Being in the Finance industry I can help you a bit here. Getting a credit card will help you to build credit. However, there are a few things you will want to know about using the card and WHO, yes WHO you get the card from.
1. Anytime a revolving credit account goes above 50% of the limit it will/can actually affect your credit in a negative manner.
2. When a revolving credit account is at
30% of the limit or lower it actually builds the score.
For instance if you have a credit card with a limit of $1000 and carry a balance above $500 it will have a negative impact on your credit score (not huge but it does not help). If you keep a balance of $300 or less it will begin to build your score in a positive manner. Keeping it like this for 12 months or so and longer will really help you out.
Stay away from the no name banks for credit cards. Believe it or not your credit will not grow as fast using a small unknown bank credit card. Conversely the bigger bank credit cards from Bank of America, Chase, National City, adn US Bank help to increase credit scores faster when used properly.
Capital One should also be avoided at all costs. They do not report a credit limit to the credit bureaus. What this means is that even though you have a $1000 limit on the card, the minute you charge something and carry a balance of say $570 it shows up on your credit report as the card being maxed! They essentially report your limit as the highest amount ever charged on the card. They admit to doing this so as to keep card users scores somewhat lower in hopes to always retain them as customers. With lower scores reputable banks will not offer lower rates to lure them away.
Have you looked into rent to own programs? They are not the first choice, but may help you out.
In either case get a credit card from a reputable bank. Keep a balance of $10.00 on it all the time. Ask the bank to bump your limit every six months. This will also build your credit. Be responsible and only put on the card what you could actually pay for with cash. Save the money and pay off what you purchase each month all but for $10.00. Be careful not to exceed 30% of your limit though.
Do not worry much about the rate at this point either. Being new to the game the rate will be a bit higher. After 12 months you should be able to negotiate a lower rate.
In 12 months your score should be high enough to get some financing for your tuba on an installment loan. This will also build your credit as it will be exposing you to other forms of credit as well.
Here is the breakdown that comprises a credit score:
35%- Past Payment Performance: Have the payments been on time
30%- Credit Utilization: Has the credit been abused, too many credit accounts (more than say 5-7 of any type open at one time), over limit, above 50% of the limit
15%- Credit History: Depth of credit, how long accounts have been opened, closed accounts
10%- Type of Credit In Use: Is there a good mix between Revolving, Installment, Mortgage, and Open Accounts
10%- Credit Inquiries: How many inquiries have been made in any 3 month period? Usually you do not want any more than 1-3 inquiries in any 3 month period.
This tends to be over emphasized by consumers. If you are having your credit checked once a month by someone, yes, it will probably have a negative effect. Once in a while will not kill a credit score. Just limit how many times it is checked in any three month period. You can check your own credit scores once per year for free with no effect to your score at
www.annualcreditreport.com
Hopefully this helps you out a bit.
So I'm stuck between a rock and a hard place here.
I have to buy a tuba for college, and it's becoming impossible. I've been borrowing my old high schools tuba over the summer while I take lessons with my college's instructor.
Now, there is no way I can buy one in full right now. I've been asking around about financing something of such high price. No luck
The college doesn't have any either BTW.
I can't get any loans because I don't have any credit, and my parents credit is piss poor. Which doesn't matter because they won't support me in music anyways.
I've had a few ideas.
Get a credit card, buy a tuba, pay it off. My friend told me this was a bad idea, saying that I don't want to have a standing balance.
Buy a credit card, use it for small things, pay those off, then have credit to get a loan.
Other than that I'm at a total loss. From the looks of it, I'll have to either go to college for a year without playing, or just don't go till I buy one.
I do wash dishes at a restaruant for minimum wage, but making enough for a tuba would take a very, very long time.
I'm fukked right?
