3 Credit Card Tips for Those with Little to No Credit!

Getting started in the world of credit seems like an uninviting cycle where you need to already have credit to even start building your credit. Good credit is required for so many decisions we make in life such as taking out a mortgage, buying a car, obtaining low-interest credit cards, and even renting an apartment.

Here is a short guide of steps, tips, and tricks to follow to begin establishing your credit.

1) Get Added as an Authorized User on Someone’s Credit Card.

If you have a financially responsible family member with credit cards that are in good standing and have a low accumulated balance, they can add you as an authorized user on their card. As an authorized user, you will obtain credit even if you never use the card! You just want to make sure that the owner of the credit card will be in good standing for the time to come - if they miss payments or rack up too much debt, this will show up on your credit!

2) Get Pre-Qualified for Credit Cards Online.

In 2019, we are able to see if we are likely to qualify for something based off of a soft-pull of our credit report. This will not count as an inquiry for future lenders to see. Before entering your information - you typically want to make sure it says that there will be no impact to your credit score somewhere on the website.

After you fill out the qualification application, it will typically provide a list of realistic credit cards you are pre-qualified for. Select the one with the best approval odds, but also the best features. You will want a lower APR and either a no-or-low annual fee.

Click here for the pre-qualification form on creditcards.com.

3) Get a Secured, Student, or Starter Credit Card!

• Secured Card: A secured card is a credit card that typically requires a down payment as collateral for you to obtain and use the card. It can be as low as $49 and be as high as the balance they allow you to have. Example, for a $300 limit - they may require a $300 deposit. This deposit is usually refundable if you cancel your credit card while it is in good standing.

  Capital One Secured Card is a good card to start with. The annual fee is $0 and security deposit for no credit is usually $49 and for bad credit it can go higher.

  Click here for a list of other secured cards you might qualify for.

• Student Card: If you are enrolled in college, you are typically eligible for some student credit cards. These offer relatively low fees and interest rates for students. They can even offer other incentives if you have good grades!

  Discover Card has a great credit card for college students.

• Starter Card: These types of cards typically don’t require any previous credit history. They sometimes can have higher annual fees and interest rates with a low starting credit limit. A higher credit limit does help impact your score.

  Check out Petal Card, they market towards those with no credit and have a great rate and no fees.
  

Should I Rent Or Buy A Home? Check Out These Pros & Cons!

Buying vs. Renting

Thinking about your next move can be a big step! Most of the time it comes down to signing a one year lease or taking out a thirty year mortgage. Renting is a lot less of commitment, but many do not like the idea of dishing out rent each month with no financial return in their monthly payments whereas in a mortgage you are likely building equity. However, homeownership is not always a smooth ride. Below we will go over the pros and cons of both buying and renting!

Buying

Pros:

• Can make desired improvements/upgrades

• Possible increase in equity due to improvements and raising property value

• No landlord to impose rules (single/multi family homes)

• Possible tax breaks when filing returns

• Can rent out property in future for additional income

Cons:

• Possible decrease in declining property value

• Requires 3.5-20% of home cost as down payment

• Other expenses besides mortgage and utilities

• Responsible for any repairs, remodeling costs

Renting

Pros:

• Initial deposit is less than most homes

• Usually a short commitment to pay rent

• Not responsible for maintenance and repairs

• No property tax bills

• Less possible homeownership expenses

Cons:

• Landlord can increase rent every year

• Landlord can limit smokers, pets, and household members

• Might move more often

• Can be forced to move with 30 days notice

• Cannot build equity

• No tax benefits

Why should you buy a home?

It could be a smart investment to buy a home if the property value in your area appears to be on the rise. If you were to sell in a few years, there is a possibility you could see a sizable profit - but like most other investments, it is not something to rely on. A few reasons that buying might be the right the option for you:

• You plan to stay in the same place for at least 2-5 years.

• The rent you could get for a home in your area would pay for your mortgage and expenses.

• Mortgage rates are low enough to keep your monthly mortgage payment affordable.

• You’re willing to put some “sweat equity” into your purchase, that way you can purchase something less pricey.

Should you rent a home instead?

Even though owning your own home offers more security and a lot of benefits, there are some drawbacks. Bigger construction projects like roof replacements and siding can come up quick. It is much easier to get out of a lease than to sell your house. Here are some reasons why you might want to rent:

• You aren’t sure how long you will want to be in a specific area due to work, family, or other reasons.

• You won’t be able to afford — or don’t want to bother with — the maintenance or repairs a house may need.

• Your finances are variable or likely to change soon, potentially making it difficult to keep up with a mortgage payment.

• You want to be in a living situation that is more flexible.

Four Tips to Keep in Mind Before Buying A House

Whether you are buying your first home, looking to upgrade, or downsizing here are four important tips to consider when you begin your search!

1) Know What Kind of Market You Are In

Your local market will determine how much negotiation room you may or may not have in your next real estate deal. In a market with a high inventory and low demand, it is likely for more properties to remain for sale longer than a seller would like. This will give you leverage in your negotiations. However, if there is low inventory with a high demand, you may find yourself offering above the asking price and getting beat out. You may have to be prepared to act quickly in this situation. It is important to have a real estate agent advise you on these possible scenarios.

2) Get a Pre-Approval Before You Attend Showings

Mortgage lender have a process of calculating your debt-to-income ratio as well as other income and credit factors. If you are obtaining a mortgage, it is best to talk to a mortgage lender to determine and understand the maximum purchase price you can be approved for. This pre-approval will be submitted with any offers that you may make on a property.

3) Retain a Buyer’s Agent to Represent you

It is important to note that it is very likely that retaining an agent to represent you as a buyer of real property won’t cost you a penny. Generally both real estate agents are paid by the seller and their agent, making your representation as a buyer a zero cost process. In these types of deals, it is wise to have a licensed agent representing your best interests.

4) Don’t be afraid to ask your real estate agent questions

Your real estate agent is there to help and advise you in the process of purchasing real property and should be okay with walking you through every step of the way if needed. Buying a home is a big step, process, and commitment, so you want to make sure you are fully prepared and confident in your representation.