I went from bad credit to excellent credit, and it all started with a Secured Credit Card which requires you to use your own cash as collateral. Eventually after a few months and a history of no issues, you'll get approved for a "real" credit card that will probably just be offered to you automatically by the same company you started your secure line with. Then after a year of using that card, you can probably begin applying and being approved by "better" cards that provide you with better benefits as long as you're smart about managing your card. I personally never carried a balance from month to month by paying the full amount due each month, and I'm sure that discipline started with being forced to use a secured credit card.
This. Banks hate people who don't carry balances but that's the way to go. My dad gave me $1000 secured visa when I turned 18 and said "It's on you". Great life lesson on responsibility. Later, when you can, get a bank loan for your auto purchase (even if it's used), then graduate up from there to starter house, etc....
How to build your credit: Get a store credit card, there're typically easier to get when you have no credit. Buy things with it that you can afford with cash and pay the balance off each month. If you can't afford it with cash, DO NOT BUY IT. Do that over and over for a few months until your score rises. Once your score rises get another card that has some type of 0% interest offer and make a large purchase. Make on time payments and pay it off early before the 0% promotion period ends. DO NOT MISS PAYMENTS AND MAKE SURE YOU FINISH PAYING THE BALANCE OFF BEFORE THE PROMOTIONAL PERIOD ENDS. Keep making small purchases and paying them off monthly on your other card. Follow these rules and 1-2 months after you finish paying off the large 0% purchase you should have amazing credit. To maintain your credit after this, keep all balances below 40% of your credit limit. Be wise about applying for new credit, don't over do it. And never miss or be late on payments. Avoid gas cards and store care cards from places like Walmart or Target. They're entirely too easy to abuse and can get you in trouble quick.
Holy bump. Yeah six years later, and I'm at 754 with an Amex, chase sapphire, amazon store card, and that original shitty capital one secured card I mentioned years ago lol. The secured card got me started.
I read this thread like it was new and was going to respond, until I noticed you had already gotten through all of that. Good for you. Good resource for someone who may be in your shoes now.
Thanks to all that provided advice. Definitely interesting to go back and read about my financial situation then. Started from the bottom now I'm here
This. Both my brothers are in their early twenties and I advised them to get a CC through their bank. It will likely be secured or very low-limit to begin with but that is ok. Once you have the card, you will have a credit history and everything else will begin to unlock. When I was starting off building my credit I went with a Capital One card with a $300 limit. I used it to play for a plane ticket back home and then I quickly paid it off. After 2 years with Chase (Switched over when WaMu was absorbed by Chase) I talked to a banker there and they offered me a Chase Freedom card with a $5000 limit and an APR of about 8%. Just pay your bills, show your good rental history and work history and within a couple years you will be able to apply for things like car loans with no problem.
The way to great credit is simple, pay everything on time. I do not carry balance on anything, and do not borrow too much. If you do that you will have 750+ credit easily and 800 plus is not hard at all.