I'm 18 years old: no credit, how can a bulid up good credit?

I'm getting a cell phone bill in my name and have considered a credit card---the basic rule being that I only spend what I can afford, I had a credit card in the past (in my grandfathers name, but it was mine) and I practiced a lot of self control, so I think that would be a good way...but I'm not sure....what is a good way to build up good credit when you have no credit?

To work this plan you need at least $400 to begin. You should borrow this from your friends if necessary. Then go to a bank of your choice and deposit the $400 into a regular passbook savings account.

Wait a few days for the account to be posted and return to the bank to ask for a $400 loan - you offer the passbook as collateral. Since the bank is already holding your $400, you go to another bank open a savings account lending you another $400 and they won't even make a credit check. Then, with your borrowed $400, you go to another bank, open a savings account, return a few days later, borrow $400 from that bank using your passbook as collateral.

Then repeat the process at a third bank with your borrowed $400. Wait a few days to go to a fourth bank where you open this time a CHECKING account. Wait a few days and make a payment on each of the other three loans. A week later, make payments again on the three loans, and continue paying each week until you have almost paid off the balance.

A credit investigation at this point will show you with three active bank loans (which are considered hard to get), a checking account, and a paying history for the three bank loans - with you having paid up in advance. Thus, you have AAA credit in as little as 30 days. From here you go on to apply for loans, credit cards, and other items on credit.

There are considerable risks with credit -- before you read further, I have to ask you to consider cash. In general, borrowing is stupid -- if you don't have the cash now, you probably won't have it later. And borrowed money costs more. The stupidest possible use of credit is to buy an engagement ring with a revolving credit card and pay it off a few bucks a month. If I were a woman being courted, I'd demand to see the cash receipt for this symbol of financial security.

On the other hand, if you ever want to buy a home -- unless you have quite a lot of cash or very modest goals -- you will need to borrow to finance that big purchase. If you've never borrowed money before, this will cost you quite a bit in the long run. Getting good terms on your first mortgage is the best reason to build credit.

So, assuming you know what you're doing and are willing to do it, here goes:

* Get a major credit card -- Visa or MasterCard. If you've never had credit, no problem; you can probably get a low limit card anyway. If you run into trouble, walk into your bank and ask for a secured card. That is, you deposit, say, $500 cash and get a card with a $500 limit. The bank risks nothing at all.

* Charge something. Credit is no good if you don't use it. Buy something (a) that will last at least a year and (b) something you can afford to pay for in cash.

* Make your payments absolutely on time. Although in general, it's always best to pay off your balance in full each month, if you do this, you'll need to charge something else. You must show a payment on the card every month, one way or another.

* After about 6 months of steady payments, apply for another card. Do the same thing: charge a little on it and pay every month -- on time, without fail. Look for cards with no annual fee and low interest rates. If you cycle a lot of money through your cards (by charging everything and paying the balance in full each month), be sure to get cards with good rewards systems.

* Repeat. Three cards is about right; more looks bad. Don't carry big balances; a couple hundred spread over all 3 cards is fine. The important thing is that you invariably pay each and every month, well before the due date. Make it a habit to pay as soon as you get the bill, not later.

* Note when you first take out any given credit card. Every 6 months, ask the bank to increase your limit. If you've paid on time without fail, you'll almost certainly get an increase. Don't *use* the increase; just get it.

* Remember *never* to charge anything you can't afford to buy for cash. You may want to save the full cost of anything you charge -- put it away in a seperate account if you like -- so you know you'll have cash to pay your bills. Remember that all your efforts are wasted if you pay late.

* When you've established a decent credit record on cards, buy something else on credit. You might consider a store credit card, like Sears. Such cards -- since they can only be used at that one kind of store -- usually carry highly favorable terms. This is the time to buy a big-ticket item, like a refrigerator or stereo. Again, though, don't buy more than you can actually afford.

* Meanwhile, you have been saving cash -- cash money in a savings account, perhaps money market. It's just as important for you to make your regular savings deposit as to pay your bills. These are your first obligations -- you pay them right off the top of your paycheck, before the rent, certainly before gas and food. Experts all have different savings targets but you should try for something like 10% of gross income or 15% of net. Savings not only let you consider future goals; they also provide a cushion against the unexpected -- like getting fired and having to pay bills while looking for a new job.

* Next, buy a car. Remember that half the value of a new car is in the newness -- and as soon as you drive it home, it's not new. A good value in a car is about 5 years old. Even so, don't forget that its value is constantly dropping. A car is *not* an investment. However, you will borrow several thousand dollars -- and, of course, make your payments strictly on time. You continue to build up your credit rating.

* Right about now, it may be wise to *cancel* one of your cards -- whichever has the poorest terms. Lenders don't like to see that you have too much open credit. You've been getting regular limit increases so even two cards will allow you much more credit than 3 or 4 did back when.

* It should go without saying that if you're serious about building up your credit, you want to see how you're doing. Read over your bills each month and look for things *you* didn't charge. Get a copy of your credit report from all 3 agencies (about every 6 months) and check it over. Contest any wrong entries and for all the gods' sake, watch out for identity theft. Don't give anybody your cards or your numbers; refrain from handing your card to clerks but instead swipe it yourself through scanners. Buying on the Net, enroll in a program in which your bank issues you a series of "fake" one-time numbers that can't be reused (fraudulently or otherwise). Avoid telling anyone your birthdate, social security or driver's license numbers, or other highly personal info.

* Finally, it's time to buy a home. You have a good down payment saved in the bank and an excellent credit rating. Depending on the area where you live, you may have to settle for a condo. Do *not* get sucked into paying too much for a home -- in some parts of the country, home prices are grossly inflated and you cannot afford to pay a mortgage if the bubble bursts. Don't buy more home than you could consider renting.

* Don't forget that even if you took out a 30-year mortgage, you are not going to live in the same house for 30 years. Maybe your dad did but those times are gone. Don't throw money into your home. Very few home improvements add profitable value to the sale price, oddly enough. Do some research on this. In any case, try to imagine that you are only temporarily living in the house -- don't do anything to it that won't increase its value. White is a good color for kitchens; orange and avacado are not, no matter how much you like them.

* About five years into your first home -- and, of course, with five more years of savings in the bank -- it's time to flip it. Go looking for the income property. You will still live in it but you want something with about 4 units. More is bad; you don't have the experience to manage a large building. Duplexes are tricky; if your tenant moves, you have to pay the entire nut while looking for another. Remember the danger in being a landlord: You can get stuck with a non-paying tenant for several months. (It's cheaper to hire a lawyer than to pay rent and landlord-tenant law favors the tenant.) Choose your tenants carefully. Don't forget to keep a business reserve in cash to handle building costs, such as plumbing upkeep or a new roof.

Many people stop here and from this point on, it's not really about building credit anyway; it's about managing and investing in real estate. Certainly, this is the one certain way to become wealthy. The great thing about real estate is that they're not making any more of it -- and that will be true for a long time.

One more time -- so you should never forget: Credit is not a free ride of any kind. Credit cards are passports to Hell. If you can live your life entirely without credit, do so. Realistically, in these times, credit is the only way for most people to buy their way out from under the landlord -- and become landlords themselves.

Try not to be a jerk when you're on the other side, okay?

a credit card is a good idea but you have to be really carefull not to get yourself in debt.
TRUST ME!

Keep using your credit card and paying off the bill and your credit will improve. Get the best cash back card you can find (1-5% cash back depending on the transaction) and let your score keep going up :)

get one credit card like orchard bank with a low limit and pay if off each month

no credit card, just a charge card. (i.e) American Express. You won't get into debt if you pay it off each month and it will help curb spending habits. =)

Credit scores vary throughout your life based on your credit usage (no credit usage = low credit rating), on-time payments (on-time payments improve your rating), income to debt ratio (high debt = lower score), your income (higher income improves your score) and other factors such as employment stability (longer duration of employment = better credit).

~ Good luck ~

well its ok to have 1 or 2 credit cards because alot of credit cards like 10-20-30 can really sink someone into debt crisis and financial crisis.i think you can get good credit is pay the debt off the credit card. but you would need a job to pay off the debt and i think you can have a financial consultant analyze your credit score. or you can get a credit report.

Credit history, credit score, credit report-- these words will greet you sooner or later when you apply for a loan, mortgage, rent an apartment, apply for a job, or last but not the least apply for a credit card. Efforts towards building a good credit history should begin early, right from the student life. Ironically most of the students are not aware what is needed to build a credit history. At: http://www.credit-card-gallery.com/article/234,Start_building_positive_credit_history_in_3_simple_steps we look at three simple steps that can get you a jumpstart towards good credit history.

Do like I do: have a credit card, use it, and never carry a balance from month to month. Basically, treat it the way you would a debit card (you would never want to withdraw more than you could afford to on your debit, so don't charge more on credit than you can afford to pay off right away). It sounds like you are pretty responsible, and your bank may have a decent student banking package including your credit card, debit, and account all in one with low fees. If you do any online banking this arrangement makes it easy to pay your credit card bills before the bill even comes in the mail (sometimes I pay off my bill before the charge even shows up). Stay consistant and never carry a debt unless it is essential (like college book costs or something). And remember to be really careful with sensitive information, because identity theft can permanently destroy your credit.

If you used your grandfather's credit card, you should've been added as an authorized user which would've probably given you a great head start towards building credit. Actually, it's possible to still be added so that it can report on your credit. Aside from that, the best way to build credit is to apply for a student credit card or a secured credit card either through where you do you banking or at the places that I posted links to below. You would have to put a security deposit upfront that's linked to a savings account to get the same amount in a line of credit. You can also increase the credit line by adding to this deposit which will look better on your credit in the long run because it shows that you're responsible with higher limits. Keep the balance manageable and pay on time so that you'll get the deposit back after a year and the card will convert to a regular card.
Finally, you can sign up with PRBC (http://prbc.com) They're a new credit bureau that reports recurring monthly payments like rent, insurance, cellular phone, utilities, etc. that doesn't show on your regular credit reports to help build credit.

get a card use it a couple times....pay the bill off like 3-4 months in a row then cut it up and throw it away...you'll get preapprovals like crazy

Building up good credit takes time. Start small...get a credit card with a low limit ($500 or so) and then use it sparingly. Take out a small loan for something you had money in the bank to pay for anyway....just so you can pay off the loan early. It may sound silly, but that's just the kind of thing that looks good on a credit report and it's super easy to do. Be extra careful with that credit card, never buy more than you can pay off in one to two months. They will continue to raise your spending limit, but this is just a trap for the unwary. Continue to use the credit card in the same manner no matter how high the make the limit.

Also, manage your checking account very closely. I have actually known people who believed that as long as they had checks in the check book then they must still have money. Yeah, I know, I shook my head too. Anyway, make sure you keep your money in a bank that offers overdraft protection of some kind. This means that even if you mess up and write a check you cant cover from the checking account, the bank will automatically transfer money from savings to cover the difference (there may be a small charge for this, but it's better than bouncing checks!).

Best of luck to you!

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