Establishing good credit

10 Replies

Hello,

I am 18 years old and trying to start investing in real estate, but I am struggling with where to start out? I don't have a established credit so my question is what are some good ways you all use to boost your scores? I plan on getting a few credit cards here soon for expenses like gas and food. I would like to hear some other ways I can establish my score and get it raised fairly quickly so I can have more options with investing! 

Since I do not have credit is their anyway I could still invest? Maybe with private lenders and doing flips? Not sure if that would be the best route as I am fairly new and don't want to dig myself a hole I can't get out've. So please feel free to drop any knowledge you have it would be much appreciated!

To save time from writing the finer details of credit scoring and credit building, I'd suggest you spend some time on MyFico Forums to get better educated on credit. http://ficoforums.myfico.com/. You should open 3 cards but don't run up the balance on them. Utilization is key. You can also be added as an authorized user to the account of someone that has great history and pays their bills on time.

I opened a secured credit card with my bank. A secured card is when you give the bank $500, for example, and they give you a $500 card. It's a real card that is reported to the credit bureaus and you can use it for things like renting a car. Only use it to purchase things that you would purchase anyway such as gas and food. Then pay off the balance each month.

Ok thanks and is their any way I can still invest with bi credit?

No*^

@Noah Wood You need to be bird dogging, and partner with someone who does flips, bring the deal into the table. You can as well as wholesale the deal with a voluntary participation like be the errand boy for the flip, you can ask for gas allowance or something. Either you have money and credit, or an amazing deal, or you do sweat equity. For credit cards, start with Discover, at first they gave me a 700 credit limit which i grew.

@Noah Wood

What Manolo said is spot on. Bird dogging, partnering, and wholesaling are great ways to get started investing with little to no money and no credit. As for credit cards, I started with a Capital One card years ago when I had terrible credit and grew from there.

@Noah Wood From my perspective, I think you're putting the cart before the horse.  If I were you, I would solely focus on establishing your credit so you can go to a bank and get a loan.  Sure, you can use private money or hard money, however, it's very expensive.  You're only 18 years old, why not work on establishing your credit for the next 12-18 months and then think about investing.  I would open up one card, establish the history, then after 18 months open up another card to spread out the hard credit inquiries, opening up cards.  I would also try not to spend more than 10% of your limit on any one card (credit utilization) and pay off the amount due in full each month.  Do not just pay the minimum.

@Noah Wood   regardless of your thoughts on investing in RE I do like the idea of a secured credit card for you because of your age.  I think the best benefit is that you cannot get sucked in and over spend which is what the CC companies love to do to young people. That's why you see the CC companies on every college campus signing kids up for cards with cool giveaways.

I was able to repair my credit in 4 months using a secured credit card. It said it would take a year to get my deposit back but they sent it to me in 4 months for on time payments.  It was a cash back card so I still use it lol but there is no longer a deposit on it. It is the best card I've ever had. I'm happy to let you know what it is in a private message. 

At your age you are certainly not behind in establishing credit, you just need to do it. Real Estate will always be there and could be a bumpy jumping off point for a young person. But, I love your enthusiasm and where your head is at for an 18 year old.

@dana walker thank you for the info and if you wouldn’t mind send me the info on the card that’d be greatly appreciated!

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