The Lazy Mentor's Reference Journal
"If you're not embarrassed by your offer, then you offered too much"


Building First Time Credit

Building Credit  (part 2)

Once I had the loans, I took a full year to repay so it would insure that the loans appeared on my credit report.  I always sent the money in 2 weeks before it was due, so that I officially repaid "better than agreed". At the end of a year, all was paid back and I cashed my cd's.  Now I had 3 banks to use as references on other loans.

NOTE: If you get a loan of any type from a bank, you should take at least 6 months to pay it off. It sometimes takes that long to get reported to the credit bureau. Pay it off too soon, and it will never show up on your report. Always pay a week before its due. The last thing you want is a sparse credit file with a late payment showing on it.


After my loans were paid off, I went to my main bank where I had a checking and savings account.  (This was also one of my previous cd lenders.)  And I applied for an unsecured  line-of-credit (loc).

They offered a special credit line to customers, which was attached to your checking account.  You could write checks against the loc, and it also kicked in to protect against overdrafts.  You didn't have to ask for any certain amount.  They simply told you how much you were approved for.

I think the maximum they allowed was $10,000 unsecured, and I was approved for $6,500.  I was pretty happy with that.  I was now 19 and looking for real estate deals. This $6,500 plus my $3,000 from the cd's could be a nice down payment.

Going by the book, my next step was to apply for department store credit cards, like Sears and J C Penney's.  These are usually the easiest cards to get.  Don't apply for a bunch all at once.  Get two and wait a few months.  Go buy a pair of socks on the card, pay it off, and then put the card away and don't use it anymore.  You want the cards to show activity on your credit report, but also want the balances to be very small.

Obtaining a couple department store cards, added to the fact that I was enrolled in college, put me on a mailing list.  I began receiving lots of offers for bank cards (Visa, MasterCard, etc.).  I sent a couple in and got rejection letters back.  They said I already had ample credit available to me.  Humph!

I soon realized that I was getting two very different types of offers.  Some said "Apply Now" and others said "You're Pre-Approved".  And they must be getting my name from different sources.

Continue to Part 3

Copyright 2006 The Lazy Mentor

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