Give me some credit

Hello Readers!

So, my yellow brick road to having OZZZsome credit start about a year ago. I had a student account at Chase Banking under my mom’s main account. Let me also point out that prior to a year a go I did not have any source of income, and my family classifies as low-income, basically what I’m trying to say I that I had no credit and no money. This changed last year, because I had won three separate scholarships together totaling to 6,500. I received 1,500  directly through checks. About how much thinking about how to spend all this money wisely I decided I was going to use the 500 to buy a new laptop, save the 1000, and start up my credit.

I marched down to Chase P Morgan bank to discuss my options with a banker. However, my trip did not go as expected, I felt that my banker had no genuine interest in helping me at all. This was not the first time that I felt like that with that bank, so I decide to switch to Wells Fargo who at the time had a $100 promotion to start a bank account with them.

This was a giant leap for me, because I would have to pay for my account and no longer have my mom as a safety net. While I was opening my account, my new banker asked if I want to apply for a college credit card, and after thinking about it over night I went back to apply for my first credit card! I was scared I would not get approved since I had been advised to apply without a cosigner. I took the risk, and got approved for $ 500 in credit and $250 in cash advance! I had gotten my first credit card and it was all mine!

*Spoiler Alert* for the sake of comparison I now have 11,000 worth of credit, and my credit score went from nonexistent to 730!

Now how did this all happen in a year?

  1. First, I naively MAXED OUT my credit card, which I later learned is a big no no. Instead of paying for my laptop in cash I used my credit card to pay for it. (For more information on what other factors could impact your credit score negatively click here to visit Lexington Law’s website page about credit scores)
  2. I compensated by paying off my whole debt with my scholarship money within three months. I would also like to add that I always consistently gave payments that were at least 3 times higher than my minimum balance due.
  3. Another important factor was that my payments were consistently given before the due date and never late. Depending on my work pay schedule, I would sometimes give more than one payment before the next due date.
  4. By this point, I had a zero balance, but knew that to improve credit score it is ideal to use about 30% your available credit. So I actually started to use my credit card for everyday items, and continued to be responsible.
  5. I just realized that I forgot to talk about something crucial in the world of credit, INTEREST. So during the first six months with my credit card I was offered zero interest rate which is why I was not hesitant to use it as a form of payment. After the six months my interest rate went up to 20% (something I’m not too crazy about, but understood because I was/am just starting my credit out. Even though I have a moderate interest rate, I usually avoid paying interest by paying off my card fast.
  6. In February, around the same time my interest started applying my credit limit  doubled from 500 to 1,000. I was suspicious of this because, I know credit cards target young people into debt. I called the bankers and learned that it was a “reward” for making payments on time. So naturally I kept using my credit card moderately.
  7.  I started receiving offers for student loans and all types of credit cards. I looked into the offers, but was not planning on applying for another credit card. However, after looking at my offers, and my finical situation I decided that after nine months of building up my credit I should apply for a second credit card.
  8. So I applied for my second credit card, the American Express everyday blue card and was given a 10,000 credit limit. I was excited, because I was not rejected! However, I know that college student are easy targets for credit card companies, and 10,000 dollars is so much money. I have no intentions of using this credit card unless its for tuition money, groceries, and other necessities.
  9. Well this brings me to the present. My plan now is to keep both credit cards for at least another two year, and I absolutely will not be taking out any more credit cards anytime soon.

Developing credit is a lot of responsibility. If you’re someone who is looking to start your credit make sure to do your research! If you can afford to hire help, do not hesitate to do it, but make sure to that who ever is helping you is not also taking advantage of you.  You can follow tips one Lexington Law’s page about legitimate credit repair companies. Additionally, it is always go to review your credit report and make sure there is no wrong information  or even identity theft with out your knowledge. Error can be disputed and taken out of your report if they are inaccurate. You can also check out the this federal website to answer any of your questions about credit reports.

 

I hope you enjoyed my little story about how I’ve established good credit and how I plan to maintain my good credit. If you have any questions please feel free to comment !

 

References

“Credit Reports And Scores | Usagov.” Usa.Gov, 2017, https://www.usa.gov/credit-reports.

“Legitimate Credit Repair Companies? – Lexington Law.” Lexingtonlaw.Com, 2017, https://www.lexingtonlaw.com/credit-education/credit-repair-company/legitimate.

“What Is A Credit Score? – Lexington Law.” Lexingtonlaw.Com, 2017, https://www.lexingtonlaw.com/credit-education/credit-score.

 

 

 

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