How do you rebuild your credit??

Discussion in 'Credit Talk' started by Mybest, Jul 27, 2010.

  1. Mybest

    Mybest Member

    After repairing my bad credit, I don't have anything left on my credit reports but 1 charge off/paid old verzion bill on each of my reports. How do I rebuild my credit? Someone told me to start buy geting a credit card and pay it on time every month and pay in full... Is this all or can I do somthing else??
  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Your friend gave you pretty good advice. Get the best credit card your current credit score qualifies you for, use it sparingly (keep your credit utilization under 10%), and always pay on time and in full. Add to that card with another one after several months and treat it in the same way.

    If you have a close friend, spouse or relative with excellent credit and an old credit card with low utilization, you may want to see if they're willing to add you as an authorized user as well. That should help to give your score a little boost right away.

    After awhile, your credit scores will improve even more, and then you might even look into improving your credit mix. I wouldn't worry about that quite yet. Just focus on getting some credit and building positive payment history.
  3. Mybest

    Mybest Member

    Thank you very much Joshua :)
  4. billbauer

    billbauer Well-Known Member

    Joshua and I always disagree on this one. Getting credit cards is an expensive process and is so slow that it is much like sitting on the front porch and watching the grass grow.

    I say the way to build credit the fast and cheap way is to use the old 3 banks trick. The only drawback is that you do need about $1500 minimum to make it work. If you can scrape up that much cash you can get excellent credit reports from 3 banks for less than $100 total cost. To make it even more appealing you get your results much faster. About 12 weeks to go through the entire process and another month or so to get the results reported on your credit reports. The full instructions on how to do it are to be found by clicking on my google docs link below. It works and works quickly.
  5. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Yes, Bill and I will just have to agree to disagree on this one.

    Credit cards don't cost a dime when you use a no annual fee card and pay your bills on time and in full. And yes, it may take some time to build positive payment history and improve your credit scores, but I guess I'm just not a fan of shortcuts/tricks when it comes to building credit.
  6. billbauer

    billbauer Well-Known Member

    Of course, another thing to remember is that I'm not into building personal credit. I'm only worried about corporate credit. That's a whole different ballgame. People looking to build personal credit are trying to get cards with a credit limit of at least $500 or so all the while hoping to come up with something much, much better.

    In the corporate world we worry about cards with a minimum limit of $10,000 just to start with and that's scraping the bottom of the barrel. I reject those as being nothing but credit builder junk cards. I don't even bother to reply to those offers. I'll think a little bit before rejecting an offer of a $25K to $50K limit card but not to long. I've already got two or three of those so don't need any more. I don't owe anything on any of them and don't use them very much. Legitimate offers of credit start at $100K and go up from there.

    The smaller cards are only useful if you don't live out of your hip pocket. Most executives don't. But in order to get that kind of credit you absolutely must use tricks to get there because you have to prove that you have the income to pay off loans of at least $1K to $10K and do so very quickly. Small loans like that need to be paid off in a matter of weeks, not months and if you really want to wreck your score go borrow from a payday loan place or any small loan company or finance company. Doing so just proves that you don't even have the means to live out of your hip pocket and can't manage your money wisely.

    I am also well aware that you and others here also decry my methods of dealing with debt collectors, lawyers and courts. But the truth of the matter is that in most instances, when you get to local court you know you owe the debt, the Plaintiff's lawyer knows that you owe the debt and the judge knows that if you didn't owe the debt the Plaintiff would not have hauled you into court. The result is almost always a judgment and all the nasty stuff that comes after that. The only way to keep from getting pounded in local court is to know what the lawyer is going to do before he does it and do it to him before he does it to you. The only way to win is to know all the tricks and traps and exploit them to the max even if most people consider them to be nasty tricks designed to do nothing but delay the inevitable. In order to keep the judge from looking at it that way too you must prove the lawyer is lying through his teeth, trying to double dip on his fees or doing other wrongful things. If you can prove the Plaintiff is doing likewise then so much the better. Prove that they are doing multiple things that are illegal and that judge will look at the lawyer with downright scorn on his face. His brother lawyers are supposed to be better than that even though they almost never are. Bringing the facts to the table in front of a courtroom full of pepole is what get the judge's goat every time. (LOL).

    In order to do that you must use tricks and traps. Once you have them nailed in local court take them to federal as a plaintiff and you have really turned the tables on them. Once you get them past the self-denial stage and into the settlement stage you pretty well have them begging for mercy. I can tell you for sure that it is better to be a plaintiff in a federal court than it is to be a defendant in any court and it is the tricks and traps that get you there.

    If you don't use them to the fullest extent possible the result is usually something nobody really wants to contemplate.
  7. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    I worry about both personal and corporate credit. In today's lending world, especially for small businesses, it's impossible to get anything done without having strong personal credit too.

    I've worked on several large loans/lines of credit over the past year or so, and every lender I've worked with has required a personal guarantee on top of everything. If your personal credit score is in the tank, they won't give you a cent.

    And I don't decry your methods of dealing with debt collectors Bill. Frankly, I enjoy reading your responses, and a good forum should always offer conflicting viewpoints to its members. You always catch me by surprise.
  8. Heather L

    Heather L Well-Known Member

    JoshuaHeckathorn gave you some great advice about how to start to rebuild your credit. By apply for a credit card and use it responsibly by paying on time and paying off the balance off each month.

    If you are having trouble getting a credit card you could ask a family member or friend to add you as an authorize user to a existing credit card to boost up your credit score. You must make sure they have perfect payment history on the card. The credit card must be at least 2 years old or older. Their balance should never be more then 20% of their credit limit. Once you see your credit score increase, then go out and apply for a couple credit cards to start rebuilding your credit.

    If you cannot find a friend or family member to add you as an authorize user, there are other authorize user sources out there.
    Last edited by a moderator: Jul 30, 2010

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