Trying to establish credit

Do you know if you have credit scores at all? If you don't have score, then that could be why you are having so much trouble getting a credit card. The quickest and easiest way to generate a credit score is to add yourself as an authorized user to one of your family members or friends existing credit card accounts. Make sure they have perfect payment history and they can maintain a low balance on their credit card (10% of the credit limit). The higher the credit limit and the longer the payment history the higher the credit score. Once you have credit scores from the authorized user account then go out and apply for a secured card. Thanks! Heather with BoostMyScore.NET

 

My situation was a little differnt but might be able to still help you. I had a ton of collections on my report from some medical procedures. I ended up using a few companies to help me restore my credit, most just promised me the world and just wanted to charge me cheap prices and it would be fixed in 2 months or less. I talked to a gentelman (Adrian) at a company, Prime Credit Experts based out of CA, and even though I didn't pay to get my credit fixed because my husband doesn't trust anyone now.. I did receive a TON of useful information.

I was told with secured credit cards, you want to make sure to keep your balance as low as humaly possible. If you use more than 25% or 35% (I dont remember the numbers) of your availble credit it will actually not benefit you as much. I have a $200 limit card I use and keep my balance around 5-10 dollars all the time. After a few months it helped boost my FICO score 20 points. Not bad.

Also with secured credit cards, try using a card with an annual fee vs. monthly fees (they will all have these.. ) Eventually I'll probably stop using this card and dont want to have to remember to pay the monthly fees.

Hope this helps!!!

Much Love,

April P.

 

When you are starting out, your options for obtaining a credit card are basically to go with a secured card, or to go with one of the subprime lenders which charge outrageous fees and APR's (not recommended). Also, most banks offer credit products to their own customers with easier chances of being approved.

For example, I have terrible credit right now, because I was forced to default on ALL of my unsecured debts back in 2009 as a result of losing my job. I never paid anything toward these debts ever again, and they have all charged off and been sold to junk debt buyers. Nevertheless, the bank which I use has offered to me--on more than one occasion--the opportunity to apply for a secured credit card, which they say I'd be guaranteed to be approved for since I have always been in good standing with them. I never accepted the offer, because I am scared that having a new account on my credit report will cause these other creditors to sue, but the point is that even with credit scores in the low 500's, I could have qualified.

 

Adding yourself as an authorized user before you go and apply for a secure card will be more beneficial. If you don't have credit scores added an authorized user account with perfect payment history and a low balance will give you a score in the 700 range. Each time you open a new credit account your credit score goes down temporarily until you can show positive payment history. Wouldn't you rather start at the top and work your way down instead of starting at the bottom and working your way up. Thanks! Heather with BoostMyScore.NET

 

Sal:

Welcome to the "PRE-APPROVED" doesn't mean "PRE-APPROVED" conundrum. Chances are because you are receiving PRM-based credit offers, you have a credit file, just a very thin file. (If you have no scores at all, you wouldn't even be in the CRAs database to get PRM-based credit offers.)

Promotional "PRE-APPROVED" offers work something like this. Bank XYZ pays one of the three CRAs for the 'above the fold' information about consumers who should be able to fall within their lending criteria, credit scores within a certain range, mortgage, loans, and other types of accounts that they specifically utilize. They are then required to send a "PRE-APPROVED OFFER OF CREDIT" to those whom they obtained from the CRA, the fine print says that the offer is contingent upon your COMPLETE CREDIT FILE meeting their standards for opening an account.

So the process looks like this...
PRM = CRA giving your 'above the fold' information to a company.
OFFER = company sends the offer that they wish to extend to you.
ACCEPTANCE = YOU accept the offer and mail back, call, or go online to accept the offer.
VERIFICATION = company verifies that your credit report does qualify for the offer that was extended, and accepted.

The frustration and feeling that they must only get paid to process the applications is normal, but actually they're paying out money on every step of the process, it's only when the verification step is completed, and the person gets approved, mailed the card, begins using the card, and starts paying the bill, that they're even beginning to see any money coming in from the process. The costs through those four items are referred to as the "Cost of Customer Acquisition".

Have you tried writing back to any of the companies that have denied your "PRE-APPROVED" offers of credit?

Sometimes just getting past the initial computerized process to a human being can make a difference.

IF you want a good explanation of PRM, you can check out the thread in my signature about Pulls and PRMs.