How do I begin to rebuild my credit? I have a few things on my credit that has been written off.?

Question

I have applied for a few credit cards and been turned down, so I'm scared to keep appling because I know it's hurting my credit also. Please give me some suggestions.

Answer 1

The first thing you need to do is get a copy of your credit report. You're entitled to one free per year from each of companies, so that means you can get a free one every four months if you plan it right. You're also entitled to a free credit report from the reporting company that the card issuer used every time that you get turned down.

Make sure that everything is in order. Names (I was married over a year before my married name was on a credit report), addresses, accounts, limits. Correct anything that's wrong. For example, Capital One is known to report credit limits as $0, so your ratio of debt to credit limits gets skewed, making it look like you owe more than you can borrow. (Their excuse is that they consider your credit limit proprietary information, that could tell their competitors how they determine your credit limit in relation to your credit score.)

Keep making on time payments. That's got to be the #1 thing.

Then remember that if you make minimum payments on everything, it takes like 40 years to pay off a big credit card debt. Put as much as you can into the card with the highest interest. (Exception to this is if you have a card you can pay off in a few months.) Once the first debt is paid off, use the money you'd pay to that and add it to the payment of next highest.

Do not close any accounts. It's better to leave it at $0 owed than to close it. Even if you decide to chop up cards to not get in debt, it's best not to close the accounts because having accounts for a longer period of time increases your score.

Of course, all those things are assuming that you have debt, which at this case you may not if it's been written off. In that case, do a search for high risk cards. There are a number of companies that specialize in giving credit cards to people who can't get them from other places, for a price- namely, higher interest rates.

Alternately, you can get a secured credit card (you give them a deposit equal to the credit limit you'll get) for as little as $250 or finance something relatively small like a piece of furniture. (Probably not Ikea, though, they turned me down and I have pretty good credit, just not a long enough credit history.)

Don't forget, though, PAY ON TIME. Using the internet to pay is normally a very good idea. No checks lost in the mail, no having to mail your payment a week before the due date. Just log on the weekday before, and it's on time.

Typically, I go to the web interface for my credit cards when I get a statement (they email me when they send it too, so I know it's out before it arrives at my house). On the day the statement is sent, I make the minimum payment. That means that even if I don't think about it again until they email me again, I've still made an on time payment. Then later in the month, normally after a paycheck, I make a further payment to each of them based on my long term debt reduction plan.

This long term plan is basically to pay the most toward the Visa card that I have and a lesser amount (but at least $100) toward the store card I have at Best Buy. The Visa card will help more in financial emergencies, so it's a higher priority.

Remember, your FICO score is based on:
* 35%, punctuality of payment in the past
* 30%, the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
* 15%, length of credit history
* 10%, types of credit used (installment, revolving, consumer finance)
* 10%, recent search for credit and/or amount of credit obtained recently

Answer 2

PIGGYBACKING: Despite its' virtually
unlimited potential, piggybacking is
not used by nearly as many consumers as
it should be. It's easy, effective,
and extremely fast. Unfortunately,
it's mostly used among parents and
siblings while those who can really
benefit stay in the dark.

How it works. Almost every credit
card or credit account will allow the
primary account holder to add on (at a
later date) what's known as an
"Authorized User" or "Secondary Account
Holder". In most cases, when this is
done, the entire account history
(retroactively) gets posted to the
authorized users credit report
regardless of their current age or
credit history!

For example. If it's a credit card
with a $10,000 limit which has been
paid as agreed for the last 10 years,
then that complete history will be
posted to the authorized users' credit
report. I once saw a clients' credit
report who used this technique with his
mother. He was only 24 at the time and
he had a $15,000 Gold credit card on
his report with history going back 11
years! I laughed as I thought to
myself that this kid would have had to
be approved when he was 13 years old
for this account to be his!

As you can see, this strategy is
usually only used by parents and their
children and in most cases with no
regard to the benefits the children are
reaping credit wise! In fact, in
recent years, due to its'
effectiveness, this technique has led
individuals with excellent credit
scores to "rent out" authorized user
accounts on one or even multiple credit
cards in return for a fee! I once
recall seeing an ad in USA TODAY for
just such an opportunity. Like most
good credit loopholes, I'm sure this
methods' days are numbered much like
what may be the case with...

For more information on the CREDIT
SECRETS BIBLE you may visit:

http://gaby1221.niesong.hop.clickbank.net
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Answer 3

most mortgage companies have someone there to help wth credit free of charge. thats what i did. basically they told me to pay my collections and see if my bank would give me another car loan to close my current car loan account. that is to build the credit.