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I have a low credit score. I have finally paid off all my credit cards, but the score is still low. I wondered if I should get a credit card woth a low available balance, like a store (i.e Gap, Macy’s, etc. ) credit card. Would it be benificial to buy a few things a month with the card and pay off the entire balance each month? I was hoping to do this as a quick way to rebuild my credit, will it work?
What you should do is take a good look at your credit report to see what is bringing your score down, of course it is the negative entrys, and try to get them disputed/deleted off of your report. Meanwhile you should probably, after thinking wisely about the use of credit and good money payment habits, get a secured credit card, which of course is secured by your money, and reported to the three credit bureaus. Once you have been paying on time for a period of time, this card will be changed/turned into a unsecured card. I would try this, and also save up some money to get a secured loan from your bank also, borrow against that and pay it back in timely manner. This will truely build your credit over a period of time.
It might be a little early to have any significant changes on your credit score. Actually, credit cards are a start, but if you really want to up your credit, the best thing to do is to take out a loan on a car that you can easily afford, and pay it back on time, every month.
If you pay off the entire balance of your card, it actually doesn’t even show up on your credit report. You have to keep somewhat of a balance to affect your score. If you carry a low balance, and do not go over half of your credit limit, that is also positive.
Building good credit takes time, but in the end it will be worth it. The best advice I can give you is to make your payments on time. Eventually, you will be deemed RESPONSIBLE!!! :)
Then you can REALLY go into debt. :(
Anything where you can demonstrate the responsibility of paying debt on time will help raise your rating. You didn’t mention if you kept those old CC accounts open or closed them and cut the cards. i did this a few years ago after a consolidation and was later advised not to do this in the future.
Turns out the credit reporting agencies use a cert ratio formula to come up with the score (don’t ask, I don’t know exactly how it works). But it turns out that closing paid off accounts is not good, as keeping them open and current will raise your score, along with a positive debt-to-income ratio.
But i don’t think you can go wrong with your idea. Usually at least three months of regular payments is the minimum to keep the score up.
Whatever you do, don’t be a minute late with any, especially if you have MC or Visa from banks. I learned the hard way that lateness results in big fees and the interest rate automatically being adjusted to loanshark rates.
How long have your accounts been paid off? If they were low balances and you made the minimum monthly payments, that probably won’t help your credit score. The best credit scores have accounts that have been open a long time with high credit limits, but they don’t use them or pay them off monthly. Also, financing a car or some large item will help. Don’t close any accounts, try to increase your credit limits.
Hi there. I own my own Credit/Debt consultation company and congrats on paying off your old debt!
For your score to really be affected now you have to BUILD your credit profile, as well as delete old entries.
Getting those credit cards will help you but they are not the best ones to get as store credit cards charge higher rates.
I am always available to answer more questions !
Feel free to email me anytime at agdconsult2gmail.com
im aaron
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