If I've never had a credit card, what's my credit rating?
This should help you to understand how credit scores work.. FICO scores from 300 to 850 and Vantage Plus scores from 501 to 990. Here is the breakdown for both systems. Vantage Plus system scores from 501-990. A-901-990 B-801-900 C-701-800 D-601-700 F-501-600 FICO system scores from 300-850. Elite-740-& up Prime-700-739 Preferred-660-699 Standard-625-659 Sub-prime-624-& under FICO is the only one that matters since it's the one that all major lenders look at. So as you can see it depends on if your looking at a true FICO score or a Vantage plus score. As far as what makes up credit scores it's the following; 1. Payment history (longer the better) 35% 2. Time in bureau (longer the better) 15% 3. Types of credit (mix of credit cards & installment loans) 10% 4. New credit (new accounts and inquiries) 10% 5. Debt to credit ratio (lower the better) 30% So as you can see credit is based on opening and paying accounts. So without that you would have no score at all. Good luck.
Where can I ask about my credit if I've never used it before and I suspect someone else has been affecting my credit score?
You may pull your own credit reports annually at no cost from a website established by Federal Law. Be wary of the three credit reporting agencies as they will attempt to sell you services you neither need nor will benefit you.The website is: annualcreditreport.com. Below is what you will see when you access the site.
If I have a new active credit card but never use it for years, how is my credit score reported?
It will show an open paid account on your credit which will help your score a little bit. credit card companies, however, will not usually keep the account open for very long without any usage on your part and you will find the account has been closed for no activity. Credit card companies like to see that you have the ability to charge and pay back in a timely and responsible manner. Keep your balance(s) at no more than 30% of your total available credit, so if you had a card with a $1000 limit you would want to keep the running balance at no more than 30%, or $300. Now, if you wanted to max it out and pay it off all within the same 30 days that's ok too. It's just the running balance carried from month to month that needs to stay at 30%, or less, (but not zero) in order to achieve the best credit ratings. It really is a science.
Would it be smart to open a credit card.....?
If you never use it then it won't factor into your scores and eventually it will be closed by the creditor. You might use it every few months for something you normally purchase, like $10 in gas, and then pay in full when you get the statement. Or you might use it to pay a bill that you pay monthly, for example your electric bill. Then use the money you have set aside for that bill to pay the credit card off. Just make sure whichever bill you pay does not charge a fee for accepting a payment by credit card. Using the card for something you already have money earmarked for, and then using that money to fully pay the card, will keep your card active and build your credit. Plus, if it is a rewards card you will be building points. Always pay the card in full. "Never" float the bill thinking that since it's on the card you might let it slide and go buy something else with the earmarked money, thinking you will make it up later. That's an extremely bad habit to get into.
Which credit cards should I never apply for and why?
Don't apply for credit cards you can't afford.If paying $450 in annual membership fees for a credit card like the American Express Platinum card involves spending more than one hour of your earnings, don't do it.If you need to pay $150 for a card that racks up airline miles, but you can't afford to travel, don't do it.Stick to the cards that make sense for you. Personally, paying annual dues is anathema to my financial sensibilities and I avoid it like the plague.I use my credit cards for business and I get about $3–5K in hotel nights, perks, refunds, and credits each year. While the benefits are relatively trivial, the pursuit of the points can sometimes be an entertaining game in itself.Otherwise, watch how many credit cards you get in total. Going above 5 cards is just cumbersome and having too many credit cards would tend to hold down your credit score. Likewise, watch out about having too many store cards as they can have the same detrimental effect on your credit score. Plus, they tend to attract a ton of direct marketing from the stores (if they're doing their job with the store credit card accounts) to make you spend more and more often than you should.
I’m 16 years old and have never had a credit card. Do I need to worry about the Equifax breach?
Thank you for requesting my answer.Congrats on wanting to get a credit card…just be sure to protect your name. Unfortunately some people today like to steal identities so yo need to be careful where yo use it, who yo give the numbers to where buying something, trust where yo go and use it.I would recommend even if yo are just starting to build yor credit, call the credit bureaus and let them put a note in your file that if anything is purchased with your name, that yo want a phone call before it is approved, if they can send you as well an email for anything that uses yor name and credit, would be good.Most important when having a credit card is what you spend ensure yo can pay for it before your next billing. Why? So that you do not find yourself in debt with things that you couldn't afford.A credit card should be used only when you know yo can pay it back. If not yo will pay so much interest and it will come up to so much more than your original purchase price was. This is all to avoid debt that people have that they cant pay back. Banks and credit card companies love these people…they want you to buy when you want and pay when you can so that THEY MAKE MONEY! Banks and Credit card companies are in the business of making money from people who cannot take care and spend well.I hope this helps!
If I don't use my credit card at all will I still be charged any interest or APR?
The interest is applied towards the outstanding balance. If the balance is a zero, then the interest is that balance (zero) times interest rate will still be a zero.However, you're asking a very interesting question - will YOU be charged interest or any kind of penalty, and this is something only you can find the answer to.Why is that? That's because, depending on the card you have, and your contract with that financial institution, there could be a clause which imposes penalties for non-use (weirder things had happened, trust me), and if you are not using your card at all (ever), then there could be another clause which will allow the bank/issuing institution to cancel your account completely - and signing these clauses/terms of use means that you agree to them.I suggest that you call your bank (back of the card) and ask them all these questions. If you don't like answers they give you, you should re-think your banking needs.
I'm 26 and I've never had a credit card, why some people depend a lot on them?
Used properly they enhance your credit greatly. You don't have to carry cash. They are much more secure - protective - then a debit card as a consumer. That said my oldest son got a credit card at age 17 (with me cosigning) he is now 28 and has a home of his own thanks in part to having a good credit score. My 19 year old has 2 one with me for school costs and another with just him on the card. My 17 year old should be getting one this coming week with me as a cosigner. Now the ones I get my minors have small credit limits of $500. It is so they can get a flat tire repaired, emergency type situations and everyday stuff like buying gas. I use them to teach them how to use credit effectively. Later as they get in college I'll increase the limit to about $2,000 for books, fees, etc. Easier than transferring money back and forth. They will then get a card of their own for their own use of about $500 that they are personally responsible for.
I've never owned a credit card. Will this negatively affect my credit score?
You don’t have to have a credit card - you just need some sort of credit. Maybe you had a student loan, credit builder account, as offered by Self Lender and other companies? Maybe your rental payments even reported to the credit bureaus? Any of these things help build credit.With that said, it’s good to have a mix of credit, and so having credit cards does help. Always pay on time, and keep your balance on the card below 30% of your credit limit.If you are brand new to credit, i.e. don’t have any credit accounts, then secured credit cards are an affordable, simple way to start building credit. More generally, here is information around building a credit score.