@Anonymous wrote:
This insider tip was given to me by a banker, he said for poor credit people like myself go get myself a "secured credit card"! This card works by not people extending credit to you, but you create your own credit. You deposit X-amount into a deposit account and that will be your credit line.
This banker tells me that just used this "secured credit card" once in a great while and never exceed 50% of your credit line and pay it all off right away. I submitted $1000.00 and now I have a "secure credit card" reporting on all three of my credit report agencies. I'm assuming this approach is to better my "utilization"?
Any other pointers and insider tips on how to increase credit scores (besides the obvious = don't have late payments, bankruptcy, collections, charge offs, don't let your credit limits approach credit limits, etc.)?
I heard of the following would also work:
1) Have a close one (family or friends) that has a very old credit card account (15 years +) to add you as an authorized user on that card (aka a sponsor). The sponsor will shred the extra credit card under your name when they received it in the mail so you actually never have the card in possession so you don't go spend more $$ and ruin the sponsor's credit. Basically, this approach will extend your sponsor's great credit and rub some onto you.
Anyone else has any tips?
This is similar to the tip I gave my brother when he was struggling. I told him to buy a 6 month CD for $X. Then, at the same bank, you take out a 6 month loan for the same amount, using the CD as collateral for the loan. They will do this, since they have no risk---you pledge the CD against the loan.
Make 4 regular installments (you can pay a little more if you want, but don't get too carried away. The point is to show you are using credit well. You'd defeat the purpose if you paid it off in the 2nd month). On the 5th payment date, pay the loan in full.
You could do this with a longer loan term, too. Just make sure the CD term is for at least as long as the loan term.
His score shot up 50 or 60 points by doing this. He got an auto loan and several credit cards shortly thereafter, where before, no one would touch him. I learned this trick in the early 1980s from a "kit" I purchase about credit rebuilding. ;-)
Also, be careful about paying that "secured card" in full every month. If it always reports a 0 balance, it appears that you aren't actually USING credit, and your credit score is all about determing how well you USE your credit. You might want to consider leaving a small (10% or less) balance on it a couple of months. You actually score higher using under 10% of your limit than you do using 0 of your limit.
Good luck, and be PATIENT! When my husband and I met and married in 2004, we both had scores just barely over 500 due to serious issues with our prior spouses. Now, we are both over 700. It takes time and dilligence, but it CAN be done. ;-)
