Building Credit - Posted by John

Posted by John on October 23, 2003 at 16:45:32:

Thanks, that sounds like a great idea but please clear up a few things:

  1. I open a savings account with $400 cash.
  2. A take out a loan with that account as collateral
  3. I open another savings account with the money just borrowed and then take another loan out using that account as collateral
  4. I go to a third bank, deposit that money into a savings account and take out another loan.
  5. I pay off the loans weekly using my checking account

Is this correct? Would it help any to do it with a larger amount of cash? Would it help to do it again a few more times? After I do it should I start taking out larger loans? Do you have any advice that would help me build credit faster once I get a credit card, other than using it occasionally and paying it off right away? Does it help to get multiple cards? My goal is only to be able to finance $75K - 100K (80-85%) on a multi-family investment property within a year or two and then take things from there.

I know these are a lot of questions but I am very serious about starting in real estate investment as soon as possible, and this is currently my only major obstacle.

Building Credit - Posted by John

Posted by John on October 22, 2003 at 15:47:42:

I’m 18 and in college and would like to begin investing in real estate withing a year or two. My credit rating is currently 0 since I’ve never had a credit card or applied for a loan other than student loans. How can I begin building my credit high enough that I will be able to get financing for my first (low cost) investment in the near future?

Re: Building Credit - Posted by Dimpil

Posted by Dimpil on October 22, 2003 at 19:46:24:

Have you gotten your student loans? If yes you have a rating are building credit and have credit. Go to and have all 3 scores pulled and see your score.

Re: Building Credit - Posted by dewin

Posted by dewin on October 23, 2003 at 24:34:59:

To work this plan you need at least $400 to begin. You should borrow this from your friends if necessary. Then go to a bank of your choice and deposit the $400 into a regular passbook savings account.

Wait a few days for the account to be posted and return to the bank to ask for a $400 loan - you offer the passbook as collateral. Since the bank is already holding your $400, you go to another bank open a savings account lending you another $400 and they won’t even make a credit check. Then, with your borrowed $400, you go to another bank, open a savings account, return a few days later, borrow $400 from that bank using your passbook as collateral.

Then repeat the process at a third bank with your borrowed $400. Wait a few days to go to a fourth bank where you open this time a CHECKING account. Wait a few days and make a payment on each of the other three loans. A week later, make payments again on the three loans, and continue paying each week until you have almost paid off the balance.

A credit investigation at this point will show you with three active bank loans (which are considered hard to get), a checking account, and a paying history for the three bank loans - with you having paid up in advance. Thus, you have AAA credit in as little as 30 days. From here you go on to apply for loans, credit cards, and other items on credit.

that doesnt mean getting 5-10 credit cards and going on a shoping spree, if you serious about investing, be very very serious about your credit