Credit Info for Beginners

There are a few things you don’t learn in high school. Simple things from brushing your teeth and tying your sneakers to the harder aspects of life like credit scores and health insurance. I had to guide myself through credit all on my own. First steps to building credit are to have an I.D & some sort of consistent income. Either being employed through a company or by being self employed. School income or allowance can also count as income as long as it’s consistent. Credit is basically money that you have to pay back, meaning if you know you can’t pay back money within a certain time frame, do not borrow money. Make sure if you’re borrowing money, you have a consistent income that will allow you to pay it back.

CREDIT KARMA FOR CREDIT SCORE

Okay sis let’s get right into it. Once you have your first job Make a Credit Karma Account through their online app. This app will pull up anything financed under your name and social. Any school loans, open lines, closed lines and even child support. After it pulls up your information you will be able to see your credit score. Basically your credit score is how reliable you are to companies. If your credit score is low, companies won’t trust you with their money. The higher your credit score, the more you can borrow, meaning the more you can buy with that borrowed money. The credit score scale goes something like this ; poor score/ really unreliable 0–400. Bad/untrustworthy beginner score 450–500. Okay/kinda reliable score 550–620 . Good & really reliable score 590–660. Great/ no questions asked type of reliable 660–720+ . Some rules to know ; EVERY TIME YOU LET A COMPANY DO A CREDIT CHECK, IT WILL BRING YOUR SCORE DOWN. EVERY TIME YOU OPEN A NEW ACCOUNT, IT WILL BRING YOUR SCORE DOWN. good thing is, you will learn to balance and juggle your score as you go. Never really panic about your score, it can change at any time and will always be changing over time. If you stay consistent, you’ll stay afloat and even flourish. Once you start declining payments, things will start to spiral. Credit karma also allows you to open up a savings account. This is for people who don’t want to open a savings account with their bank, or if u wanna just have some money separately.What I love about their saving account compared to my chase savings account, is that instead of charging an APR (This is an Annual Percentage Rate) they actually give you interest APR of 30%, making it 3.% monthly. basically they give u 3.% back of what ever you have saved. So for this month I have $700 in the account, so at the end of the month I will be receiving $2.01 back in interest. Most credit cards CHARGE an APR. Basically a small amount for using their resources. Normally companies don’t charge more than a yearly amount of $35 but there are some companies that charge $50+. All of this information differs from the company itself. Chase Bank APR wont necessarily be the same APR information for Capital One Bank. All of the APR and Late fee information will be provided either before sign up or during sign up. Make sure to do your research on whichever bank you decide to go with. Yelp and credit karma can help when it comes to looking for the best bank.

TRANSUNION FISCO VS EQUIFAX ?

Okay stay with me here. These are tools generated to pull up all your social info and put it into one score. Apps like Experian, CK, and capital one all have the scores from either Trans union FISCO or Equifax, some apps like CK show both scores in one. The same way you can see that school loan you took out and haven’t started paying, so can the company thats running your credit report.

Basically all you gotta know is that most non major companies will run the score for trans union, these include small financing like some glasses from Fordham or that new couch from the furniture store. Major companies like best buy or Walmart are only most likely also run for trans union depending on the purchase. When it comes to bigger big boy purchases from apple financing to anything like dental implants or a car, they will run your score through Equifax. Both are just tools used by companies to figure out your liability based on the standard qualifications. So if u make 5 on time payments, for trans union that could be qualifiable for a score of 500+ but on Equifax they could want more consistency like 10+ payments. They scales are different . Other credit run tools include No matter what banks you use for credit, these two tools will be what the companies use. So u paying off some pawn shop isn’t the same thing as credit, it only can effect your credit score when your SSI is involved.

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A beginner credit score normally begins in the 500s. With your score information, the app pulls up credit lines that you qualify for. From there on out you would apply for your first credit card. Based on your score some companies will ask you to deposit your desired credit amount. This is basically to earn your trust. Think of it like this, Give me $150 and i’ll give you a credit card That grows in time, starting with $150. Basically meaning after you make a payment, a certain amount of times, your credit line will go up. EXAMPLE: Set your own credit line $150 , after 3–5 months of consistent payments your credit line will shoot up, now making your credit line worth $250+. The more they trust that you’re gonna make payments on time, the more money they will be willing to let you borrow.

CAPITAL ONE BANK

I started working at Mcdonald’s at 16. Being that I never opened a credit line before, I did not qualify for majority of the well known card options like Discover or chase. Capital One Secure was the card I went with. They allow you to build your credit from scratch as well as help those with “bad” credit. I applied online and they gave me $250.00 of credit, my card only took about a week to arrive. At the time they didn’t ask me to deposit any money I was just given a line based off my credit score. As soon as my application was accepted, my credit score went down by 16 points. At first I panicked and thought I made the wrong choice, but after I made my first 2 monthly payments, it went up 20. I have now been with Capital One for a year and my credit line is at 2,000. Im sure it’ll continue to grow as long as I stay consistent. Now from there I learned about Verizon, pay pal and the borro app. These are all different companies that have financing with credit.

VERIZON WIRELESS

I know people say don’t lease a phone but hear me out. If you can’t afford it thats one thing but NOBODY STAYS WITH THE SAME PHONE FOREVER. So with that being said, I took out an iPhone 11 max pro with Verizon, signing a 30 month contract with eligible upgrade after 5 months. Meaning I pay $147 every month for my phone till the phone amount itself is paid off ($1,200) APR of like 2%. Free Disney plus, apple music and protection all included. They also give monthly $5 amazon gift cards to all line holders. And being that Ive been with them for more than 5 months, I already upgraded and now have the iPhone 12 max pro. The power of credit right. Having this line and paying it off consistently brings up my credit score.

THE BORRO APP — ONLY FOR COLLAGE STUDENTS

If you have a college email. You automatically qualify for a loan from the borro app. This app is credit in the form of actual money. The credit amount will be deposited into your checking account via direct deposit within 1–3 days. The most you can borro up to at first is $300-$500. You can choose to either make a payment once a month or pay twice a month. Less than 3% APR. Meaning if you borrowed $400, you’ll be paying that plus 3%APR which is less than $420. The borro app doesn’t do more than a year worth of borrowing so the APR doesn’t really add much. I would suggest the borro app to EVERYONE who has a college email. https://www.getboro.com/

APPS TO HELP YOU VIEW / BOOST YOUR CREDIT SCORE

• Credit Karma — shows your score and open lines. Can make a savings account with them, APR
• Experian — shows your score, open lines , closed lines and all other info. Allows you to boost your score by finding your major utility bills (mine is verizon) and it will boost your score based on your on time payments.

SIMPLE APP BREAKDOWN

CREDIT KARAMA

• This app allows you to;
• See your FISCO & Trans union scores
• Open a savings account w/ APR interest
• Look at credit card and Loan suggestions based on your credit score.
• See the breakdown of the loans you have taken out.
• See Open Accounts

EXPERIAN

• This app allows you to;
• See your FISCO , Trans union scores and other scores
• See Accounts open & Accounts closed
• Credit Summary
• See your Pre Approval credit card offers based on score