Improving Credit Report By using Credit Cards?

Question

Right now, my credit is pretty horrible. I have alot of late payments and, after paying off two credit cards, they are now closed. I also have a closed credit card account that was charged off. So I have no open accounts on major credit cards. Which, frankly, works good for me. But to improve my credit report, I need to be using and paying for a credit card. This is my question: I do have an open account with a clothing catalog and Sears. If I charge something to them and then pay it off, will that be just as beneficial?? Or would it be a waste of time and effort? If I apply for a credit card, it will mean additional requests for my credit report, and they will probably turn me down.

In spite of the late payments and account that was charged off, 'no active revolving accounts' is showing up as my BIGGEST problem!!!

Answer 1

I had the same exact problem! "Lack of revolving charge accounts". Here's what you do:

In order to build good credit you need to start building a good history. You need to partner with companies that will report to all three (3) credit bureaus, but won’t pull your credit. Crown Jewelers is a great company that will give you a small credit line and report to all three (3) credit bureaus. Easy approval.

http://www.crownjewelers.com/

Second, open a secured credit card. New Millenium Bank is an excellent choice. They won’t check your credit and report to all three (3) credit bureaus. You can even pay your bill online.

http://www.nmbonline.com/

Be sure to keep your balance –to- credit limit ratio low. Never miss a payment. Before you know it you will be on your way to better credit.

Answer 2

Your Sears account is a revolving account. If your credit report shows no active accounts, you probably haven't used the Sears card in years. Using it and then paying it off will show up positively on your credit. The funny thing is using the card, but carrying a small balance and making payments on time improves your credit rating faster than paying it off in full every month. You do need to make sure though, that your balance never exceeds 50% of the available credit. If the balance exceeds 50%, that reflects negatively on your credit.

Answer 3

Can of worms... Look me up I have some great references to go by for credit as I am in the mortgage industry and my credit is not good also. get a card no matter what you do, do not charge over 40% of the total credit line. EVER! in one month. The balance should never go over the 40% level either. When you want to pay the minimum, ok pay the minimum plus $1.00. The system does not know (right now) if you have paid one dollar of one hundred, but it counts as a good mark. The last thing I will say is get a copy of your report and make SURE THAT THE CREDITOR is reporting your credit limit correctly along with your balance

Answer 4

I think you may be putting too much emphasis on credit cards as a way to improve your credit. That might backfire. If your credit history is "pretty horrible", you may expect to have some very high APR's along with the next cards "offered" to you. I wouldn't go that route to restore your credit. You may get yourself into a trap--just think if you pay minimum pmts on a $3000 maxed out card, it would take you 40 yrs to pay it off. I'd maintain one major CC and maybe one retail card, but no more than that. Do you have any history of auto payments or a mortgage? You should talk to a financial counselor. Usually the first appointment is free. Maybe they can give you some more options on how to build up your credit.

Answer 5

I read a bunch of conflicting information on how this works so I can only offer my personal experience... My credit card balances are updated once per month. The balances reported to the bureaus are the balances on my statement BEFORE I make payment. If I max out my card, the credit card company sends me the bill and I pay in full, according to the credit bureau that card is still maxed out. It will remain that way until the cc company reports again the next month. My score will suffer even though I have a zero balance. If I go online and make a payment the day before the statement date, the balance reported to the bureau is zero.

Answer 6

No, it is highly unlikely that it will help. The best way to boost your credit score is to eliminate as much debt as possible, and remove as many credit cards as you can. It will take a long time no matter what to improve your credit score after late payments.

Answer 7

It seems that you are in a messy situation. But getting a new credit card in such a situation will be very difficult. I would suggest you to use your sears.