soil is mostly clay and absolutely back breaking to dig in), and makes buku money off of it. He offers no facilities to the farmer.

 

And yes, credit can be useful, however, statistics are on my side here. most people abuse it, and go broke with it, which is why I personally refuse to ever own a credit card. I'm being responsible by not allowing myself that temptation Not to mention disagreeing with the entire premise of "I'll lend you 5 dollars if you pay me back more than 5 dollars over the next year". It's the entire cause of inflation, which devalues currency even if you pay it off on time.

 

New cars last a very long time if you maintain it. A 1000 dollar car, you gotta ask "why is it 1000 bucks?" Your gonna have to pour money into it to keep it running. I just gotta make my payment and drive.

Parts are cheaper on older cars, as is service because you can replace said parts yourself, as opposed to paying someone to do it for you (oil changes, alternator replacement, etc.). Newer cars require a hell of a lot more than a wrench and the internet to fix.

 

Exactly "poor choices," he doesn't seem to understand that people bad with money shouldn't get credit cards. People smart with money use it to their advantage. I was a dumbass with my first credit card at 18. My credit is shitty because of it. If I had the mindset I do now at 18, I'd have a house and nice car cause of good credit.

 

Again, that's MOST people, so that is why I say "don't do it". Not to mention, even if you are responsible with it, you still pay more than if you had paid in cash, and the banks still come out on top instead of you. Which is the entire reason that credit exists.

[cjm86]

the difference is that Trik is going to have a 1000 dollar car that he owns outright and you are spending the next years paying a finance company 150% of whatever your good car is worth.

As for the whole "building credit" nonsense, that is exactly why I live here and not in the US. We don't have to deal with all that.

Here you go to your bank with proof of employment, show them your last 6 paychecks and they'll do a further check to make sure you don't already have a loan elsewhere. Simple as that.

Again that's being smart with money. I wouldn't get a brand new car that costs 10-15k. I'd get a used one that ill pay off quickly. And his 1000 dollar car will probably break down like the other one in my example did.

[ttam]

Hey man, I had the chance to work for Discover Credit card back in the day. Apply for them and you should be able to get a $500 limit pretty easy.

 

You want to avoid carrying over a 30% balance every month. This can be a slight negative.

Best way to build credit is only use it when you know you can pay it off right away. This helps the most. So the $30 for gas which is easy to pay or the $250 you have saved for a PC part, charge it to credit and pay it off. 

[Swndlr]

Wait, you had to be 18 to get a card? In California, you can get a card as long as you have a government issued ID.

you get an id at 17/18

sometimes 16 (if learners permit counts)