Building credit
If you have no credit , previous bad credit, or bankruptcy, you need to build a good credit report file. First
of all, you should get some secured credit cards which are pre-loaded cards. The bank will give you a
maximum line based on the amount that you deposit into their bank account as security. For example,
if you deposit $500, your maximum credit will be $500. You should charge a small item on this account
every month and pay it off monthly to show regular on-time payments.
Remember to keep your balance below 50% of the limit, which is $250 in the example above. After you
have made payments for 6 months or so, you should be able to get a few gas station and department
store cards. Finally, you should get a small installment loan such as an auto, student, or computer
loan. It is important to note that lenders require that a bankruptcy be discharged 2 years and that you
have re-established perfect on-time payments with 3-4 credit accounts if possible.
Some first home buyer loan programs will allow a lender to build you or supplement a credit report
which shows regular payments on non-traditional credit accounts such as rent, car and health
insurance, cell phone, utilities, etc.. It is important build some credit history to qualify for a home loan.
Keep credit in good standing
Once you have built up a good credit report, you need to monitor it to make sure negative items do not
pop up when you apply for a mortgage. Identity theft is a huge problem today and this year alone more
than 500,000 Americans will be robbed of their identities with more than $4 billion stolen in their
names. “Every 79 seconds, a thief steals someone's identity, opens accounts in the victim's name
and goes on a buying spree.” (CBSnews.com) You may want to investigate credit monitoring and try
Credit Manager free for 30 days. You need to protect the good credit rating you have worked so hard to
get.
Keys to Good Credit
* Always make sure that your mortgage company receives your payment during the month the
payment is due. Just one late mortgage payment will have a negative impact on your FICO score.
* Each time a company checks your credit; a few points are subtracted from your FICO score.
Shopping for a car, a credit card, furniture or mortgage usually requires that your credit be checked.
Too many inquiries on your credit can significantly decrease your FICO: allow credit inquiries only
when necessary.
* Each card has a credit limit. Keep your current balance no higher than 50% of your credit limit. When
your credit card balance exceeds 50% of its limit, your FICO score begins to decrease.
* Credit lines have a significant impact on your FICO scored. Monitor the number of credit cards you
have open. If you have several open credit cards, which you never use, it’s often better to close them,
since they tie up your ability to borrow. But it is good to keep at least 3 to 5 long-term credit card lines
open. Also, stay current! Even if you are only able to make your minimum payment, always get your
payment in before the due date.
* Keep an eye on your credit report. Or if you see an error, get it corrected. Challenge the credit
bureaus directly; telling them the reason you are disputing the report. If that doesn’t work, try appealing
to the creditor, asking for a “goodwill adjustment”. Beg and be sweet. It often works.
* Apply for cards only when necessary. Don’t be lured by the freebie stands on campuses or pre-
approval promotions in the mail. Multiple inquiries on your credit report may adversely affect your credit
history.
* Close all inactive accounts since they are still considered to be possible obligations by potential
lenders.
* Bankruptcy is an even worse blemish on your credit report that can haunt you for up to ten years. Only
resort to bankruptcy as a last resort when all else fails.
* Auto repossession is one of the worst blemishes your credit report can receive, so try to avoid it if you
possible can.
If you have no credit , previous bad credit, or bankruptcy, you need to build a good credit report file. First
of all, you should get some secured credit cards which are pre-loaded cards. The bank will give you a
maximum line based on the amount that you deposit into their bank account as security. For example,
if you deposit $500, your maximum credit will be $500. You should charge a small item on this account
every month and pay it off monthly to show regular on-time payments.
Remember to keep your balance below 50% of the limit, which is $250 in the example above. After you
have made payments for 6 months or so, you should be able to get a few gas station and department
store cards. Finally, you should get a small installment loan such as an auto, student, or computer
loan. It is important to note that lenders require that a bankruptcy be discharged 2 years and that you
have re-established perfect on-time payments with 3-4 credit accounts if possible.
Some first home buyer loan programs will allow a lender to build you or supplement a credit report
which shows regular payments on non-traditional credit accounts such as rent, car and health
insurance, cell phone, utilities, etc.. It is important build some credit history to qualify for a home loan.
Keep credit in good standing
Once you have built up a good credit report, you need to monitor it to make sure negative items do not
pop up when you apply for a mortgage. Identity theft is a huge problem today and this year alone more
than 500,000 Americans will be robbed of their identities with more than $4 billion stolen in their
names. “Every 79 seconds, a thief steals someone's identity, opens accounts in the victim's name
and goes on a buying spree.” (CBSnews.com) You may want to investigate credit monitoring and try
Credit Manager free for 30 days. You need to protect the good credit rating you have worked so hard to
get.
Keys to Good Credit
* Always make sure that your mortgage company receives your payment during the month the
payment is due. Just one late mortgage payment will have a negative impact on your FICO score.
* Each time a company checks your credit; a few points are subtracted from your FICO score.
Shopping for a car, a credit card, furniture or mortgage usually requires that your credit be checked.
Too many inquiries on your credit can significantly decrease your FICO: allow credit inquiries only
when necessary.
* Each card has a credit limit. Keep your current balance no higher than 50% of your credit limit. When
your credit card balance exceeds 50% of its limit, your FICO score begins to decrease.
* Credit lines have a significant impact on your FICO scored. Monitor the number of credit cards you
have open. If you have several open credit cards, which you never use, it’s often better to close them,
since they tie up your ability to borrow. But it is good to keep at least 3 to 5 long-term credit card lines
open. Also, stay current! Even if you are only able to make your minimum payment, always get your
payment in before the due date.
* Keep an eye on your credit report. Or if you see an error, get it corrected. Challenge the credit
bureaus directly; telling them the reason you are disputing the report. If that doesn’t work, try appealing
to the creditor, asking for a “goodwill adjustment”. Beg and be sweet. It often works.
* Apply for cards only when necessary. Don’t be lured by the freebie stands on campuses or pre-
approval promotions in the mail. Multiple inquiries on your credit report may adversely affect your credit
history.
* Close all inactive accounts since they are still considered to be possible obligations by potential
lenders.
* Bankruptcy is an even worse blemish on your credit report that can haunt you for up to ten years. Only
resort to bankruptcy as a last resort when all else fails.
* Auto repossession is one of the worst blemishes your credit report can receive, so try to avoid it if you
possible can.
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Keep Credit in Good Standing
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