Building credit

[Papa D.]

I'm a young newbie looking to get started as soon as I can but I am not in a rush since I know rushing is always bad for business. I have no credit and I was looking to take the FHA loan route. What can I do to build my credit so that I can actually get that loan and be able to purchase my first multi-family home. I was thinking about starting with a quad but what are your opinions? I'm all ears to any and everybody who can help

[Richard C.]

Join a credit union.  A small one with limited membership, preferably, or one of the big national ones.

Pull your credit reports from Transunion, Equifax and Experian.  You almost certainly have some sort of credit record, and you need to know what it is. You can pull your reports once a year for free.

Almost all credit unions have "credit builder" programs.  Basically a small personal loan that gets paid back over 12 months or so.  Get a loan for $1000, put that money plus another hundred or so in a savings account at the same credit union, authorize the loan payments to be pulled from that savings account, and forget about it.  That will ensure you an active line with a perfect payment history, and start you on a relationship with a credit union.  Progressive Credit Union is a small NYC credit union that gets good reviews.  Municipal Credit Union is a large NYC credit union that gets good reviews.

Get a credit card.  You need a real card from a national issuer or bank/credit union, not a store card or something.  If necessary, you can start with a secured card, which is a card where you give them say $500, they give you a card with a $500 limit, and after a year or so they give you your money back and you keep the card.