Credit Card to Improve Credit Rating ?
okay so i have bad credit. it was suggested to me that i get a credit card and make sure to pay the bills on time and then that would improve my credit. what do you guys think ? i have never had a credit card before.
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Absolutely. Get a Sears card, buy some tools every month, pay it off like clockwork.
If you can't get a sears card, go to your bank, pony up some money for a secured credit card. It will do the same thing. You'll need about $650.00 for a $500.00 limit, $1250.00 for $1000.00, etc.0 -
so how much do you think it will improve my score by and how long would it take ? apparently my score is like in the low 500's. 0 -
That I don't know. I would count on 6 months or so before you see any real change.
You should also pull your credit report, and find out why it's bad. Contact the guys with the bad reports, and see what you can do to remove it. Best case, it was a mistake, and they can report it as such. Second best case, you strike a deal, and they have to delete the trade reference, and it never happened.0 -
Deal in cash and dump your credit. You do not need it. Rent, don't buy a house, it is a bad "investment" no matter what way you look at it. Pay cash for cars, purchases, etc.
You'll die rich if you take this advice!0 -
Rent is the bad investment. The money you spend on rent is a total loss. If you put that money into a house it will appreciate over the long run. It sounds like you might just need to establish credit, not repair bad credit. If that is the case then it can also help to have a cell phone in your name. 0 -
If you are low 500's now, 12 months with a secured card, low balance and perfect payments may get you 580ish. Still a low score. You could always do like they did in the olden days.... PAY OFF YOUR BAD DEBTS. 0 -
You admit you have bad credit.
Whatever the reason.
Now you want a credit card?? [:0]0 -
Well , O.K. , lets see , I have (had) 'terrible" credit , thanks to some bad decisions and an (EX) wife ??? well , after two (2) years of paying bills (on time and always paying More than the Min.) and getting a few 'credit cards' in order to "improve my credit" , my credit score is just as bad as EVER !!! and I still cant do anything normal as per credit ??? Its all a scam ...
Geez !!!
d.a.stearns a.k.a. SKEEZIX
Gunsmith / LEO
Niota , Tn0 -
No it is not all a scam.
I have seen folks scores improve dramatically in a short period of time,......as in 12 months.
Something about paying your freakin bills seems to help it all!0 -
quote:Originally posted by sav99
If you are low 500's now, 12 months with a secured card, low balance and perfect payments may get you 580ish. Still a low score. You could always do like they did in the olden days.... PAY OFF YOUR BAD DEBTS.
i dont have any debts. the reason my credit was bad was because i was habitually late on my car payments but i always paid them. i am clear of the car now since i paid it off.0 -
quote:Originally posted by Civil Rights
quote:Originally posted by sav99
If you are low 500's now, 12 months with a secured card, low balance and perfect payments may get you 580ish. Still a low score. You could always do like they did in the olden days.... PAY OFF YOUR BAD DEBTS.
i dont have any debts. the reason my credit was bad was because i was habitually late on my car payments but i always paid them. i am clear of the car now since i paid it off.
Go with the secured card then, get as high of a credit limit as you can afford. ie. $1,000 limit, you will have to deposit $1k + about $350 in fees, + an annual fee. Always keep the balance below 50% of the credit limit. Make certain that all the payments are on time, without fail. With no outstanding collections you should see a score maybe around 600 after 12 months. Depending of course on how many 30's and 60's you had on the car loan. Low 500's score usually means a pretty colorful credit history. You may want to check to see if you don't have a collection or two that you are not aware of. Good luck.[:)]0 -
quote:Originally posted by abcguns2
Well , O.K. , lets see , I have (had) 'terrible" credit , thanks to some bad decisions and an (EX) wife ??? well , after two (2) years of paying bills (on time and always paying More than the Min.) and getting a few 'credit cards' in order to "improve my credit" , my credit score is just as bad as EVER !!! and I still cant do anything normal as per credit ??? Its all a scam ...
Geez !!!
d.a.stearns a.k.a. SKEEZIX
Gunsmith / LEO
Niota , Tn
If this true, and all your cards are not near the limit, with no late payments for two years your score should have gone up considerably. You can request a re-score from the big 3 if yours is lower than it should be. Start by getting a copy of your tri merge and check it for accuracy.0 -
I am an alcoholic. It was suggested to me that I buy a fifth of Jim Beam and only take one sip per day to improve my alcoholism. Do you think that will work? 0 -
quote:Originally posted by jimdeere
I am an alcoholic. It was suggested to me that I buy a fifth of Jim Beam and only take one sip per day to improve my alcoholism. Do you think that will work?
[:D][:D][:D]0 -
After my bankruptcy in 2004, I got a jillion "secured" card, and high annual fee card offers. I dumped them. I will not pay to use my own money. About a year later, I got an unsecured platinum Mastercard, with a $4G limit and no fees. I only use it for online and phone purchases.
If you must build your credit rating, a timely paying on a credit card is one way to do it. Cash is better.
Home ownership is over-rated. I have owned four homes, and live in #4. I lost serious money on all three previous homes, and will probably take a bath on this one as well. The main advantage to home ownership is you can do pretty much what you want with it without having to ask permission. You figure your TOTAL cost of ownership, including taxes every year, and mine are about $2,400, insurance, etc. and in most cases you have gained nothing. Most people just look at what they paid and what they sold it for and figure they made money.0 -
Totally wrong forum and site if you want to talk credit. Trust me.
I have learned a lot over at myfico.com which is the only website to check your REAL FICO scores and not an estimate of your scores. It costs money to see them, and they're only good for 30 days, because your scores change all the time. Don't trust a bank to tell you what your scores actually are without checking them for yourself. That would be the best possible thing you could do right now. Check your reports there or annualcreditreport.com for free. They just won't give you accurate scores. But you can look at your report there and check for errors.
Do not assume your credit report doesn't have errors right now that are dragging your score down. 90% of credit reports contain errors because nobody checks them for you. If you don't check and then write them to let them know of the errors, they will sit on your report your entire life, dragging your scores down
With a score in the low 500s, I can almost gurantee you won't be approved for an unsecured card. All banks are hurting very badly right now and are especially hurting their customers carrying balances that are stuck with them. So you definately don't want to be in that situation right now.
Some cards such as Orchard Bank and Capital One have low limit cards to give people with low scores another chance. Those are the only ones worth even trying for you and even at that would probably be a waste of a hard inquiry.
All in all, you need to use all different types of credit, 'responsibly', to keep your scores high. Income is not factored in at all because they don't know it.
Keep in mind, the FICO scoring system is rigged against you in that the alogorithm that factors your scores takes into account only 6 positive factors and 88 negative factors. It's designed for the big banks to drive your score down so you pay more interest over the course of your life. Learn how to play the game and play it well.
Good luck with your endeavors.0 -
quote:Originally posted by Civil Rights
i have never had a credit card before.
I missed the last part. They can be very dangerous. Especially now. You may think you're smart and completely responsible with credit by only making small purchases and making large payments.
They are designed for you to fail. So be very careful with them. Try to never carry a balance that you can't pay off in 1 to 3 months.
Everybody carrying balances right now is getting completely screwed because of how bad the banks are getting hit with all the defaults from mortgages to credit cards. They're not going to incur the hit. You the consumer are!
If you're carrying a balance, they have control over you and can change all the terms they like on a whim. They have no rules to live by. Some of them are even criminal and will sit on your check or delay even online payments so you're late ONE time. Then they can charge you their 39 dollar fee and jack your interest rates up to the default rate. So don't even think about waiting to the last minute to pay them. They live on those fees and default APRs and will do anything to slap you with them once you're carrying a balance that you can't pay down.
Really think about that before you rack up 10 grand on them. Maybe not over a year or two or three years. But over 5,6,7 years, it's very easy to build a ball of debt you can't pay off. Even using them a little bit.
You need to keep your scores up, but always remember how much more actual buying power you have with CASH as opposed to paying revolving interest on your purchases over time. Sometimes years.0 -
If you tell the CC card companies you don't need their money they will not leave you alone. Negotiate your interest. Borrow only if it is less than what you could make on it. Get a low rate for 3-6 months and transfer your billing to another card with lower or same rates. Usually after the teaser 3-6 month low rate they go up considerably. 0 -
quote:Originally posted by Civil Rights
okay so i have bad credit. it was suggested to me that i get a credit card and make sure to pay the bills on time and then that would improve my credit. what do you guys think ? i have never had a credit card before.
It works very well but it can be like opening Pandora's Box. Be careful.0 -
quote:Originally posted by nunn
If you must build your credit rating, a timely paying on a credit card is one way to do it. Cash is better.
Home ownership is over-rated.
Two points. Cash is not tracked, therefore paying in cash WILL NOT improve your credit rating. Credit rating, there is a connection you know.
Would you sooner pay xxxxx dollars a month rent out of your pocket and never see it again, or stand some reasonable chance of getting most of it back at a later date? You can throw yours away, I'll store mine in an equity account. The xxxxx is a relative amount, more in Marin County, CA, less in Tupelo, MS.
You're giving BAD advice to a youngster, David.
Clouder..0 -
If you always pay in cash, what does it matter what your credit rating is? Just askin'. 0 -
quote:Originally posted by jimdeere
If you always pay in cash, what does it matter what your credit rating is? Just askin'.
It doesn't matter. Same if you live by barter.
BUT, $190,000 cash is a little hard for some to come up with if you decide to buy a home. Even 35,000 for a new truck would give a few of us pause.
Clouder..0 -
I think there is a little confusion.. Assets is one determining factor that helps get credit. If one is drowning in debt and upside down credit companies will not even consider. Paying on time is another factor. If a weathly party pays bills late consistantly they will not get a low rate CC. Their credit score will also be low. 0 -
quote:Originally posted by select-fire
I think there is a little confusion.. Assets is one determining factor that helps get credit. If one is drowning in debt and upside down credit companies will not even consider. Paying on time is another factor. If a wealthy party pays bills late consistantly they will not get a low rate CC. Their credit score will also be low.
In fact it's worse to have high income and poor payment history. It shows even greater instability and irresposibility.0 -
Is a person/bank trying to sell you on a credit card and is saying your credit is bad? 0 -
I have said it before, and I'll say it again. Had I taken my original down payment, and put it in some solid mutual funds, and paid rent all these years, I would be money ahead. Way ahead.
Maybe some of you have done all right with real estate, but I have not, and I will not counsel anyone to buy when my experience has been negative.0 -
Do the old pyramid scheme. You simply barrow $300-500 from a family member, take that money and make a secured deposit account at a major bank and ask of a $300-500 secured loan. Wait one week and do the same with 2-3 other banks. After you make your first payment or 30 days later, you have a good rating. (may not be legal in some states) [:D] 0 -
quote:Originally posted by select-fire
I think there is a little confusion.. Assets is one determining factor that helps get credit. If one is drowning in debt and upside down credit companies will not even consider. Paying on time is another factor. If a weathly party pays bills late consistantly they will not get a low rate CC. Their credit score will also be low.
Getting credit and getting a low interest rate on that credit are two entirely different things. The banks will give out money to most anybody. They use the scores against people, rich and poor, to charge higher interest rates so you pay more over the course of the loan.
I got a guy at work that pays his card off every month, pays cash for vehicles and has never had a mortgage, in his mid 30s. He automatically thinks his credit is perfect. Without ever looking at his report. In reality, it CAN'T be. Not having car payment history, not having mortgage payment history hurts your score. It doesn't improve it. And who knows what he has for errors on his reports. I just checked mine a little while ago and I had positive items reported WRONG, that were hurting my score!
He will never look up his report because it would take effort. He will go to a bank someday to get a mortgage loan and believe whatever score they say he has and it could easily cost him 1-2% or more on his interest rate. Reguardless of assets.
This is why it's important. The major purchases that you borrow for. Even insurance companies are getting in on the act and checking credit history to help perceive risk drivers have. Low scores signal wreckless people and you will pay more in insurance. Even if you're rich and pay everything in cash. It's the world we live in now.0 -
After all those jingy commercials from free_credit report.com that charged people for a free service and made 300 million dollars, you can now access your credit history and score free once a year on this site:
http://www.ftc.gov/bcp/conline/pubs/credit/freereports.shtm0 -
Im a finace mgr for a major car dealer in the NW... bad credit can be repaired real easy....C.C do help with repairing your credit. But i have way to clear all your credit up in about 8 mos...even a BK....really i do....I will follow up soon with a post 0
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