Credit Building Advice

[Anonymous]

Okay so quick questions. I am looking to improve credit score, but then again who isnt. 

Right now I am at 571 from Equifax. I have 1 account in Collections which is paid off. I have 3 credit inquires in last 2 years. 

That is all I have. I am 23 and my credit file is pretty empty. 

I am never had a credit card, never had a loan of any sort. I have had to get a job and pay for everything. 

Now I am looking at getting a decent used car in the next few months. But not sure if I will be able to with a low scroe of 571. 

So if I was to get a department store Credit card or a regular credit card for $500 or so. And pay it off each month. Will that have much impact on my score? Or what could I do in order to make it look like like I am credit worthy or anything?

Currently my file looks something like that below. 

Payment History Your history of paying bills on time.

Very Good

Amount of Debt Your total amount of outstanding debt.

Poor

Length of Credit History How long you've had credit.

Poor

Amount of New Credit Your recent credit history of new loans or applications

Poor

Type of Credit The various types of credit accounts that you have.

Poor

Any advice on how to boost a scroe would be great. Thank you

[daneatreia]

Get a secured card and pay it off every month and you should see an increase of 5-10 pts monthly. 

[kjm79]

Someting that has been suggested on the forums is to get a small secured personal loan (say $300-$500) and use that money to get a secured credit card.  This helps give you the mix of credit your profile needs to start building a strong score.  It's a revolving and installment account addition.  Since you stated you've never had a credit card or an installment loan, this might be the quickest way to get both. 

[RobertEG]

+1

For long-term credit score improvement, there is little doubt that you must establish revolving credit.  I like the suggestion of a small loan followed by a secured card, thus improving both credit mix and adding revolving credit.

Additional improvement would result from a good-will deletion of the collection, so I would work on sending the debt collector a GW letter.

However, this is not a one or two month fix.  GW letters take time.  Expanding your credit may, in the short term, even lower your score by the additon of credit report inquiries as part of the application process, and if approved, a reduction in your average age of accounts.  But a necessary short-term step.

If you need a quick jump in score, I dont see a quick fix.

Can you put off the auto loan for awhile, and take some necessary preliminary credit rebuilding steps?

[Booner72]

My husband had NO active tradelines.  He had collections.  When I added him as an AU on 2 of my revolving accounts, his score went up almost 100 points.

I bet you will see significant improvement by adding that secured card once it reports.  Better yet, have family sign you up as an authorized user on a "clean" account they have that has LOW utilization.  We are saying  "secured card" bc you probably won't get approval of an unsecured card yet, and why waste the inquiry?

Good Luck.

[Anonymous]

For some reason it wasnt allowing me to sign in with the account I created yesterday. I had this account from a few years back so was able to get into it with this. 

Either way I like what i sbeing suggested. I can hold off on getting the auto loan any anything else. I will start with a small secured loan and work up from there with secured credit card to get everything rolling. 

I currently bank with Bank of America. So my next question would be, will they give out a loan this small? Or dont they prefer the larger loans? Does anyone have any experience with that?