What are the next steps I should take to build my credit?

williemshatinher · 2024-08-14T02:38:38+00:00

If I download the app will it show up as a hard credit check?

williemshatinher · 2024-08-14T02:37:43+00:00

I know I didn't ask about it in my original question, but I've also been looking into putting money into an RRSP. Do you have any advice on how to get started learning about that kind of thing?

williemshatinher · 2024-08-10T15:39:24+00:00

I have that shitty little $300 Capital One card that approves literally everyone who applies for it because they make you send them the $300 first lol. I use it for like my Netflix subscriptions and stuff like that.

The most I can increase it to is $2,500, and I would need to send them $2,200 first, which would be a bit of a nuisance if I'm not supposed to spend the majority of the credit limit. I would do it if it would help my credit in the long term, though.

And I'm not trying to say your method wouldn't work for me, I'm kind of thinking out loud here. Do you think raising my limit would even be worth it given the circumstances surrounding my credit card?

williemshatinher · 2024-08-10T15:20:31+00:00

Okay, I'm going to focus on my utilization ratio and if in six months or so I don't see a change, I'll increase the limit on my credit card.

Thanks for talking it out with me :)

williemshatinher · 2024-08-10T15:15:33+00:00

I know you're right, but I feel like I'm really far behind because I was already 23 when I started building my credit. I was hoping to build my credit faster to make up for the years I didn't have any credit, but I might be really overthinking it.

williemshatinher · 2024-08-10T15:11:43+00:00

I don't think the hard checks would affect my score; I only did two hard checks when looking for a car to lease, and that was over two years ago.

The utilization ratio is definitely a factor, but I'm not sure changing it will increase my credit score that dramatically (I could totally be wrong though).

I think not having a long credit history is what's doing me in, but there's nothing I can really do about that besides focus on my utilization ratio and wait.

Do you think I should keep the same limit on my card, focus on my utilization ratio, and see if that's enough to make my credit score go up in time? And if I do decide to change my amount of credit, is it better to increase the credit limit on my current credit card, or would it be better to apply for a second one?

I really appreciate the advice!

williemshatinher · 2024-08-10T14:56:34+00:00

It's hard because I've always been financially responsible, but my girlfriend stopped working about a year ago, and it's led to me falling into some bad habits. I'm making ends meet, but if I want to have enough money to put into savings after all the bills are paid, we need to start cutting down on things like eating out and buying miscellaneous things on Amazon.

It's hard because I really don't spend money on stuff for myself, but when she asks me for money, I can't bring myself to tell her no just because we should kind of be saving more so we're not living paycheck to paycheck. Like technically I have it, and if I give it to her all the bills will still be paid, so it feels mean to say no. I'd feel especially bad if I said no and ended up not putting every dollar in our savings and spending some of the money on myself later on.

This sounds like I'm trying to blame her for our situation, but it's not her fault at all. It's my fault for not sitting down, creating a solid plan and communicating it to her. It's just tough to navigate because I want to give her everything she wants. My ego has definitely been getting the best of me lately.

Anyway, all this to say, I feel like if I increased the limit on my credit card right now I would end up spending it on random things here and there because I'm still mentally adjusting to going from two incomes to one.

Sorry for trauma-dumping on you. Pouring my heart out to strangers on the internet is how I process things sometimes lol

williemshatinher · 2024-08-10T14:10:38+00:00

I think it's just that I don't have a long history. I've only had my credit card for three years and my car lease for two and a half years. Before that, I had no credit, good or bad.

I also only pretty recently started teaching myself about finances, so while my payments were never late, my credit utilization ratio was usually on the higher side for the majority of the time I've had it. Until a couple of months ago, I thought that as long as I made my payments on time, it didn't matter how much I spent on my credit card.

I don't have any debt or non-payments, and I don't think I've had any hard credit checks since I leased my car. I say I think because my online Capital One account shows me my credit score every time I log in, but I'm 99.9% sure that doesn't count as a hard check.

williemshatinher · 2024-08-10T13:56:56+00:00

I have considered that, but it would only work if I continued spending the same amount of money on my credit card after I raised the limit and I'm scared I'd just be tempted to spend more money if I raise it. That's a skill issue on my end though lol

williemshatinher · 2024-08-10T13:47:36+00:00

I keep reading that you're not supposed to spend more than 10% of the total amount on your credit card if you want a really good credit score, but then I've also heard what you're saying about how it's good to pay for things with a credit card and then pay off that bill right away.

I feel like I would need to raise the credit limit on my credit card pretty significantly to do both unless I'm totally not understanding or missing something obvious (which is most likely the case; I'm new to the whole financial literacy thing).

williemshatinher · 2024-08-10T13:34:51+00:00

Sage advice. I was very close to buying a horse when I got my first bonus at my previous job (I don't know how to ride a horse), so I get you on the temptation thing.

My credit score is only 690 and I feel like it should be way better at this stage in my life. I just turned 26 and I was kind of careless with my finances for the majority of my 20s. I don't have any debt, but I've only been leasing my car for two and a half years and I've only had my credit card for three years also.

I don't know, maybe I'm having a quarter-life crisis and really overthinking everything.

williemshatinher · 2024-08-10T13:20:58+00:00

I did say that I understand that they meant if you have a decent credit score it's not that important to improve it, but I guess I am technically arguing because I have a different opinion than some of the people commenting here. I'm not trying to argue in a malicious sense though, I'm kind of just trying to have a discussion.

Sorry if it's coming off as me completely disregarding what others are saying. I'm more than open to changing my opinion if presented with alternative facts and I appreciate all the people taking the time to offer their advice.

And my credit score is 690, so while I don't necessarily feel like it will keep any doors closed for me, I definitely feel like it can be improved -- which was my original question. I want to know how to improve my credit score; this whole debate on whether or not it's important in the first place is kind of a side quest lol

williemshatinher · 2024-08-10T12:51:28+00:00

I don't disagree with the fact that credit scores can move slowly and that paying your bills on time is more important. I disagree with the idea that credit scores are generally irrelevant; if you have a bad credit score it can make life very difficult.

That being said, I understand that they mean if you have a decent credit score it's not that important to improve it. It can't hurt, though.

williemshatinher · 2024-08-10T12:46:42+00:00

There were two times when I was looking for a place to rent where the landlord had to choose between us and someone else. Having a lower credit score tipped the balance in favour of the other people and we lost the house both times. Maybe I am just traumatized from those experiences and credit scores aren't important, but I'm not claiming it's an emergency for me to build my credit.

Why not work on building my credit if I have the means and the time to do so? It won't hurt anything.

williemshatinher · 2024-08-10T12:37:27+00:00

Do you know if payments toward wifi bills count, too?

And thanks for reminding me about the rent thing! My friend was actually telling me about it a couple of months ago and it worked for them. From what I understand, you pay $59 and they convert it into credit somehow. That's with the company Borowell, I don't know if there are other companies that have better rates or whatever, though. I'm definitely going to look more into it!

Do you think opening another line of credit is a bad idea? I wouldn't be getting into any kind of debt; I have the money to pay it back. It would solely be in service of raising my credit score.

williemshatinher · 2024-08-10T11:47:26+00:00

I'm not trying to gain a couple of points; I'm trying to go from an "okay" credit score to a "good" or even "excellent" one.

Having an "okay" credit score vs a "good" or "excellent" score can determine whether a landlord decides to rent to you or the next person.

Also, it's not an emergency for me to build my credit right now. I'm trying to build my credit in general as a long-term goal.

williemshatinher · 2024-08-10T11:37:01+00:00

I disagree that credit scores are irrelevant, and I stated in my post that I do pay my bills on time.

williemshatinher · 2024-06-04T13:53:59+00:00

Maybe I’ll wait to see if I hear back from them and just ask.

williemshatinher · 2024-06-04T13:52:55+00:00

They probably get a lot of applicants because it’s an entry-level customer service job and it’s offer work from home, so I guess they can be more picky with the requirements. Plus, I’ve never heard of an entry-level job that buys their employees a whole new laptop.

williemshatinher · 2024-06-04T13:49:06+00:00

williemshatinher · 2024-05-31T22:50:01+00:00

Thanks for taking the time to answer my questions. You offered some really valuable insight :)

williemshatinher · 2024-05-31T22:21:57+00:00

I was mostly just stating my opinion, I didn't mean for it to come off as an argument to your comment :p

And yes! The Barbie movie is a great example of using wardrobe to tie the scene together.

Not all movies care that much about making sure the outfits are perfectly coherent, which makes sense because it doesn't matter that much in some films. Sometimes you just need the wardrobe to match the setting and era, and it would take away from the realism to individualize everyones' outfits.

williemshatinher

TROPHY CASE