Building credit with no student loans and no credit history?

[Codaster]

I'm a junior in college and I'm looking to build credit before medical school starts. I figure I have ~15 solid months to get on this if I start in January and I could use some advice. Here's my situation:

I come from an extremely impoverished family (lived with my grandmother with ~9k/income) so I've never had any sort of bills. I was VERY fortunate to receive complete need-based aid at my undergrad institution. Considering my entire family has little to no credit, no one has advised me to build it young or anything like that, so I'm essentially starting from scratch. Also, I have little ability to ask anyone to co-sign for anything (If that even affects credit, I'm not sure; I'm a total noob).

From what research I've done, I should get a credit card. However, all of the typical student ones (Disocver, etc.) have denied me because I don't have a steady stream of income. Others have told me to look into "secured" credit cards, which I plan on doing once I get back in town for the Spring semester.

My question to you is this: what should I be doing to maximize my credit so that when post-undergrad rolls around, I can actually qualify to get an apartment, loans, etc.

Thanks so much!

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[45408]

If you have been previously denied, then I would stop applying for credit cards, as each additional denial might count against you. A creditor can do a "soft pull" of your credit, to see if you qualify for a product, which is more like an informal perusal of your credit report, or they can do a "hard pull," which is like a formal application for a loan or a credit card. More details here: https://www.lendingtree.com/credit-reports/soft-pull-vs-hard-pull-article

You've probably had a few hard pulls of your credit, resulting in denials, which will further harm your credit. I think a secured credit card is a good idea. It's basically a debit card, but it will help your credit. Put $200 in it, use it for gas/groceries every month, and keep replenishing the account. Then, you might eventually get a credit card offer in the mail, which usually means they did a soft pull of your credit and have tentatively pre-approved you.

Good article here - http://www.quizzle.com/blog/2010/04/how-to-build-credit-from-no-credit-in-6-easy-steps/

and another one here, in more detail - http://money.msn.com/credit-rating/raise-your-credit-score-to-740-weston.aspx

 

[Codaster]

Thanks!! Those posts were immensely helpful.

I've done my free annual credit report since the last time I applied for a credit card and only one of the applications showed up and it showed up under "only available to you." I'm not sure if that's actually true or not, but that what the site said.

Thanks for your help!

EDIT: Are there any especially good banks/companies to go through for a "secured" credit card? I've heard Capital One, but nothing else.

 

[45408]

EDIT: Are there any especially good banks/companies to go through for a "secured" credit card? I've heard Capital One, but nothing else.

I would specifically avoid Capitol One for this following reason - http://www.consumerismcommentary.com/capital-one-credit-cards-hurt-your-credit-score/

I would see if you can go through your local bank, if they offer one.

 

[Codaster]

I would specifically avoid Capitol One for this following reason - http://www.consumerismcommentary.com/capital-one-credit-cards-hurt-your-credit-score/

I would see if you can go through your local bank, if they offer one.

Unfortunately I just called my actual bank to see if they offer one and they don't. Any other suggestions?

Thanks for all of your help!

 

[joeDO2]

back when i was 18 i got my first cc from bank of america. it was a $500 secured card for about a year and then they extended a credit line after that. it was a few years ago but i'm sure being such a big bank they have some options for you.

 

[Codaster]

back when i was 18 i got my first cc from bank of america. it was a $500 secured card for about a year and then they extended a credit line after that. it was a few years ago but i'm sure being such a big bank they have some options for you.

Yeah, Bank of America is one of the places I'm considering. I'm having trouble figuring out which one is truly my best option. Despite what was posted above, almost all websites say is capital one is the best.

Thanks!

 

[joeDO2]

Yeah, Bank of America is one of the places I'm considering. I'm having trouble figuring out which one is truly my best option. Despite what was posted above, almost all websites say is capital one is the best.

Thanks!

no problem. for what its worth, I have both a BOA card and capital one. BOA increased the credit line faster and higher than the capital one if that matters to you. I do like having the capital one card though because they have no foreign transaction fees and easy point redemption online.

 

[Codaster]

no problem. for what its worth, I have both a BOA card and capital one. BOA increased the credit line faster and higher than the capital one if that matters to you. I do like having the capital one card though because they have no foreign transaction fees and easy point redemption online.

That's good to know. I have one singular focus, namely, to build credit as fast as possible. I'm making the assumption that it looks better to "graduate" from a secured credit card to an uninsured credit card so I might look into BOA or others that have a reputation for increasing credit faster. It also helps that there is a BOA on the street where my apartment is at school, so it'll be within walking distance.