I'm 19 years old and I have never had a credit card in my life, and I don't feel the need to get one any time soon. However, I want to eventually qualify for loans so I can start investing. Though no credit card means perfect debt to income ratio, it also means no credit history at all. Would this be a good thing? Or is it better to have a good credit history than none whatsoever?
Should I go get a credit card and start build a good credit history now?
Investor · Saint Paul, MN · Member since 2015 · 98 posts · 64 votes
8y
Agree with those two. I was fortunate that my parents helped me open a CC account when I was young to build up credit. You could also get small personal loan from a bank, put it in an interest bearing acct and pay off that loan systematically. You'll lose a little money in interest but establish some credit
Rental Property Investor · Rockford, IL · Member since 2014 · 385 posts · 702 votes
8y
Yes banks will want you to have an established credit history, since you are obviously a responsible individual open up a credit card and use it for a few monthly expenses and simply pay if off monthly. That way you will never pay interest which it sounds like you are averse too and who could blame you lol but will start establishing credit for lenders!
Rental Property Investor · Bellevue, NE · Member since 2014 · 79 posts · 38 votes
8y
Having a credit card, using it responsibly, and paying it off every month will build credit and not affect your debt to income ratio at all.
Make sure you know yourself and can ensure you have the will power to not overspend with it. That's the most important thing you can do before getting a credit card.
Investor · Saint Paul, MN · Member since 2015 · 98 posts · 64 votes
8y
Agree with those two. I was fortunate that my parents helped me open a CC account when I was young to build up credit. You could also get small personal loan from a bank, put it in an interest bearing acct and pay off that loan systematically. You'll lose a little money in interest but establish some credit
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Go get a gas card, easiest way to build credit and get an intro being responsible. Then, when the time comes do promo deal of 0% for a big purchase on store card. Take the money you already have and let the card autodraft so it's done prior to the end of the promo. This will boost your on time payments.
You can also have people you trust and know add you as authorized user. Be warned, that their performance will impact your score for better or worse (late payments etc). But, you don't have to do much if anything with it.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
8y
Credit cards can be very valuable when you are disciplined and smart about it. I have obtained 4 credit cards which give me access up to ~$100K cash advances directly deposited to my bank account at 0% interest. I have used this cash to buy properties, rehab, and refinance to pay back the cards. I have closed and wholesaled property using my credit cards. Bought at least 7 houses using my credit cards in some form or fashion. I also use a HELOC and personal line of credit. All generated by establishing great credit. Again, you have to be smart about it. Like balancing your credit utilization and using for asset accumulation, not toys. Some people are negative about using personal credit. I say if you do establish it, you might as well use it to your advantage. The worst that could happen if my life goes to hell financially and I dont pay my bills is I get bad credit. I don't go to jail for it, lol.
Credit cards can be very valuable when you are disciplined and smart about it. I have obtained 4 credit cards which give me access up to ~$100K cash advances directly deposited to my bank account at 0% interest. I have used this cash to buy properties, rehab, and refinance to pay back the cards. I have closed and wholesaled property using my credit cards. Bought at least 7 houses using my credit cards in some form or fashion. I also use a HELOC and personal line of credit. All generated by establishing great credit. Again, you have to be smart about it. Like balancing your credit utilization and using for asset accumulation, not toys. Some people are negative about using personal credit. I say if you do establish it, you might as well use it to your advantage. The worst that could happen if my life goes to hell financially and I dont pay my bills is I get bad credit. I don't go to jail for it, lol.
If one was to go that route, do not use the HELOC for this lol....