Quote:
Originally Posted by USMCSSGT-RET
35% of your credit score is payment history - simply making your payments on time every month on all debts you have.
30% is your debt to credit limit ratio - compares what you owe to your combined available credit.
That being said, the fastest, cheapest, and easiest way to build credit is with a credit card. You can get a $1,000 credit limit, use it every month for small purchases, like $10 purchases, and three or four days later, pay it off. You won't accrue any interest and when the credit card company reports to the credit bureaus, they'll report that you made your payment on time (the 35% factor) and that you owe $0 (the 30% factor). Those two things will help your credit faster than anything.
There are other factors involved such as credit length, inquiries, and types of credit used. But the two factors I mentioned above comprise 65% of your FICO score.
Let me know if you have any other questions - I'm an Accredited Financial Counselor as well as an MBA (also working on a MS in Finance).
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This is how I started when I first started college (19 years old). I got a credit card with a decent interest rate (never had to used it yet) and pay it off every month. I started out with just using it for gas then started using it for other purchases. Now I use it for everything in case of a compromise ever happens it doesn't affect my bank account, just my credit card. After about a year or so I then financed a car in my name and had a decent down payment (the dealership and creditors were very surprised how much I had), make all the payments on time, and pay more than the minimum payment. I now, at the age of 23, have a high credit score. I am on my second car financed in my name and credit score is still good. Looking at getting a house in the next 6 months and feeling very confident because of how much I have saved as well as my credit score.
To get a good credit score takes work, time, and smart financial choices in life. Also, get off that pre-paid phone as someone else said.