Is it good or bad advice for a real estate broker to suggest getting a credit card for anyone trying to improve their credit score?
- curtisports2Lv 79 months ago
It's good advice only if followed properly. Getting a card does nothing. Using a card wisely is what helps. You use it instead of cash. You buy only what you can afford to pay fir in full each billing cycle, generally one month. Should you have to buy something you can't afford to pay in full, you will begin to pay interest. You must pay more than the minimum payment, which is mostly interest. You strive to keep the total amount of credit you are using below 10% of the credit limit on the card but you MUST keep it below 30% or having the card will hurt instead of help.
Over time, the wise use of a card does improve a score by doing three things:
1. It shows you are responsible
2. Your card limit will gradually increase, helping to keep your utilization rate (the 10%, 30% numbers I referred to) low.
3. The longer you keep accounts in good standing open, the higher your average account age gets.
- SumDudeLv 79 months ago
Generally good, unless the person cannot handle having credit / a credit card; so suggestion okay, but do not press the idea / action. P S The credit score will not rise quickly, so the house purchase would be delayed 2 or 3 years.
- StephenWeinsteinLv 79 months ago
Bad advice if they are trying to improve it soon. Good advice longer term. Applying for a new card lowers your score for a year (whether or not you get the card). But getting a new card can raise your score eventually.
- JudyLv 79 months ago
Could be either, depending on the buyer's current situation. If they have 6 cards already, bad advice, If they don;t have any, it's good.
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- USAFisnumber1Lv 79 months ago
The only way to get a CREDIT report is to get credit. Buy a car on credit and make payments. Buy a house on credit and make payments. Get a credit card, buy stuff and make payments. If you have never borrowed money and made payments then it is almost impossible to get a credit score since they have nothing to base it on.
- Mr. SmartypantsLv 79 months ago
I'm sure real estate people have a formal code of ethics, decided by some professional organization. I'd be curious to see what it says about that.
It's ironic that the way you develop a good credit rating is by going into debt! You can be deeply in debt, an unhealthy level of debt, but as long as you keep up with your payments you have a good credit rating. I don't think people should be encouraged to get into debt in the first place.
Also, I bought my house without ever having been in debt in my whole life. I had no credit rating at all because I'd never used credit! I wondered if it would even be possible! But my real estate guy explained that houses were different. If I put 20% down, I would for sure get the loan, because I couldn't abscond with the house so they could always take it back if they needed to. So clearly you don't have to go into debt to buy a house. Real estate people shouldn't imply that!
- 9 months ago
LOL. stay in your lane if you're a broker and not hand out advice please.