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Questions about Borrowing money to build credit
Posted on 7/19/13 at 11:30 am
Posted on 7/19/13 at 11:30 am
Does it help your credit to borrow 5,000 and pay it back in a month or so. I'm looking to buy a house in the next year or so. The only credit Ive ever had has been a credit card for the last 6 months.
If it does help what the magic amount 1,000 5,000 10,000 and time can you pay it all back in a day or do you need to pay it off over several months to have any benefits.
If it does help what the magic amount 1,000 5,000 10,000 and time can you pay it all back in a day or do you need to pay it off over several months to have any benefits.
This post was edited on 7/19/13 at 7:25 pm
3
Posted on 7/19/13 at 1:04 pm to D Tide
My fiance had bad credit 2 years ago and I told her we're not getting married till its fixed and in 2 years its gone from like 480 to 710. She had an old car note,credit cards and student loans that were delinquent so that dropped her far.
This is what she did
1.Secured credit cards, 2, $200 each, keep balance under 30% and pay it off monthly
2.I got her an amex in her name under my account, it reported great for her
3.When her credit got a little better, I got her 3 short term loans at her bank that were secured with cash in a CD ie 6 month,1 year and 2 year small loans $2000-3000 each I honestly forgot.
4.Then when her score was 600 or so I had her finance a tv we bought for 1 year no interest, it reported.
5.Then I had her finance a couch and dining room table at 0% for 18 months when we were looking for those.
Her credit is 710 today in less than 24 months, so it's doable but I followed the directions of my CPA exactly and started getting her stuff financed once her credit score was decent after the initial few months with the secured cards.
This is what she did
1.Secured credit cards, 2, $200 each, keep balance under 30% and pay it off monthly
2.I got her an amex in her name under my account, it reported great for her
3.When her credit got a little better, I got her 3 short term loans at her bank that were secured with cash in a CD ie 6 month,1 year and 2 year small loans $2000-3000 each I honestly forgot.
4.Then when her score was 600 or so I had her finance a tv we bought for 1 year no interest, it reported.
5.Then I had her finance a couch and dining room table at 0% for 18 months when we were looking for those.
Her credit is 710 today in less than 24 months, so it's doable but I followed the directions of my CPA exactly and started getting her stuff financed once her credit score was decent after the initial few months with the secured cards.
This post was edited on 7/19/13 at 1:05 pm
Posted on 7/19/13 at 3:13 pm to D Tide
I have a similar question as OP.
If my loan is for 2 years and I double payment and pay it off in 1 year. Is that just as good as paying it off in 2 years/ better? (Speaking about good for credit score).
OP: change title to Question about credit scores
If my loan is for 2 years and I double payment and pay it off in 1 year. Is that just as good as paying it off in 2 years/ better? (Speaking about good for credit score).
OP: change title to Question about credit scores
Posted on 7/19/13 at 3:46 pm to ThaBigFella
For credit utilization ratio, do they show the max ratio of the month or just a snapshot at a given moment of where it is?
Posted on 7/19/13 at 4:05 pm to GenesChin
Snapshot
Posted on 7/19/13 at 4:18 pm to GenesChin
Usually it's the statement balance. It's helpful to make 2 payments per month, a partial payment before the statement closing date, then another to pay off the balance before the payment due date.
Posted on 7/19/13 at 4:56 pm to D Tide
quote:
Does it help your credit to borrow 5,000 and pay it back in a month or so.
Probably not significantly. If you want a good credit rating starting from scratch get a credit card, use it for your everyday expenses, and pay the balance every month in full. Repeat for a few years.
Posted on 7/20/13 at 5:10 pm to foshizzle
Your amount of paid/satisfactory accounts will increase by doing that, but your average credit length will decrease due to opening and closing/paying it so quickly.
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