Building Credit: The do's and don'ts

[Esquire]

Credit is like alcohol.

In moderation ... good.

In excess ... bad.

Keep in mind ... with credit cards ... it is VERY easy to get trapped in a never-ending cycle of debt.

And it matters little whether we are talking credit cards for personal use ... or for business.

The biggest problem with credit cards ... from a "business use" standpoint ... is its potential impact on discipline.

Small business owners go out an buy a $2000.00 photocopier ... fancy office furniture ... hire a secretary ... etc. etc. ... assuring themselves that is "okay" ... because the credit is being run up "for business" ... and that the "future" profits will take care of everything.

The end result ...? Well ... I don't have to explain how that story typically turns out ... do I ...?

It is no different than walking into a casino with a fat line of credit ... and a bottle of booze in your hand.

Rolling the dice.

Nothing wrong with small line credit if you are paying it off every month ... but keep it small.

This will force you to become resourceful ... lean and mean ... which is really what you need to be starting out.

Then ... when you have perfected your business model ... and discerned a winning formula ... and want to ramp it up with a line of credit ... fine.

In other words ... it is okay to build credit ... but do not rely on it.

As I often tell my bankruptcy clients ... stop fussing about your credit and live within your means.

Paying today's bills ... with what you "hope" will be tomorrow's income ... is a recipe for disaster.

 

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[socaldude]

If you have zero credit or terrible credit then the only way to get credit is to get a secured credit card. You send a deposit and you get a credit line equal to your deposit. You charge small necessary expenses and pay it off every month.

I would recommend a secured credit card at a bank like Bank of America or Wells Fargo so you can qualify for their other cards more easily.

But be careful because credit if used recklessly can be a terrible thing. Wage garnishments, court judgments, seized bank accounts, harassing phone calls and bankruptcy. You never wanna owe more than you can pay off entirely. As soon as you start sending just minimum payments then you fell for the trap and you are in trouble. Credit cards are a very lucrative business because of this irresponsible consumerism. Hell I wish I owned a credit card company/bank. Credit should never be used to fuel a lifestyle. I would stay away from car loans and mortgages if you are young. These have liens and you don't own the property. The loans are for a long time and if you miss just a few payments then you struck out.

Keep expenses low and FIXED expenses low as well.

Credit is great, but let me tell ya, theres nothing like owning a car free and clear and having ZERO debt.

Even though I have credit, I still have the habit of paying things for cash. CASH has an element of control and independence that is FASTLANE. If you owe money to someone else you are at their disposal. Opps looks like you lost your job and now you can't pay back your $10k credit card balance. Oops looks like they raised your interest rates. Opps looks like they decreased your credit line by 50%. Oops looks like American Express all of a sudden demanded payment in full right away. Opps looks like the real estate market crashed. Oops looks like you lost you main source of income.

But yeah credit can be very useful to a fastlane journey. I use my AMEX plum card to charge business expenses and meet discrepancies in cash flow.

Also you never do business with just ANY bank. Just because its a bank doesn't mean you should do business with it. The same way I never do business with paypal.

 

[theag]

I searched building credit and a couple other similar queries, I probably just typed the wrong thing. Anyway, thanks for you help!

Google is better than the built in forum search: https://www.google.com/?gws_rd=ssl#q=site:thefastlaneforum.com+build+credit

 

[Coalission]

Your method and @theag method contradict. Does this mean both should work?

I can tell you from my experience, @theag method worked for me. I filed bankruptcy back in 2010, and tried doing the conservative way of keeping balances low, etc. I'd get accounts, but they would stay at low limits and whenever I would call them I felt like a peasant asking for scraps. When I started being aggressive, putting everything on credit (rent, utilities, etc.) making payments every week, and basically running the balance up and paying it down, I was able to push a little $500 creditbuilder Capital One to a $30,000 Venture card with 2x miles per dollar (gradually over the course of a couple years maybe), which I usually wouldn't be qualified for because of the bankruptcy on my record. Then they approved me for the Spark Business, then I started getting credit lines with ad networks, etc. All of this with a bankruptcy on my record that according to society is supposed to demolish my credit forever.

Be aggressive, show that you actually use the credit you have and how you need more, and don't be afraid to pick up the phone and call the company's executive office to give them an earful if they keep you on baby limits. Don't waste their time spending $49.72 a month on a credit card wondering why they haven't raised your limit to $10,000 yet.

Once you brute-force a card into those higher limits, other card companies will follow suit, it will give you the ability to spend more on business expenses too, and then you'll start nailing those big Net 30 or Net 55 LOC's.

 

[Bila]

One tip to build a good score : ask for limit increase after 3-6 months but DONT spend it and keep asking increases .... Your ratio will be very low = good credit

 

[Zachariah Lange]

Try to maintain 30% max on your limit. Figure out when your card company reports to the Bureaus and have 10-30% charged, then pay it off before you are charged interest.

Maxing it out looks like you are "living" off your credit. 10-30 is the goldilocks zone that shows you responsibly maintain your credit line.

 

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[Damage Inc.]

I would recommend that you start off with a low limit and get a card with cash back rewards if you can qualify for one (like the Capital One Quick Silver Mastercard). Don't change your spending habits, and if you are at all concerned with your self control then just use it for the everyday essentials that you won't overspend on (such as gas, groceries, car insurance, etc.). Pay it off in full every month, and ask for increases as has been mentioned. If you sense that you're overspending or find yourself unable to pay it off one month - then stop. As far as the "how much you use ratio", there is no hard and fast rule for that - the calculations are complex but in general a lower utilization will show a better score from what I understand. This can also be manipulated to a degree by paying down your card to a low balance like $10 right before your credit is run. Doing that will leverage your borrowing power and increase your score.

If you can manage to get a cash back card and pay it off in full every month, you'll not only build credit but you'll come out profitable. You'll never pay a penny in interest, and you'll get checks written to you for a percentage (1-1.5%) of everything you've spent on the card (which ideally is money you were already spending anyway). As long as you've got the self control, it's a winning proposition.

 

[Glorydog]

Greetings fellow Fastlaners! If you read my introduction a while back, you know that I am 18 years old and come from a sidewalk family. My family recently filed taxes, and I was appalled to find that my parent's combined income was $33,000 this year. They don't even have bank accounts, for crying out loud! I love them, but I don't see myself ever taking financial advice from them. So, I find myself here.

I want to know how you personally built up your credit, or how you wish you did. I've scoured the internet, searching for methods, and they all say the same, boring stuff. That's when it occurred to me: I need to ask you guys! People who are actually successful.

So, let us know:
How are you/did you build up your credit score?
How do you wish you built your credit score in hindsight?

 

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[theag]

There are a few threads on here about this, search around.

Basically the idea is to get a credit card, use it as much as possible and pay it off every month. Then ask for limit increases regularly, spend more, and still pay off every month.

 

[Zachariah Lange]

1)Establish credit. ..until you have a line of credit like a credit card, or an installment loan you have nothing to build.
2) DON'T MISS PAYMENTS. ..that can destroy your rating, and it is one of the harder mistakes to remedy.
3) get credit line increases, it gives your score a good bump.

Maintain what credit you have, and build it.

 

[Durete]

They made 16k and 17k each, respectively. Considering they're financing a 2006 Mustang for wayyyyy more than its value, (They're paying $17,000 for it!) our rent is $1,200 per month, etc. All against my advice, we're always left dead broke, no emergency fund or anything. Their philosophy is they like to live beyond our means for my brother and I to have a better life and the like.

So a good heart, but not too smart.
Can't blame them though for wanting the best for you two, they just don't know how.

Imagine having to find that out without having internet available at the time before life just "happened" to them.

I've tried convincing them to move to an apartment or cheaper house, which would help our family live more comfortably, but they're set in their ways lol! I'm not sure where you live, but here in America, bank accounts are 100% protected and actually more safe than carrying cash. However, I'm not sure why they don't at least set up a checking account. Possibly because my dad had a hot check incident in his younger days.

Good luck to any kid that tries to convince his/her parents...that's a hard cookie to crack.

anyways, in America that bank accounts are 100% protected, is total nonsense. You are protected, UNLESS: [insert thousand little rules and exceptions]
In my country you are protected for a certain amount, let's say $100.000 per bank account, but anything over that is just not protected at all.
Also if you get robbed on the street and they force you to empty your bank account. you're the one that gave them the information, so no, you took the money out, not them.

While if you have cash with you, and you're not that stupid that you put the paper bills in your wallet, then you're a lot safer than carrying a bank or credit card, as they can actually scan your cards without you even knowing. (especially in europe you got some big gangs going on that actually get trained at universities in Romania and the like to perform debit and credit card frauds, and 99% of the time it's the customer paying it, not the banks, and even if the banks end up paying it it will take months, if not years to get your money back.) And in the US it is no different, as it looks to the credit card/bank that you took the money, and not a thief.

As for other safety: I got robbed a few times in my younger life. having my money in bills has saved me each and every time. ending up giving them not more than $5 per time that I got robbed, while I had my phone, and at least $100 in my pocket each time.

Anyways, unless you want to pay your bills online or want to buy things online, there is no real reason to have a checking account.
A business: yes needs a bank account, a person: Nope, unless you're selling or buying things online. (and selling things online is illegal anyway as a person. as you should set up a business if you sell a lot of things online. unless you declare these sales to the taxes.)

 

[Mr3Thirty5]

All of the advice I've read above are all great! I like to take advantage of cards that have rewards, but this takes a lot of discipline and control. Instead of using your debit card, use the credit card that has the best rewards (cash back, frequent flyer, gift cards, etc...). Everytime you make a purchase with the credit card, set aside cash to pay for that purchase (payoff by end of month). Like I said, this takes a lot of self control. I've been doing this for 3 years now. Racked up about $2,500 in rewards for buying things with my credit card, which I would be doing with cash/debit anyway. I also got 2 credit line increases a year without having to ask for it.

 

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[Mattie]

In my case I learned don't have credit cards or loans period. Why? Even if you have intentions to pay for things every month, if you're married, or living with someone, they always have an agenda and motivation different then yours. Life happens, and big lesson learned, if you don't have the money to begin with, don't buy it, and don't spend it. You can have the best intentions in the world, and you can believe everything will work out. It doesn't always happen that way, when other people are involved in your affairs. Whether it's a job that some one has control over whether you work or not, a partner that is deceptive and hide things, or family members controlling your situation, giving someone else the upper hand in any case scenario, pretty much leaves a whole in your wall of financial protection.

If you own your own business perhaps you have the upper hand and know whether you can pay every month.

 

[Glorydog]

In my case I learned don't have credit cards or loans period. Why? Even if you have intentions to pay for things every month, if you're married, or living with someone, they always have an agenda and motivation different then yours. Life happens, and big lesson learned, if you don't have the money to begin with, don't buy it, and don't spend it. You can have the best intentions in the world, and you can believe everything will work out. It doesn't always happen that way, when other people are involved in your affairs. Whether it's a job that some one has control over whether you work or not, a partner that is deceptive and hide things, or family members controlling your situation, giving someone else the upper hand in any case scenario, pretty much leaves a whole in your wall of financial protection.

If you own your own business perhaps you have the upper hand and know whether you can pay every month.

Not to say you're wrong, but I feel obliged to argue that most people do not have $250,000 (Pretty common for homes in my area, at least) laying around to buy a home. Renting is for those who don't know where they want to be for the rest of their lives, and don't want to be tied down, or it is for the poor and/or people with no credit. But that is my opinion. I feel that if you are going to pay on something every month, it may as well be your own property, not someone else's.

 

[Mattie]

$250,000 (Pretty common for homes in my area, at least) laying around to buy a home.

Exactly, no one has $250,000 dollars laying around. I lived in a good area. When the recession hit, lots of homes went in foreclosure. Small Businesses disappeared, and like I said, No guarantee you'll have a job. Unless you had a business that was thriving to begin with and had all your ducks in a row, and had the Fast lane philosophy to begin with, you don't have a guarantee. It's out of your hands when jobs move out, small businesses, and you have to work three part-time jobs to pay your mortgage. It's the way of the world to take out loans and have credit cards.

Loans and credit cards are not your security. And put in people that make the wrong choices in your life, and if you're still in the matrix thinking, you're just burying yourself in debt. Credit cards and loans are a lost cause, and most people don't have a clue about investments or how to handle debt, or finances. Loans and credit cards put money in Bankers hands. Not yours. They're not concerned whether you make your payments every month.

You can rent a place for a period of time, save your money and use it to create your own business. You have less expenses at times. Unless you're to concerned about whether people will think you're poor. You're assuming wealthy people don't rent apartments, or live in them. Sure, people that sell houses make a profit in Fast lane if they know what they're doing.

We believe a house is a good investment. Perhaps depending on geographical location, what your business is, and whether you have money to keep up payments. Suppose you were injured for some reason, run out of your emergency fund, three late payments or less, you're house is up for auction within a year, and then it's gone if you don't find the money fast enough to recover it. And once it is auctioned off, you may be told that it's not worth someone investing in it to try to save it, because it's a loss for them.

Same thing if you lose your business, job, or like I said, you have a husband or wife that lies they're making payments and they're not. Maybe you have co-signers or people invested in your property that do the same, say they're making the payments, and for some odd reason they're agenda and motivation is to be rid of you.

There's no way to guarantee you're life will be free of losses or failures, or making wrong choices. Life is a gamble with many risks. Not saying, people don't invest in houses, or property. Sure, you can, Donald Trump did so. I believe he had some failures along the way as well. I suppose it's just the roll of the dice and whether it's in your favor at the time.

 

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[Damage Inc.]

This is really helpful, material advice. I bank with Arvest (The biggest bank in my area) should I speak with them about getting a credit card, or should I look at external sources?

You can talk to them and see what they have to offer, and compare to other cards by checking online. Personally, I just go for the highest cash back percentage regardless of what the interest rate is (since I never pay interest anyway). And I'd stick with Visa or MasterCard, and avoid anything with fees. You can do google searches for "best credit cards 2014" or "highest cash back cards 2015" and get an idea of what's out there. Some of the review sites will also give you an idea of which cards you are more likely to qualify for.

 

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[Damage Inc.]

You're welcome, I think you've got it down. If you want to build up a higher limit you do have to spend money on the card, like @Coalission says nobody is going to raise you from $1,000 to $2,000 if you're putting $40 on the card per month. For starters though, I'd just keep it simple and start out slowly.

 

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[Glorydog]

Exactly, that's the key, do the charging on the card with money you have. Anything you'd usually pay cash or write a check for, do it with the card, and then pay it off. Rinse and repeat.

Like others have mentioned, debt to credit ratio is a real thing, but they usually report after the statement cycle ends, so since you'll be paying often, your balance will be reported low, even though you had high balances mid-cycle.

This make me wonder if I can use the card to bootstrap on Craigslist like I already do. Not sure if it's even possible, but can I withdraw the cash on a cheap iPhone 5s, sell it the same day, and put the money back to pay the bill at the end of the month? Or would you recommend against that, as I can see that potentially being a bad idea

 

[Damage Inc.]

This make me wonder if I can use the card to bootstrap on Craigslist like I already do. Not sure if it's even possible, but can I withdraw the cash on a cheap iPhone 5s, sell it the same day, and put the money back to pay the bill at the end of the month? Or would you recommend against that, as I can see that potentially being a bad idea

I flip things on eBay like this. As long as you can re-sell it within a month (edit: before your statement end and bill is due) you're never out of pocket. Extra working capital. Just don't get in over your head.

 

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[Damage Inc.]

Sure.

 

[Durete]

Credit score? I probably don't have any
Credit cards are an outdated and unsafe way of paying.

More secure internet/debit banking options such as Ideal are the future.


Just on a sideline: $33.000 is still above average, I probably work more hours than both your parents combined and I get paid around $16.000 a year.(Including me having most likely more hours work experience.)
Anyways, if $33.000 is what they need to pay for their requirements and a little bit extra it is enough.

About bank accounts: I get paid in cash, so why would I want a bank account, which could only be hacked.
And I'm not smart enough to actually make any sort of profit with investing, so that's not a realistic option anyways. so no need for a bank account.
The only bank account I'll ever get is to set up my business, and once money is in get it "offline" as quick as possible, unless I need that money to buy stuff/invest in services to expand my business.

 

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[Glorydog]

There are a few threads on here about this, search around.

Basically the idea is to get a credit card, use it as much as possible and pay it off every month. Then ask for limit increases regularly, spend more, and still pay off every month.

I searched building credit and a couple other similar queries, I probably just typed the wrong thing. Anyway, thanks for you help!

One tip to build a good score : ask for limit increase after 3-6 months but DONT spend it and keep asking increases .... Your ratio will be very low = good credit

Your method and @theag method contradict. Does this mean both should work?

Credit score? I probably don't have any
Credit cards are an outdated and unsafe way of paying.

More secure internet/debit banking options such as Ideal are the future.


Just on a sideline: $33.000 is still above average, I probably work more hours than both your parents combined and I get paid around $16.000 a year.(Including me having most likely more hours work experience.)
Anyways, if $33.000 is what they need to pay for their requirements and a little bit extra it is enough.


About bank accounts: I get paid in cash, so why would I want a bank account, which could only be hacked.
And I'm not smart enough to actually make any sort of profit with investing, so that's not a realistic option anyways. so no need for a bank account.
The only bank account I'll ever get is to set up my business, and once money is in get it "offline" as quick as possible, unless I need that money to buy stuff/invest in services to expand my business.

They made 16k and 17k each, respectively. Considering they're financing a 2006 Mustang for wayyyyy more than its value, (They're paying $17,000 for it!) our rent is $1,200 per month, etc. All against my advice, we're always left dead broke, no emergency fund or anything. Their philosophy is they like to live beyond our means for my brother and I to have a better life and the like. I've tried convincing them to move to an apartment or cheaper house, which would help our family live more comfortably, but they're set in their ways lol! I'm not sure where you live, but here in America, bank accounts are 100% protected and actually more safe than carrying cash. However, I'm not sure why they don't at least set up a checking account. Possibly because my dad had a hot check incident in his younger days.

1)Establish credit. ..until you have a line of credit like a credit card, or an installment loan you have nothing to build.
2) DON'T MISS PAYMENTS. ..that can destroy your rating, and it is one of the harder mistakes to remedy.
3) get credit line increases, it gives your score a good bump.

Maintain what credit you have, and build it.

I like this idea, but I wonder would it be wise to spend most of the limit, and pay the bill almost immediately? Like I have 2,500 in my wallet and I spend 2,000 on the card just for the credit, and when I get home I either set the money aside or send it in.


Thank you all for you your responses, I'm sure many will continue to benefit from this thread.

 

[100k]

Watch this guy's video series:

There are a total of 6 videos in total (two of them are about building credit I believe).

 

[Glorydog]

Watch this guy's video series:

There are a total of 6 videos in total (two of them are about building credit I believe).

I'll check them out when I get home! Thanks

 

[Zachariah Lange]

Exactly, no one has $250,000 dollars laying around. I lived in a good area. When the recession hit, lots of homes went in foreclosure. Small Businesses disappeared, and like I said, No guarantee you'll have a job. Unless you had a business that was thriving to begin with and had all your ducks in a row, and had the Fast lane philosophy to begin with, you don't have a guarantee. It's out of your hands when jobs move out, small businesses, and you have to work three part-time jobs to pay your mortgage. It's the way of the world to take out loans and have credit cards.

Loans and credit cards are not your security. And put in people that make the wrong choices in your life, and if you're still in the matrix thinking, you're just burying yourself in debt. Credit cards and loans are a lost cause, and most people don't have a clue about investments or how to handle debt, or finances. Loans and credit cards put money in Bankers hands. Not yours. They're not concerned whether you make your payments every month.

You can rent a place for a period of time, save your money and use it to create your own business. You have less expenses at times. Unless you're to concerned about whether people will think you're poor. You're assuming wealthy people don't rent apartments, or live in them. Sure, people that sell houses make a profit in Fast lane if they know what they're doing.

We believe a house is a good investment. Perhaps depending on geographical location, what your business is, and whether you have money to keep up payments. Suppose you were injured for some reason, run out of your emergency fund, three late payments or less, you're house is up for auction within a year, and then it's gone if you don't find the money fast enough to recover it. And once it is auctioned off, you may be told that it's not worth someone investing in it to try to save it, because it's a loss for them.

Same thing if you lose your business, job, or like I said, you have a husband or wife that lies they're making payments and they're not. Maybe you have co-signers or people invested in your property that do the same, say they're making the payments, and for some odd reason they're agenda and motivation is to be rid of you.

There's no way to guarantee you're life will be free of losses or failures, or making wrong choices. Life is a gamble with many risks. Not saying, people don't invest in houses, or property. Sure, you can, Donald Trump did so. I believe he had some failures along the way as well. I suppose it's just the roll of the dice and whether it's in your favor at the time.

Paying cash for everything is great and should always be the first option. The OP was asking how to build credit, and paying cash for everything does not reach that goal. Using credit is just like any other investment, there is always risk involved. If you go the cash route and never establish a real line of credit, you may miss an investment opportunity that exceeds your cash buying power. Upon weighing the risks most people are willing to take that risk on things like cars and homes, sometimes it works out and sometimes it does not. If you someone is looking to use there credit line to buy a hot tub...well, then I would venture to guess they need a better handle on how to manage there credit.

 

[Mattie]

you may miss an investment opportunity that exceeds your cash buying power

You can also miss a whole lot of investment opportunities because you made all the wrong choices and investments. Nothing wrong with telling an 18 year old kid that is from side walk there's both sides of the coin.

 

[Zachariah Lange]

You can also miss a whole lot of investment opportunities because you made all the wrong choices and investments. Nothing wrong with telling an 18 year old kid that is from side walk there's both sides of the coin.

I completely agree, I was more-so saying credit isn't something you should ignore. It is something that should rarely be used, but more importantly should be maintained so you have credit available when you may need it.

If you get in debt over your head, then any "credit building" you may have planned is negated and you will have been better off without credit.

 

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[Glorydog]

Exactly, no one has $250,000 dollars laying around. I lived in a good area. When the recession hit, lots of homes went in foreclosure. Small Businesses disappeared, and like I said, No guarantee you'll have a job. Unless you had a business that was thriving to begin with and had all your ducks in a row, and had the Fast lane philosophy to begin with, you don't have a guarantee. It's out of your hands when jobs move out, small businesses, and you have to work three part-time jobs to pay your mortgage. It's the way of the world to take out loans and have credit cards.

Loans and credit cards are not your security. And put in people that make the wrong choices in your life, and if you're still in the matrix thinking, you're just burying yourself in debt. Credit cards and loans are a lost cause, and most people don't have a clue about investments or how to handle debt, or finances. Loans and credit cards put money in Bankers hands. Not yours. They're not concerned whether you make your payments every month.

You can rent a place for a period of time, save your money and use it to create your own business. You have less expenses at times. Unless you're to concerned about whether people will think you're poor. You're assuming wealthy people don't rent apartments, or live in them. Sure, people that sell houses make a profit in Fast lane if they know what they're doing.

We believe a house is a good investment. Perhaps depending on geographical location, what your business is, and whether you have money to keep up payments. Suppose you were injured for some reason, run out of your emergency fund, three late payments or less, you're house is up for auction within a year, and then it's gone if you don't find the money fast enough to recover it. And once it is auctioned off, you may be told that it's not worth someone investing in it to try to save it, because it's a loss for them.

Same thing if you lose your business, job, or like I said, you have a husband or wife that lies they're making payments and they're not. Maybe you have co-signers or people invested in your property that do the same, say they're making the payments, and for some odd reason they're agenda and motivation is to be rid of you.

There's no way to guarantee you're life will be free of losses or failures, or making wrong choices. Life is a gamble with many risks. Not saying, people don't invest in houses, or property. Sure, you can, Donald Trump did so. I believe he had some failures along the way as well. I suppose it's just the roll of the dice and whether it's in your favor at the time.

You do have a lot of good points. When I am fresh out of college, or if I choose to live off campus after my Freshman year, I plan to rent a furnished apartment. This way I am not tied down by anything other than a lease. I like your objectionable stance toward the issue, many people are not able to understand both sides of the coin because they feel that their side is the best no matter what. It sort of sounds like you are speaking from experience, if you have any you'd like to share with me, no matter what it is, I'd love to hear it. Thanks a lot for your responses.

I would recommend that you start off with a low limit and get a card with cash back rewards if you can qualify for one (like the Capital One Quick Silver Mastercard). Don't change your spending habits, and if you are at all concerned with your self control then just use it for the everyday essentials that you won't overspend on (such as gas, groceries, car insurance, etc.). Pay it off in full every month, and ask for increases as has been mentioned. If you sense that you're overspending or find yourself unable to pay it off one month - then stop. As far as the "how much you use ratio", there is no hard and fast rule for that - the calculations are complex but in general a lower utilization will show a better score from what I understand. This can also be manipulated to a degree by paying down your card to a low balance like $10 right before your credit is run. Doing that will leverage your borrowing power and increase your score.

If you can manage to get a cash back card and pay it off in full every month, you'll not only build credit but you'll come out profitable. You'll never pay a penny in interest, and you'll get checks written to you for a percentage (1-1.5%) of everything you've spent on the card (which ideally is money you were already spending anyway). As long as you've got the self control, it's a winning proposition.

This is really helpful, material advice. I bank with Arvest (The biggest bank in my area) should I speak with them about getting a credit card, or should I look at external sources?

 

[Glorydog]

I can tell you from my experience, @theag method worked for me. I filed bankruptcy back in 2010, and tried doing the conservative way of keeping balances low, etc. I'd get accounts, but they would stay at low limits and whenever I would call them I felt like a peasant asking for scraps. When I started being aggressive, putting everything on credit (rent, utilities, etc.) making payments every week, and basically running the balance up and paying it down, I was able to push a little $500 creditbuilder Capital One to a $30,000 Venture card with 2x miles per dollar (gradually over the course of a couple years maybe), which I usually wouldn't be qualified for because of the bankruptcy on my record. Then they approved me for the Spark Business, then I started getting credit lines with ad networks, etc. All of this with a bankruptcy on my record that according to society is supposed to demolish my credit forever.

Be aggressive, show that you actually use the credit you have and how you need more, and don't be afraid to pick up the phone and call the company's executive office to give them an earful if they keep you on baby limits. Don't waste their time spending $49.72 a month on a credit card wondering why they haven't raised your limit to $10,000 yet.

Once you brute-force a card into those higher limits, other card companies will follow suit, it will give you the ability to spend more on business expenses too, and then you'll start nailing those big Net 30 or Net 55 LOC's.

Thank you for the advice! So, what I've gathered so far throughout this thread is this: Don't spend money you don't have on the credit card, but be sure to actually SPEND money. I need to push the limits (when I can) and try to get my limits raised so that my credit looks better. Am I getting this all down correctly?

You can talk to them and see what they have to offer, and compare to other cards by checking online. Personally, I just go for the highest cash back percentage regardless of what the interest rate is (since I never pay interest anyway). And I'd stick with Visa or MasterCard, and avoid anything with fees. You can do google searches for "best credit cards 2014" or "highest cash back cards 2015" and get an idea of what's out there. Some of the review sites will also give you an idea of which cards you are more likely to qualify for.

Thank you, I'll be looking around. I'll try to make a decision by the end of next week at the latest.

 

[Coalission]

Thank you for the advice! So, what I've gathered so far throughout this thread is this: Don't spend money you don't have on the credit card, but be sure to actually SPEND money. I need to push the limits (when I can) and try to get my limits raised so that my credit looks better. Am I getting this all down correctly?

Exactly, that's the key, do the charging on the card with money you have. Anything you'd usually pay cash or write a check for, do it with the card, and then pay it off. Rinse and repeat.

Like others have mentioned, debt to credit ratio is a real thing, but they usually report after the statement cycle ends, so since you'll be paying often, your balance will be reported low, even though you had high balances mid-cycle.