Credit Cards Key » CreditCardsKey » Credit Card Calculator » Do you start at the bottom or top when you start your credit history..?

  #1 (permalink)
: Hi Guys,

I'm foreign and don't have a credit history yet. We have furniture from Aaron's Rent To Own(which report after six months to the credit bureaus) and I'm a second user on my wife's Walmart Credit Card. I would like to know for the future(in six months) when i want to buy a new car, will my credit score start at the top or bottom as soon as they start reporting my payment etc against my name and social security number? If not, how long does it take for me to be able to buy a car and have loans against my name? Will this Walmart CC and Aaron's help me at least?

Thanks. Every situatin is different and I understand it. i'm just looking or a general guideline.

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  #2 (permalink)
: If you are renting furniture for more than 6 months - that is a horrible deal.
Do you know you can easily (very easily) pay 3 times as much for furniture.
Take it back and buy some furniture at a cheap store.

The credit card alone as a joint user will establish great credit.
Just give it time - 1 or 2 years.
Note: Please, please make sure this credit card is paid in full each month.
By carrying balances you could be causing much more harm than good.

47% of Americans pay their credit cards in full each month.
They have the top scores - be one of them !
Balances are likely to only reduce your rating - especially if you use more than 30% of your available credit limits.

Conclusion: Take the furniture back to Aarons.
I also read in Credit Score Calculator
Store financing will actually lower a good credit score.
It is considered something the "subprime" group does.
After at least one year - see if you can get that car - and put plenty down.
Get your credit reports once a year at
Annual Credit
Never get scammed into paying for them.
Also, don't get conned into leasing a car - they will try their best to scam you into this deal.
Buy the car so you can own it someday...
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  #3 (permalink)
: You start at neither bottom or top. You start with "no scores" meaning no credit scores can be calculated because of no data.

The Aaron's credit is "NON-prime" credit which is low quality credit, and will be a light anchor to her scores until it falls off the credit reports after 7 years from final payment.

I'd have to know who the "issuing bank" is on the Walmart card if there is one, and the credit limit to know how its affecting scores and the quality of the credit..

"Second user" is not proper credit language. There is either "authorized user" or "joint authorized user". You want to be the latter if payment history is perfect--never 30+ days late. You will need a social security or other 9-digit number associated with only you to start your credit history with and this will be needed to be a "joint user" of a credit card.

Walmart is probably but not definitely preferable credit to Aaron's in terms of quality.

This is true:
Older credit cards are better than new ones
Higher credit limit is better for
Low or no balance is better for scores
Going close to credit limit and then paying off is better for scores, but can cost interest
Using a card every 3 months keeps scores higher generally but should not be done within 60 days of needing your credit like a car loan.
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  #4 (permalink)
: You have to build your credit score from 0.

I am very surprised that Aaron's reports to the credit bureau after 6 months. You might want to re-read that contract. Normally rent to own places don't report at all. You are also paying about 5 times what that furniture is actually worth. Rent to own places typically recover their costs within the first 3 months or so.

In any case, you will still have a very limited credti history at the end of 6 months, even if your spouse has a long history on that credit card that you are now an authorized user. You may have problems qualifying for a car loan.
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  #5 (permalink)
: You should have no problem. Credit doesn't start at the top or the bottom, it's a bit more complicated than that. The less credit history you have the less money banks will want to lend to you. So you might not be able to buy an expensive car, and whatever you get will have higher interest than if you had a longer credit history.

However, speaking as somebody with HORRIBLE credit I will say it is much, MUCH easier to work off of no history than bad history. 6 months of credit history probably isn't enough to establish credit to deem you not a risk for an auto loan, but it also depends how much you are borrowing from this rent to own business. The more, the better your credit will be, (assuming you are not late at all on any payments).

You should look into getting a secured credit card. You put a down payment and it works just like a credit card. After about 18 months of good payment history they will usually make your card an unsecured card, meaning you'll be credited back your deposit. The 2 top rated secured cards according to Consumer Reports, a popular consumer rating magazine are Citi Bank secured cards, and Orchard Bank secured cards. They rated Citi the best, but I personally haven't used them but have used Orchard and it helped me re-establish good credit after a bankruptcy very quickly. I believe the minimum down payment on both is $200, but I'm not positive on that. Below are links to both of these secured cards.

If you do both the secured card AND rent to own that should really help you establish good credit. Just remember to pay early and don't be late even once or you won't be gaining good credit history. Even 1 day late will put a red mark on your credit, so pay early and pay the entire bill, not just the minimum payment.
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  #6 (permalink)
: Neither. It will be somewhere in between.

Your credit will not be at the top because you have to have credit for several years before it can be at the top.

Your credit will not be at the bottom either, because simply having credit without having anything bad (such as missed payments, foreclosures, etc.) is enough to keep your credit from being at the bottom.
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