How can I build credit if no one will work with me b/c my credit score is low?

Question

Years ago (when I was less responsible), I made some bad financial decisions...either I didn't pay everything off or I didn't take the time to open more accounts when I had easier opportunities. Now I'm paying the price. Even though I'm now paying off all my debts and make more money, I still need to BUILD more credit to increase my score. How can I do that when no one wants to give me a chance? A co-signer is not an option for me. I understand that I'm still considered a risk, but there's got to be a way...

Answer 1

This is how your score breaks down:

35%- payment history
30%- total debt outstanding
15%- length of time you've had credit
10%- types of credit
10%- inquiries and new credit

Now how you can help yourself is to:

1. Get added as an authorized user. If you have a close friend or family member that has excellent credit, see if they'll add you on their account. You don't need a card, for this is just for reporting purposes only. If you're able to be added, make sure that the credit card company reports that account on your credit.

2. Get a secured card. This is the easiest credit card that you can get, without having a credit check. These may be offered where you do your banking or at Bank of America & Wells Fargo, for starters. You would have to put up a deposit upfront to secure the same amount in a line of credit, but the deposit would collect interest while you're proving your credit worthy. If possible, to increase the limit by adding to the deposit every 2 months or so, by doing that once the card does become unsecured, you'll keep that credit line and will have gotten the deposit back with interest. It looks good on a report when you have a high limit because it looks like you're trustworthy with a high limit. The key is to spend a small amount that can be paid off in full on time, every month. After a year of perfect payment history, the card should become unsecured.

Finally the monthly bills that you do have that you're paying regularly on like cell phone, car payment, etc. can be repoted to an agency called PRBC for positive credit. This is perfect if you're just starting out becuase certain things that you pay every month, may not show up on a report. Any payment that you pay can be reported in a scored report that can be used along with your credit reports. There's a lot that's covered in the website below, be sure to check it out.

Answer 2

Yes there is. This may sound strange but, STOP PAYING OFF ALL YOUR DEBTS! Only pay Student Loans, utilities and hospital bills. The secret to increasing you credit score is NOT paying off your debt, but establishing new lines of credit. Once it's on the report, it never comes off. NO MATTER WHAT!!! Most creditors want 3 open lines of credit in order to approve you for anything. What you do is this, find someone with a good credit line, over a year long and really kept it up. Ask them to make you an authorized user on the card. You don't want access to the card or ever want access to the card number, a user on paper only. The good credit line that this person has will automatically be duplicated to your credit report also. If you can find 3 people to do this, your score will skyrocket in no time at all. Remain a user on their card for about 9 months while you establish your own credit.

Answer 3

You can get a secured credit card as everyone else has mentioned, or you can get a CD secured loan. I would suggest a CD secured loan over a secured credit card any day because you are able to earn interest on the money you have in the CD. Basically you put money into a CD that earns interest for you, then you use the CD as collateral for a loan. The interest rate should be lower on the loan because you basically have cash to secure the note. Then just make sure to make your payments on time every month for the life of the loan and you will in turn bring up your credit score. As a banker, this is the number one product I tell people about that are looking to improve their credit.

Answer 4

Everyone hit it on the nail. You need a line of credit to build credit. You can use an unsecured credit card or secured credit card.

Rules to live by:

1. Always pay your bills on time.
2. Don't max your credit card. If you have $500, use only $250 - $300 of it.
3. Don't open too many lines of credit.

Answer 5

Get a secured credit card. These are usually available to everyone because you have to make a deposit that creates your line of credit.

Use only a portion of the line - less than half. Pay the bill on time all the time and make sure the credit card company is reporting your behavior to the credit bureaus.

Also look for a card that will convert to an unsecured card if your record warrants it.

Answer 6

"Buiilding credit can be done in many ways. If you are disappointed at your loan application being turned down, it is mainly because of absence of credit history. You should learn how to do build your credit.

Do not buy unnecessary items. If you are looking to build credit start spending properly.

If you see any errors in your bills or credit, reports, contact the concerned persons immediately.

If you have purchased an item using your your credit card that later turned out to be defective or gave poor service, then you need not pay the charges.But you have to dispute the charges with the parties that were responsible for the act. If they do not replace the item or compensate you for a service or product, you are justified in refusing the payment."

Answer 7

Building credit is hard if no one will give you that chance. Below I have listed a free website that has a list of secured and unsecured credit card companies that issue credit to people with no to bad credit. They have a summary of each card and they list the credit bureas each company reports too.

Just remember to make your paymnets on time and keep your credit card balances under 50 percent of your credit line. This will improve your credit score over time.

Answer 8

Orchard Bank could help get you going with a credit card, they report your payments and are willing to take a risk. the interest is higher, but make your payments on time and keep a low balance and that can help your situation, applied card bank could also be good for you. these two places helped me. I've never been late or missed a payment and now I am getting offers on credit with better terms.

Answer 9

Secured credit card will be about the only way unless you want to try the "buy here pay here" car dealers to get credit going again; either way, the interest rates are gonna suck.

Answer 10

Get a secured credit card from your bank.