How can I raise my credit rating?

Question

I was turned down for a small business loan.

I have less than $1,000 in debt:
My car will be paid off this month. I have no credit cards.
My credit line w/ the bank is maxed at $500

What should I do?

Answer 1

You first have to bring down the $500 credit line. Then you have a couple of credit cards which you have to USE. If you can be responsible use them to even buy groceries, car insurance, utility bills and whatever and pay them off each month.

Another thing you can do is get a secured loan from the bank. Say you have a $1000 dollars in the bank. That amount will be frozen but released each month in increments equal to your monthly payment on the loan. Now if they charge 18% interest it will cost you $180 but you will have a credit reference. Then you go to the same bank and get an unsecured loan. Now you have two and a relationship and a track record with the bank.

And if you have not done so check your credit report as I did recently.
- I found that since I hadn't opened any new lines of credit in some time the last reported income amount was for when I made $55,000 dollars a year not the almost double that as now.
-There was silly stuff like a "no pay" for a $38.00 charge at the dentist that insurance was supposed to take care of.
-Some old store cards that I closed years ago were still showing as open.
-And lastly (but not all) the credit card company that I have used for years and have a huge limit with had reported be as being months delinquent 2 years ago. I called and they apologized for the mistake.

Even though I had decent credit when I took care of even the little things my score jumped big time. Getting a better score just takes time.

Answer 2

Aries is correct. It sounds like you just dont have the credit history to validate giving you credit. Its an ugly catch 22.

However, once you get a credit card, do NOT pay it completely off every month. You will want to hold a balance on the card. Even if its a dollar that remains. A lot of cc companies will not report your credit if you do not carry a balance. You will show an active account, but it will not be updated unless you petition the credit agencies to get the information. Dont let it get maxxed though, thats worse than a 0 balance.

Answer 3

Where is your debt if you don't have any credit cards?

Do you know what your credit score is? It may be that you don't have sufficient credit experience for the bank to give you a loan - especially a small business loan (because your source of income is dependent on you, not a paycheck).

You'll want to find out exactly what's on your credit file - and it'll take time to fix. You'll want to get a credit card, use it and pay it off every month to start a worthwhile credit history.

We'll need some more details - meanwhile if you want to start a business you should check out some private investors for venture capital!

Answer 4

For many Americans who are looking into paying for that dream house or that new set of wheels, one of the most important things to consider before filing a loan is their credit report. The truth of the matter is many people are aware that could now get a free credit report. However, only a small number of them know how to obtain one.

As opposed to what a lot of people probably think, getting a free credit report is actually a cakewalk. Gone are the days when consumers would have to wait in line or spend hours on the phone before they can get a hold of their credit report. With the technological advantage of Internet, one can gain access to his credit report just by a few keystrokes and mouse clicks. Best of all, these credit reports come for free -- a privilege granted by the US government to every consumer.

The accessibility of credit reports is made possible by the Fair and Accurate Credit Transactions Act (FACT), a bill which was passed on December 4, 2003 by the US Congress. This act, which is sanctioned by the Federal Trade Commission or FTC, allows every consumer to obtain a free credit report once in a period of twelve months. Similarly, the FACT also ensures the privacy and accuracy of the information that the various credit reporting companies hold. Under this act, the FTC, together with the three credit reporting companies namely Experian, TransUnion, and Equifax, have set up a website where people can log on to check out their annual credit scores.
Read more about it at: http://www.card-gallery.com/article/164,How_To_Get_Your_Credit_Score_For_Free

Answer 5

Insufficient credit history one reason for being turned down for credit - been there done that.

Sounds like you don't have much. Apply for a c/c - most companies will start you out with a $200-$500 limit. Make a small purchase and pay it off in a 3-4 payments. Make sure, you stay under 30% of your limit and pay it on time every month.

Answer 6

1. Review your credit report for any errors and correct glitches that may not be accurate (but are still hurting your current score). You can obtain a free copy of your credit report by visiting www.CreditReport.com.
2. Refrain from opening a lot of new accounts over a short period of time, especially if your credit history is on the shorter side to begin with.
3. Pay your bills on time.
4. Don't open any credit lines you probably won't use. For example, don't open a lot of store credit cards just to get the initial 10 percent discount.
5. Instead of moving credit card balances to lower rate cards, try to pay them off. Transferring balances can change the ratio of your total credit card balances to your total available credit lines, hurting your credit score.
6. Open a few new credit accounts, use them responsibly, and make your payments on time.
7. Try to use your credit cards less. Even better, pay them off every month. The bigger the space between your total credit limits and the balance you carry, the better. Try to keep your balance below 25 percent (for example, $2,500 if your credit limit is $10,000).
8. Contrary to what you may have heard, don't close old, paid-off accounts. Credit companies used to advise people to close old credit cards they were no longer using. But closing these cards shortens your credit report and makes you seem less credit-worthy.
9. Avoid bankruptcy. Declaring bankruptcy is one of the worst things you can do for your credit score. It may seem like the easy way out in the short term, but over time it will cost you tons in the way of high interest rates.

Answer 7

first find out what your credit rating is - if it's over 700 don't worry about raising it - if it is less than 700 then make more debt and pay it off immediately

Answer 8

if u have things that are paid off but still show on your credit report, it can still hurt your score..