Building Credit, and I doing it right or wrong?
Nov 1st 2018, 11:50 pm
#31
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Re: Building Credit, and I doing it right or wrong?
My mortgage was manually underwritten and didn't need a credit score.
Nov 2nd 2018, 11:41 am
#32
Often not so civil...
Joined: Apr 2010
Location: The Boonies, GA
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Re: Building Credit, and I doing it right or wrong?
Perhaps I dismiss it, but he is after all trying to make a living, and payments from that network are a large share of what earns him money. He;s hardly an altruist. You just have to apply common sense to his points, they do not all apply to everyone in every situation.
Nov 2nd 2018, 3:15 pm
#33
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Re: Building Credit, and I doing it right or wrong?
As I say I pretty much before only used my credit card for online purchases, but with them being less than a hundred a month my credit score would never go up.
It's a lovely idea, and wonderful if it can work for you. I lived debt-free in the UK (aside for student loans). But my husband and I, for example, are not in any position to be able to afford to buy a car outright, no matter their price, and I've struggled to get by without one. We live seven miles from the city where I work, and the public transport is diabolical. So, if I have any hope of being independent where we live, I'll need to finance a car, and I feel lucky to have that option available to me. The credit card I have was a necessity in order to start a credit history so that, one day, I could finance a car. My point is that for some of us - and I appreciate there is some irony in this - living without accumulating any debt is a grand idea, but unrealistic if we're aiming to move up in the world in any way. I think it's okay to strike a comfortable balance between having no debt, and having a manageable amount for a little while, so long as you are responsible.
Depends what you mean by 'move up in the world' - that sounds like living beyond your means to me. IMO opinion, the only reasonable debt is a mortgage, and that's because it's financing an appreciating asset. Financing a car is ok, but you must be able to take the hit on the depreciation, and not have more than 50% of yearly income invested in it - that way if you lose your job it doesn't become a noose around your neck.
I have no intention to live beyond my means, though I am quite aware that many people do. What I meant by 'move up in the world', to use my specific circumstances as an example, was having an ability to transport myself to a job that has career prospects and utilizes my skills. Without my own transport, I am limited to work for the businesses within walkable distance of my home (they are mostly dollar shops and pizza restaurants, which are fine, but not exactly dream work), or that exist on the bus route that runs through my neighbourhood. Many of the better job opportunities in my area are either three bus rides and as many hours away, or cannot be reached by public transport at all. My husband can only drive me around so much as he also has a job to get to, and his hours are not the same as mine. For several months, I was stuck in my office until 11pm every night because the buses stop running at 7, and I had to wait for my husband to collect me. It wasn't sustainable. So I guess as much as you see a mortgage as an asset, I see my working life as one as well, and in order to have a better working life, I need a car. It would take me years to save up to purchase a car, and I can't save money if I don't earn any surplus, and round and round the cycle goes. Hence the preference to finance.
Edited to add: re. your comments about car depreciation, which are of course very valid: this is why I'll be financing a cheap run-around that I'll eventually be happy to sell on for pennies, if anything.
Edited to add: re. your comments about car depreciation, which are of course very valid: this is why I'll be financing a cheap run-around that I'll eventually be happy to sell on for pennies, if anything.
See, I would rather buy a $2k car and run it until it dies (which I do - 2003 Mazda Protege) and not have a payment. When that dies, I'll buy another cheap car until I can save up to pay cash for something more expensive.
The average car payment is now $505. Put that in a Roth IRA for 35 years and get a decent rate of return and it's millions of $. I don't like cars to the tune of $millions.
I would encourage anyone to look at Dave Ramseys Youtube channel.
The average car payment is now $505. Put that in a Roth IRA for 35 years and get a decent rate of return and it's millions of $. I don't like cars to the tune of $millions.
I would encourage anyone to look at Dave Ramseys Youtube channel.
If I had $2K to drop on a car and not be stuck with a monthly payment, believe me, I would. I aspire to your way of doing things, and am generally an advocate of living without debt as much as possible - hopefully, one day, I will be able to do so wholly. It's just not an immediate option for me, while getting to and from work is an immediate need. Perhaps that is our grey area here. For some of us a bit of debt is a necessary stepping stone, and let's hope we all use the luxury briefly and wisely.
As an aside, I am shocked by that $505 figure! There is not a frilly chance in hell you'd ever catch me paying $505 per month on a car.
I will check out Dave Ramsey's channel.
As an aside, I am shocked by that $505 figure! There is not a frilly chance in hell you'd ever catch me paying $505 per month on a car.
I will check out Dave Ramsey's channel.
That said, I REALLY want a Bullitt Mustang, but refuse to pay $800 a month on a car!
The reality of moving to the USA for most of us is that we have to finance a car somehow. Personally, I would not advocate a $2k car - you are just asking for that to break down when you need it and have an expensive repair bill to cope with.
Sounds like you are doing ok with the credit cards - it does actually take some time for the credit to build and if you don't use credit, it won't. Getting a $5-$10k loan for a car, makes sense, you get a decent car (not new, so depreciation is minimised), you're paying it off every month and your credit score goes up.
I always pay off my credit card each month, both of my kiddoes are authorised users on one and sometimes, it goes right up to the limit and I don't see a drop in my credit score. I just pay it off.
FWIW - a mortgage advisor told me that having 4 lines of credit is the optimum, at least when getting a mortgage. Keep up to date with payments, never be late and you should be ok.
Dave Ramsey??? Nah. Old hat. Look at MrMoneyMustache and YNAB.
Sounds like you are doing ok with the credit cards - it does actually take some time for the credit to build and if you don't use credit, it won't. Getting a $5-$10k loan for a car, makes sense, you get a decent car (not new, so depreciation is minimised), you're paying it off every month and your credit score goes up.
I always pay off my credit card each month, both of my kiddoes are authorised users on one and sometimes, it goes right up to the limit and I don't see a drop in my credit score. I just pay it off.
FWIW - a mortgage advisor told me that having 4 lines of credit is the optimum, at least when getting a mortgage. Keep up to date with payments, never be late and you should be ok.
Dave Ramsey??? Nah. Old hat. Look at MrMoneyMustache and YNAB.
Yup, my CC is paid in full each month too. I did hear that 3 or 4 lines was optimal from my mortgage advisor, but he said that the advice I got from another, which was to use a mortgage as a 4th line of credit, was awful. He did say that of all your credit lines though, a Mortgage is the one that really stings you if you have a late payment.
The maths doesn’t support your conclusion. Even if I spend $2k fixing my $2k car, I’ve still spent less than your $5k car and have no debt! Meanwhile you’re making payments.
You cannot expect an ROI on a vehicle unless it’s a classic or super car. Therefore, it makes sense to spend as little as possible.
i used to live with car payments, but then I actually realized what I was costing myself so vowed never to have another.
I agree with this. Those of us who emigrate to be with an already resident spouse are very lucky - we have a softer landing spot, and someone to not only show us the ropes but to lean on financially/materially until we have found our feet. Without my husband and in-laws being kind enough to pick me up and collect me, I'd not have been able to get to/from my first job here without a 60 minute walk each way along a highway that, at the time, was shrouded in snow and ice. And without that job, I'd not have been able to afford to finance a car, let alone purchase one outright. Therefore, a credit score is necessary. And not only to finance a car - without a credit score, how are we supposed to rent a property, let alone get a mortgage? For most of us, we have to put ourselves in debt before we can reasonably expect to build any quality of life - perhaps there is a flaw in the system there. The lifestyle civilservant and tom169 have given a nod toward, while a great aspiration, is only attainable if one has saved/inherited money to begin with. It's not realistic for those of us who are just starting out and/or who have a more humble disposable income.
This is another very valid perspective, which I appreciate hearing (and need to hear - I truly have very little clue about cars to begin with. This makes complete sense to me).
Thank you for these pointers, too! I will take a look at all of these resources.
This is another very valid perspective, which I appreciate hearing (and need to hear - I truly have very little clue about cars to begin with. This makes complete sense to me).
Thank you for these pointers, too! I will take a look at all of these resources.
80% of millionaires in the US are first generation. I came to the US with $4k in my pocket and a wife who had debt, trust me, it's do able.
Your biggest wealth building asset is your income. If you are giving it all to the bank every month, you will NEVER save and build wealth. It's impossible.
Your biggest wealth building asset is your income. If you are giving it all to the bank every month, you will NEVER save and build wealth. It's impossible.
Wrong. If you buy a $2k car and spend $2k in repairs you do not have a cat worth $4k, you have a $2k car with the start of many repair bills.
A car cannot be considered an investment, it is an expense necessary for living in the USA.
The answer is to live within a reasonable distance of work so that you can walk/bike or use public transportation.
OP i have recently bought an ebike to replace some of my car usage, it's fab!
A car cannot be considered an investment, it is an expense necessary for living in the USA.
The answer is to live within a reasonable distance of work so that you can walk/bike or use public transportation.
OP i have recently bought an ebike to replace some of my car usage, it's fab!
I agree that it is the reality for many, even if it shouldn't be. I used to be that person (especially with cars) who drove something nice for, as much as anything, the prestige. Like Ramsey says - you drive something you can't afford, to impress people you'll never meet (at a stop sign), or people you don't really like. It's stupid.
I don't pretend that I am quite there yet (the wifes debt is still to be overcome!) but we have paid off $25k in 12 months and have about another 6 to go to be debt free. The more you cut, the faster it goes.
You aren't going to get back what you put into the car anyway, so my way still saves you $1k.
I don't pretend that I am quite there yet (the wifes debt is still to be overcome!) but we have paid off $25k in 12 months and have about another 6 to go to be debt free. The more you cut, the faster it goes.
You aren't going to get back what you put into the car anyway, so my way still saves you $1k.
While a UK university student this would have been harder to do, I know the OP was planning ahead and saving as much as she could in her circumstances while also trying to minimise her student debt. Everybody's circumstances are different, yours sound like you had more opportunity to put money away.
As a young adult, I was able to build credit quickly with store charges and then in 1972 hubby and I applied for our first car loan. A 1972 Datsun station wagon. Cost was well under $10,000 and we financed it through GEICO as hubby was a federal employee. After that and our divorce it was only used cars for me until 2001. If I had the bills in front of me, I would probably discover that I paid the same plus more than what I paid for the used car to keep it up and running, often finding myself stranded somewhere when it broke down. In 2001, I could once again afford to by new and have done only that since then. I've never paid more than $18,000 for a new car. I like Hyundai and they are inexpensive. I buy sedans not SUVs or four wheel drives. I lived just outside NYC and know how to drive in 6 to 10 inches of snow without the need for 4 wheel drive or studded tires, etc. I would only buy new when I got 0% financing and I put down at least 1/2 the price of the car upfront. The choice is there to buy new or pre-owned/used so that the buyer can make the choice their wish.
As for building credit, don't know why Harvey has not called his credit company and asked for a larger increase in available credit since the ratio between used and unused will positively affect his credit scoring. Also don't know why it is so important anyway since he already has a mortgage, is not over extended, lives within his means, etc. Unless he wants to be purchasing something expensive in the near future, i.e. travel plans, home improvements, he either needs to ask for more credit or look into obtaining a different card with a high limit and cancelling out the first one.
As for building credit, don't know why Harvey has not called his credit company and asked for a larger increase in available credit since the ratio between used and unused will positively affect his credit scoring. Also don't know why it is so important anyway since he already has a mortgage, is not over extended, lives within his means, etc. Unless he wants to be purchasing something expensive in the near future, i.e. travel plans, home improvements, he either needs to ask for more credit or look into obtaining a different card with a high limit and cancelling out the first one.
Regarding credit. I'm not stressing but had no idea I could ask my credit company for an increase in credit. The last time I enquired about they I was told they only review it every x months and I couldn't bring that forward. It isn't important in the grand scheme of things, I just want to have an acceptable credit score and wasn't sure if it just took a lot of time or if I was doing something wrong. Thanks for the input.
Personally I still go the new car route because the peace of mind of knowing your wife and kids are unlikely to break down when they leave the house is worth it to me, that and the fact work pays for one of my vehicles. If you really want to save money don't have kids, they cost a lot of money that you'll never get back and stop you from driving beaters.
Jan 25th 2019, 5:40 pm
#34
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Re: Building Credit, and I doing it right or wrong?
Wanted to follow up this thread to say that more score is slowly improving (I guess it just takes time) and last week I got offered an upgrade to a cashback credit card with my current provider (Capital One), so things are looking up!
Jan 25th 2019, 8:56 pm
#35
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Re: Building Credit, and I doing it right or wrong?
I put everything on my credit card and pay it off immediately.
The points pay for my international holiday every year with plenty left over.
The points pay for my international holiday every year with plenty left over.
Jan 31st 2019, 12:44 am
#36
Austin. TX.
Joined: Sep 2013
Posts: 5,930
Re: Building Credit, and I doing it right or wrong?
for the first time, I used my card enough to get bonus
airmiles from BA chase to get a flight + accompanying flight. DD and I will be using this later in the year.
Feb 1st 2019, 1:01 pm
#37
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Re: Building Credit, and I doing it right or wrong?
All the questions I was going to ask - great thread!
Mar 12th 2019, 1:30 pm
#38
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Joined: Nov 2017
Posts: 96
Re: Building Credit, and I doing it right or wrong?
Just wondering which credit score company people use. I have been here a month now, though only settled in an apartment for 2 weeks, but was wondering if I would register for a credit score yet. I was able to obtain an $8,000 limit amex credit card which I use for everything as well as a smaller credit card through HSBC, due to existing relationships with each, so hoping that I'm in a better starting position than most.
I just tried 3 different sites but had 3 different blocks preventing me from even seeing if I would register for a credit score:
- Mint: HSBC bank is blocked so couldnt connect it
- Experian: As I have been at my address less than 6 months it asks for a previous address, but does not allow non USA addresses
- Credit Karma: Requests the last 4 digits of my SSN which annoyingly I still don't have
Am I best waiting until I receive my SSN and then trying again with Credit Karma? Are there any other alternative options that anybody is aware of?
Thanks
I just tried 3 different sites but had 3 different blocks preventing me from even seeing if I would register for a credit score:
- Mint: HSBC bank is blocked so couldnt connect it
- Experian: As I have been at my address less than 6 months it asks for a previous address, but does not allow non USA addresses
- Credit Karma: Requests the last 4 digits of my SSN which annoyingly I still don't have
Am I best waiting until I receive my SSN and then trying again with Credit Karma? Are there any other alternative options that anybody is aware of?
Thanks
Mar 12th 2019, 1:53 pm
#39
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Joined: Aug 2013
Location: Athens GA
Posts: 2,133
Re: Building Credit, and I doing it right or wrong?
Just wondering which credit score company people use. I have been here a month now, though only settled in an apartment for 2 weeks, but was wondering if I would register for a credit score yet. I was able to obtain an $8,000 limit amex credit card which I use for everything as well as a smaller credit card through HSBC, due to existing relationships with each, so hoping that I'm in a better starting position than most.
I just tried 3 different sites but had 3 different blocks preventing me from even seeing if I would register for a credit score:
- Mint: HSBC bank is blocked so couldnt connect it
- Experian: As I have been at my address less than 6 months it asks for a previous address, but does not allow non USA addresses
- Credit Karma: Requests the last 4 digits of my SSN which annoyingly I still don't have
Am I best waiting until I receive my SSN and then trying again with Credit Karma? Are there any other alternative options that anybody is aware of?
Thanks
I just tried 3 different sites but had 3 different blocks preventing me from even seeing if I would register for a credit score:
- Mint: HSBC bank is blocked so couldnt connect it
- Experian: As I have been at my address less than 6 months it asks for a previous address, but does not allow non USA addresses
- Credit Karma: Requests the last 4 digits of my SSN which annoyingly I still don't have
Am I best waiting until I receive my SSN and then trying again with Credit Karma? Are there any other alternative options that anybody is aware of?
Thanks
Mar 12th 2019, 2:46 pm
#41
Lost in BE Cyberspace
Joined: Jun 2011
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Posts: 6,159
Re: Building Credit, and I doing it right or wrong?
Either way it will develop through time and grow higher with efficient use of your credit. Doesn't take too long. 3 - 6 months to be usable.
Incidentally, I have Chase and Wells Fargo accounts, they both provide FICO credit scores. I think I'm around 824 at the moment.
You don't have a SSN?
Mar 15th 2019, 7:27 pm
#42
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Posts: 96
Re: Building Credit, and I doing it right or wrong?
Thanks all, my SSN has arrived now - I was just trying to do everything in the first few weeks or arrival and it was delayed (It never arrived in the first 3 weeks and so I had to actually visit in person, fortunately it arrived only a few days afterwards)
Plan is to build credit ahead of buying our first house, though not for probably 18 months or so. Just trying to ensure I am in a strong position as possible rather than doing nothing now and then worrying about it two months ahead of when I would require a good score.
Plan is to build credit ahead of buying our first house, though not for probably 18 months or so. Just trying to ensure I am in a strong position as possible rather than doing nothing now and then worrying about it two months ahead of when I would require a good score.
Mar 15th 2019, 8:50 pm
#43
Lost in BE Cyberspace
Joined: Jun 2011
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Posts: 6,159
Re: Building Credit, and I doing it right or wrong?
Good.
Paying for things on credit and then paying off the bill almost immediately is very productive. As mentioned I rarely carry cash, that's what Mrs. H is for, everything is on the card. Shows you're a safe bet.
Also, get as much credit as you can, but under-utilizing it is good also. It shows you're not desperate for it. Therefore safe.
I've not followed all your comments but there are some excellent deals for cards that give points/rewards/air miles.
And the big no, no is to miss payments of course. Generally that will tank you. (There are exceptions.)
If you follow these principles, and ask your card provider to raise your limit every so often, you should have a healthy credit rating in 18 months.
Paying for things on credit and then paying off the bill almost immediately is very productive. As mentioned I rarely carry cash, that's what Mrs. H is for, everything is on the card. Shows you're a safe bet.
Also, get as much credit as you can, but under-utilizing it is good also. It shows you're not desperate for it. Therefore safe.
I've not followed all your comments but there are some excellent deals for cards that give points/rewards/air miles.
And the big no, no is to miss payments of course. Generally that will tank you. (There are exceptions.)
If you follow these principles, and ask your card provider to raise your limit every so often, you should have a healthy credit rating in 18 months.
Last edited by Hotscot; Mar 15th 2019 at 8:53 pm.
Mar 15th 2019, 10:46 pm
#44
Austin. TX.
Joined: Sep 2013
Posts: 5,930
Re: Building Credit, and I doing it right or wrong?
If you plan on buying a house then your best bet might be to approach Wells Fargo, Chase and Bank of America soon. They all have international mortgage programs that basically assume you have good credit from your home credit ( they will ask for lots of financial statements from you going back 2 or 3 years to back it up).
However, most close the door on these programs at 12 months. And usually it's better to contact them sooner rather than later. It can take a while to get the all the information to them to assess.
However, most close the door on these programs at 12 months. And usually it's better to contact them sooner rather than later. It can take a while to get the all the information to them to assess.
