Building Credit in a Year?

Watts · #1 (**permalink**) 03-25-2009, 05:17 PM

My father (I'm 21 remember) dabbled in real estate. During that time, he read a few books on the subject and did alright for himself.

In one of these books was a method to boost your credit. First, take out a $500 loan from a bank and buy a 6 month cd. Pay the interest on it for 6 months, then pay it off with the cd. After that, take out a $5,000 loan and do the same thing.

Apparently the book states that $500 and $5,000 are sufficient to give a boost to your credit rating and save you on interest rates in the future.

So, truth?

(Also, how much of a boost and why 6 months?)

User Name · #2 (**permalink**) 03-26-2009, 12:09 AM

Quote:

Originally Posted by Watts

My father (I'm 21 remember) dabbled in real estate. During that time, he read a few books on the subject and did alright for himself.

In one of these books was a method to boost your credit. First, take out a $500 loan from a bank and buy a 6 month cd. Pay the interest on it for 6 months, then pay it off with the cd. After that, take out a $5,000 loan and do the same thing.

Apparently the book states that $500 and $5,000 are sufficient to give a boost to your credit rating and save you on interest rates in the future.

So, truth?

(Also, how much of a boost and why 6 months?)

Good luck with that in this economy. How about the old fashion way. Stay out of debt. Use a credit card for monthly purchases and pay it off every month.

Watts · #3 (**permalink**) 03-28-2009, 09:33 PM

Quote:

Originally Posted by User Name

Good luck with that in this economy. How about the old fashion way(?) Stay out of debt. Use a credit card for monthly purchases and pay it off every month.

What does that have to do with the price of tea in China? Not all of us are looking to get out of debt...some of us have legitimate questions looking for legitimate answers.

So, since I think you just answered to spam your links on my thread, how about you prove me wrong and tell me why exactly a bad economy is going to change the way in which credit is created? If you're trying to say it will be harder to get a $500 or $5000 loan, or that the effects of this transaction would be lessened, then you missed the point of the question.

RenatoZ · #4 (**permalink**) 04-16-2009, 11:26 PM

Why not just take out additional credit cards and do not use them or use them every few months with a small purchase that you pay it off in full with the first statement just to keep the card active and entice the credit card company to increase your credit line and without a doubt your credit will definitely go up plus you do not have to hassle with banks, cd's, etc.

Maria · #5 (**permalink**) 05-14-2009, 06:10 PM

Yes, this is true, however how much of a boost depends on other factors that are particular to you.

agreenberg · #6 (**permalink**) 06-15-2009, 02:12 AM

My company helps you build your credit and get the computer you need, we do not run a credit check

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