(Closed) Rebuilding your credit

posted 5 years ago in Finances
Post # 2
Member
198 posts
Blushing bee

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juneberries :  well I would start with using this card that you just got and paying it in full at the end of the month. It will take some time, but making payments on time and paying your bill in full each time is the surest way to get your credit back in goodstanding

Post # 3
Member
368 posts
Helper bee
  • Wedding: April 2018

See if your bank offers loans for rebuilding credit. My credit union offers offers small secured loans to people rebuilding or establishing their credit. What they do is grant you a loan that you pay on and once the loan is paid in full (usually a year) then you get the money.

And, just keep making on time consistent payments with everything..usutilities, student loans, etc.

If you have student loans see if you can consolidate them.

Post # 4
Member
105 posts
Blushing bee
  • Wedding: September 2016

if you have fiance or parent or someone you trust with good credit, they can add your name to their account. They don’t have to give you the card itself, and it won’t affect their credit, but it will improve your credit.

 

Post # 5
Member
1171 posts
Bumble bee

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juneberries :  Adding someone onto you’re card/or vise versa will not rebuild your credit. I am in the banking world so you started off on the right foot. A secured card is one of the steps to rebuild your credit. 

  • Secured Card (make sure you are never late, not over the limit, pay balance off in full.)
  • Pull you’re credit, make sure you don’t have anything in the “bad debt” section.
  • If you do have some W/O (write-offs) contact those collection agencies and make a payment.
  • If you have anything that was in collections, you need to make sure they report as “paid” that way it shows although it was in collections you have since paid that off.
  • There are people you can pay a small fee to who will reach out to these collection agencies on you’re behalf and have the paid debt taken off you’re credit report.

I hope this helped, if you have any other questions feel free to ask!

 

Post # 6
Member
2527 posts
Sugar bee

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alliegeeb :  I agree to an extent. She needs to use the new card but NOT pay it in full each month. That’s almost like using cash. You build a strong payment history by making a series of timely payments. You also want to try not to use all of the credit. Best to stay in the 30-40% range because over that will begin to negatively affect the credit score. The payment history is more important though because you can’t escape late payments. Once they are there, you pretty much just have to let time do its work and distance you from them. If you mess up and use all of the credit and your score has dipped, it is easy enough to remedy that by making payments to bring your balances back down in the good range.

Post # 8
Member
745 posts
Busy bee

Being added to someone else’s card does in fact improve your credit – one of the elements of your credit score is how much available credit you have, and they include the available credit of cards you have been added to. 

Additionally, don’t pay the secured card off in “full” each month – pay the full statement balance. More than likely, by the time you pay (on the due date) the balance will be higher than the balance that appeared on your bill – only pay that portion off. 

Post # 9
Member
121 posts
Blushing bee

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sandiegobee :  not paying in full could lead to owing more than she can pay in a month thus having credit card debt. There’s a fine balance between building a credit score and taking risks that will lead to debt in the long-term. I recommend paying your bill in full when you get the statement, and also only using 20% of the credit card. Sign up for creditkarma to monitor your credit and see how some of these recommendations help/hurt your credit. 

Post # 10
Member
9193 posts
Buzzing Beekeeper

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juneberries :  I had a great credit score when I got my first credit card because I had been on my parents’ accounts since high school so that definitely helps. Paying the statement balance in full every month will not negatively affect your credit rebuild but it will save you money in interest. Also ask your landlord, utilities, and other bills if they report your positive payment history to credit bureaus. 

Post # 11
Member
2527 posts
Sugar bee

Keeping a credit card balance DOES cost you more in the long run – you’re paying interest on it every month. It’s the cost of building good credit.

The single most important factor in establishing a good credit score is your PAYMENT HISTORY. You don’t really develop a strong payment history unless you have a balance and you are making payments ON-TIME every month.

Your debt-to-credit ratio is a very important factor as well (although less than payment history) but it can be manipulated when you have a need. For example, if you have a $5000 card and you’ve maxed it, your score will suffer. Pay that balance and your score will bounce up dramatically next cycle. Conversely, if you miss payments/have late payments/have no payment history – you cannot get around that. You can’t create a solid payment history and you can’t get away from a bad one. The only thing that will cure that is TIME.

I’ve even taken out a loan, put it in a separate account and paid back the loan WITH the loan to A. build payment history and B. contribute to “credit mix” – they like to see different TYPES of credit accounts.

It’s one of those things you keep chipping away at. Little things here and there help.

Post # 13
Member
2527 posts
Sugar bee

I also have quite excellent credit so I wouldn’t say it was terrible advice. I’m merely sharing how I built it. Take it or leave it. I’m straight wink

Post # 14
Member
281 posts
Helper bee
  • Wedding: May 2015

I think what people mean by paying off but also maintaining a balance is not getting interest but following the bills:

ex: month 1 bill comes in mailbox and you have a due date, it’s 300 let’s say. I pay 150$ immediately and continue to use credit card as normal. Before the due date, I pay the remaining 150$ so that month bill 1 is paid off in time by due date but my balance online shows as let’s say 100$ because ive been using the credit card. When month 2 comes, I pay it in time again. What’s important is to not spend beyond your means.

Also one hundred percent getting added to someone’s card who pays off on time increases your credit, especially when your credit is really low. I have experience with this as of four months ago when I added a family member. 

Post # 15
Member
1752 posts
Buzzing bee
  • Wedding: February 2015

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sandiegobee :  Agreed. Being an authorized user does help your credit and the activity is also on your credit report. I’m an authorized user on my husband’s AMEX and it is on MY credit report. Also, paying the statement balance will take care of avoiding interest. Even if there is still a balance, as long as it’s paid within the statement cycle that the purchase was made, interest will not accrue.

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