Monday, October 13, 2008

How to Rebuilding Credit Card History?

Did you know how to Rebuilding Credit History?

There are several ways one can rebuild their credit history or if they want to get their first credit card:

1. Check the credit report: Contact all three credit bureaus and get a credit report from them. Federal law entitles you to get one free report from each of the three major bureaus once a year. One can order reports by calling 877-322-8228 or by visiting www.Annuaalcreditreport.com. Once receiving the report see if there are any errors, outdated information, or if you are a victim of identity theft. If so, one has to clear them up before applying for new accounts.

2. Checking and Savings Account: Set up checking and savings accounts. Usually, lenders see these accounts as a sign of stability. Make sure that you don’t bounce any checks.

3. Apply for the right credit card: Get a right credit card for your situation. For example, if one is a college student who has no credit history, if will be difficult to get a Visa or Mastercard. One can apply for Amex cards, but they usually charge a fee. However, one can start a credit history started this way. Sometimes they wave their fees for the first year. Whatever the case, don’t go overboard. Limit yourself with not more than one or two cards.

4. See if someone could co-sign: One can build the credit faster if one can convince someone with good credit history to add you as an “authorized” or joint user on a credit card. But this has a draw back that if for any reason the person who sponsors defaults payments, your credit history will be also tarnished.

5. Get a installment loan: For someone to have a good credit history, one should have both revolving accounts (eg: credit cards, lines of credit) and installment accounts (eg: auto loans, personal loans, mortgages). If one opts for a loan, make a large down payment so one can refinance in a year or so when their credit has improved.

6. Safe guard your credit: One has to use the card regularly to generate a credit score. Don’t charge more than you can pay off each month or 30% of the card’s limit. Pay all your bills on time, all the time. Don’t take too many cards or loans, a few accounts is enough to build a good score.

2 comments:

Anonymous said...

Hi! I came across your blog recently and found it quite interesting. Keeping a good credit score is very important, especially when trying to secure a student loan.

I intern for SimpleTuition.com, an online student loan comparison tool that allows borrowers to see customized loan details before applying. We also have a great resource center with many articles on related subjects.

Specifically, this article on building and protecting your credit history could be very beneficial to your readers.

http://www.simpletuition.com/resource/students/during-school/credit-history-loans/

Thanks again for the great content!

national debt relief said...

People don't know how important is to follow up your credit situation. Some people think they have perfect credit until the moment they need to apply for a car or a home loan.
Is better to be well prepared and check constantly your credit reports.