Hi friends,
What is credit? How do I grow my credit? I’m not even sure what other important questions I should be asking.
My parents are immigrants and I’m also one. I moved to the U.S when I was 11. Unfortunately my parents didn’t have the chances that I had and they didn’t get much of an education. Sometimes I feel like I’ve had to navigate a lot of life in the US by myself (SATs, college applications, school loans, etc.) on top of helping my parents navigate it too. I’m a young adult now and I don’t have any guidance and would really like to start thinking about my future. I think credit is a good place to start. Any info/advice is welcome, I literally barely know much about the system. Thank you.
In: 6
If you have little to no credit, I recommend starting with a secured card. Capital One or Discover It are good choices. You put down a deposit and that it your limit. They hold the deposit as long as the card is open (discover will later upgrade you to a normal card, worth going for this one, imo).
Use the card. Pay it off *in full* before the due date. Try not to use more than 30% of the total limit in a month.
Do this for 6-9 months.
At 9 months, if you’ve never missed a payment, call Discover and ask them to upgrade you to a non-secure card. Get your deposit back.
Use this card for another 6 months. Your score will continue to rise. Follow same rules as above.
At this point, apply for a basic rewards card with *no annual fee*. There are several good options, but choose one depending on what you spend money the most on. Travel, food, shopping, Amazon, etc.
Always pay the balance by the due date. You’ll never pay interest.
Congrats! You now have a credit score and credit history!
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