Help building credit.

[Xanifur]

Greetings, My name is Ryan W, I'm 18 from Wisconsin. I just found this website not 30 minutes ago while searching for marketing strategies. I just want to say I love this place.



I have a credit horror story... and believe it or not, it isn't debit.

I'm starting up my business www.lp-optics.com/
I have many suppliers, one I'm currently doing business with-- many suppliers require credit terms to purchase products.

I am in a predicament where I am having a hard time building a credit reputation. I was declined for a student discover card because of, get this, Insufficient credit history. You would think a credit card company would love nothing more than to get a fresh new customer to get into debit.

As you can imagine, starting a business and working with wholesalers is a pain when you have no credit. I have no outstanding balances on anything, I have not shut down any bank accounts. I have had many troubles with PayPal putting a hold on my business account, which was finally lifted after many negotiations. I am having a hard time opening any bank accounts, because they must pull a "soft" credit report on me. Problem is, I am not on file with any of the three credit bureaus. I wrote Experian a professional letter explaining my situation -- how I wanted to be listed in their directory. In response to my letter, I received a single sheet of paper stating they did not have sufficient information to pull a credit report. -- I did not request a credit report.


I would love to have a credit line of $50,000 but at this stage, with no histroy it is near impossible. I will have to start small and continue to expand.

I did receive a Capital One credit card offer in the mail, and was approved. I will use this to make small purchases such as gas etc. to start building a credit score.



Any advice as to how to build my credit to the point where I can use it to buy large quantities of goods, and process large amounts of customer orders?

[dbc55]

Hi Ryan,

Have you tried going to a bank for a personal loan? I'm not sure if this is a good idea or not, but you may like to consider getting say a $5,000 unsecured loan, and paying it back immediately (or within a day) so as to have that credit record, but not pay much in interest.

Another option would be to get Hire Purchase on a small appliance, say a toaster or blender. This would be a rather inexpensive way of building that history.

Hope this helps, keep in touch about how it goes!

David

[trustfundbaby]

+1 to dbc55
Keep buying stuff you know you can pay off on your credit card and pay them off.
In fact, start using your credit card for everything and paying off the balance with your cash each month (before the interest and fees hit). I'm not an expert but I think that should help out a lot.

Also there is this site that was featured in Fast Company ... www.prosper.com
You should check it out. Instead of one loan entity, people bid to loan their money to you. Its crazy but it works!

Hi Ryan,

Have you tried going to a bank for a personal loan? I'm not sure if this is a good idea or not, but you may like to consider getting say a $5,000 unsecured loan, and paying it back immediately (or within a day) so as to have that credit record, but not pay much in interest.

Another option would be to get Hire Purchase on a small appliance, say a toaster or blender. This would be a rather inexpensive way of building that history.

Hope this helps, keep in touch about how it goes!

David

[Xanifur]

+1 to dbc55
Keep buying stuff you know you can pay off on your credit card and pay them off.
In fact, start using your credit card for everything and paying off the balance with your cash each month (before the interest and fees hit). I'm not an expert but I think that should help out a lot.

Also there is this site that was featured in Fast Company ... www.prosper.com
You should check it out. Instead of one loan entity, people bid to loan their money to you. Its crazy but it works!

Hey, thanks! This website looks promising.

[ProLogic]

Yea, trustfundbaby basically summarized with what you have to do. Try making some big purchases through credit and pay them on time. I would take out multiple credit cards and then cancel them when you think you don't need it anymore. CC's are usually to easy to take out and use. Remember, If you don't have the cash for something you can't afford it!

[mxer210]

FYI multiple credit cards lower your credit score. I believe 10 points per card.

[dbc55]

Does a lower score = worse credit?

Or does a lower score = better credit? I.e. having more credit cards improves your chances of getting a more credit?

[mxer210]

Lower score == worse credit. You want a high score.

This might help

[jasaunders]

You may have the same problem getting a loan on prosper as you do with your bank. Lenders on prosper see your loan grade, which is a small range of where your credit score fits in.
Also, do not get credit cards and then cancel them. This is bad for your credit. If you don't plan on using them anymore, either put them away or cut them up, but you shouldn't cancel your cards, unless you have a very large number of them.

And the more cards you have doesn't equate to a lower credit score, definately not at 10 points per card. The more credit you have, the better your score will be. Your credit rating largely depends on your debt to credit ratio. Having too many accounts open is not good, but you are not deducted for every account you open.