when you have bad credit , whats the best thing that you can do?

Question

i dont have good credit, so i cant get a credit card unless i pay some outragous interest.. what are some other ways to establish good credit

Answer 1

Best thing you can do is establish at least 2 revolving accounts and pay them on time. Hard I know if you don't have good credit! But guess what, you can do it. One way is to get a secured credit card. Keep the balance low (can't emphasize that enough) and pay it off EVERY month. Second is to contact a place like crownjewelers.com, which gives almost anyone a small line of credit. The point is that they report to all 3 credit bureaus, and that's what you want. Do that for 12-18 months and it will make a big difference in your score.

Beware of those that say 'pay your bills on time'. Most bill companies don't report to credit bureaus. Also, loans like an auto loan don't help as much because everyone pays for their car - they have to get to work. Managing credit cards, however, shows discipline...since you have to tell yourself 'no' when you can usually just put something on the card.

Answer 2

if there is an outrageous interest credit card, just make sure u pay off the full balance each month. A great great great and very great way to improve your credit is have someone with really good credit help u get a credit card using his/her cosign name. The credit card will be issued in your name but the creditor will go after the cosigner in case u default or does not pay your credit card. The card will be under your name, the interest will be alot lower...most important of all, make sure u pay the monthly credit card bill on time. Eventually your credit will improve dramatically after a couple of years.

Answer 3

Look into getting a secured credit card. You send them a payment and they hold it as security, and usually give you a credit line of that amount. Charge something small every month, and pay the balance off in full every month. After you've used the card responsibly and kept the account in good standing for a few years, they will unsecure the card and refund your security payment.

As far as interest goes, all credit cards charge relatively high interest. That's why if you get one, you should never charge more on it than you can pay off that same month, or you can get into trouble fast. If you have the self-discipline to use the secured card as a credit building tool, and NOT use it as 'free money', a credit card can be a good tool to help you improve your credit score & make you eligible for better interest rates on major purchases like a home & car in the future.

Good luck!

Answer 4

If you feel that you can control your spending, it's OK to open a new account, even if the interest is high. Use the card every month, but don't charge more than you can pay in a month. I had credit problems several years ago and used a card targeted towards people with bad credit to help establish a positive account. I used the card every month for small purchases, like gas or groceries, and paid it in full every month. Gradually, my credit line was increased and my interest rate was lowered. The interest rate is now comparable to other accounts and I have kept this account as my emergency card.

Here is a link to some cards that are targeted towards people with bad credit: http://www.creditcards.com/bad-credit.php

Answer 5

Bad credit is one of the worst problems to have... however there exists a solution.

I will hereby talk from my personal experience.

I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is astraight to the point ebook with question and answer I found :

http://umgarticles.atspace.com/debt-consolidation.htm

if it helps kindly remember me in your voting!.. cheers!

Answer 6

If you can establish a credit card with a 500.00 max. usually you have that money in an account - so it works like a debit but will acrue credit.