Do you have bad credit or no credit? If you haven’t borrowed money before, or if your last debt was successfully paid off many years ago, the credit reporting companies may not have any information on you; that’s “No credit.” If you have defaulted on a loan, had things repossessed, or made late payments on a credit card or utility bill, that’s “Bad credit.” Both situations can be salvaged, and with pretty much the same techniques.
First, make sure you are paying current payments regularly. It won’t help you at all to establish a good record with a new card or loan if you are missing payments on your electricity bill, car loan or mortgage. The same goes for your current cards; make sure you are paying them down.
Second, see if you can get a credit union membership if you don’t already have one. They can often get you the best deal on a small loan or low-rate credit card.
Third, apply for a low-limit credit card. Even a gas card will do. Make sure that the merchant reports to the credit reporting companies, or all your on-time payments won’t help you at all. Don’t apply for a lot of cards, even if you don’t use them; every one of them counts as potential debt on your credit record. Too much potential debt compared to your income scares creditors.
Don’t draw a lot of money on this card! Making the payments reliably is the reason you took this card in the first place.
If you can’t get a regular credit card, get a “secured” card. These require you deposit money in the bank equal to the credit line you want. It means that the card issuer is at no risk, since you have already put that money in their hands. After you’ve made regular payments for a while, you will have established enough of a good history to apply for a regular card.
Add New Comment