Hey guys, I'm new to credit and trying to establish some. I'm finding that apparently you need credit to get credit... So I've been trying really hard to find ways to establish credit and it's not going so well. Here's where I'm at right now - I have a score of 630. I have student loans out that started 5 years ago. I am going back to school for nursing, and by the end will be in debt around 40,000 which wont be un-managemable with the money I'll be making. When I was 18 I lived in my first apartment and had no idea how to take care of my expenses, so I defaulted on time warner cable, which right when it went to collections I paid it off. I'm 23 now, so it's still on the report but it is paid. I have a care in my name that is paid off and never defaulted, and nothing else outstanding. I got something in the mail for an american express credit card. I figured "Great, I'll apply and buy gas with it, pay it off and establish credit." I wasn't approved, for obvious reasons. So I go to my bank, see what they have and ask for advice, they had nothing that I would likely succeed at getting, and advise me to start small with a department store credit card. Here's where things get weird- I find out after applying for amex that every time I apply it hurts my score. Fine, so I decide I'll ask what the criteria are. I call target, they require that I have a history of revolving credit... I do not have such history so I will not be approved I do not apply. I call best buy - they have no clue and tell me I need to speak with a store manager (who obviously has no clue). I call sears... I have to have an existing card/account to talk to someone about a card. So I call the regular customer service line, where they say "oh, I have to transfer you," they do so... back to a voice that tells me to put in my account number. So I call again, and they say "oh, you have to verbally say 'customer service' a few times.'" I try again... you have to say it FIVE TIMES to get through. The person on the other side had NO clue what I was talking about. None. They said "you will need to call a store manager." I do so to humor them... "oh um... yea I dunno." Walmart and belks are the exact same way. Where do I get this information from and how in the world do I build revolving credit to get more revolving credit so I can have some kind of future that involves a house... a car... a life?
Retailers partner with a separate bank to administer their credit card programs, so you'll be hard pressed to find anyone at the actual company that can answer these types of questions. Anyway, here's a brief article I wrote a few years back entitled "How to Start Building Credit from Scratch". Hopefully this will help a bit. You may need to get a secured credit card first. And then if you're going to eventually be a full-time student, you should really focus on a getting a student credit card. If you have a part-time job or a parent that will cosign, you shouldn't have any problem getting one of these cards after you pump up your credit score a bit. Then, as you said, use it sparingly for necessities, pay it off in full each month, and you'll see your credit scores improve after some time. Once that old collection falls off your credit reports in a few years, that should help your scores a lot as well.
