I would really like some advice on how to build up my credit with secured credit cards. My boyfriend and I really need to bring up our credit scores. So I want to find the best secured credit cards companies that will help me do this. What have you found to help your credit score the fastest? Now since we are not married, do I get a card for each of us? Or do I just get one and have both are names on it? Will they report both of us to the credit bureau or just the primary person? I heard it is best to use the secured credit cards to pay off monthly bills like car loans, house bills and mortgage. Is this true? So lets say I put $ 1000a month on the card to pay off my house bills and ect. I then pay those bills with the card, and then pay it off in full each month. Is this the best way to help my score? Or do I send it on the bills and only pay back some of it each month to build up a payment history? Any help would be appreciated. TIA
Do you have any friends or relatives that would add you as an authorized user to existing credit cards? This methodology works far better and much quicker.
Ya that would be great. But i wont ask anyone to do that for me. I put myself in this mess, I need to get out of it.
I can't speak for secured cards, but when my score was in the low- to mid-500s, I was able to get a HSBC unsecured card. But be aware that when your credit is that poor, you are going to get socked with ridiculous charges and obscene interest rates. Still, if you're looking to build history and demonstrate responsible usage, and you do what I do -- consolidate your recurring monthly bills (electric, telephone, etc) via credit card, then pay in full every month -- it won't hurt that much. Once my credit bumps over 700 I'll probably be leaving HSBC because I don't agree with some of their policies (another discussion for another time). But I must say when I disputed a charge from a merchant, HSBC was in my corner the whole time. This particular merchant got really nasty and kept disputing the chargebacks, but HSBC kept doing their own research and replying on my behalf. I faxed in my documentation once and that was the end of it. So I have good things to say about HSBC's customer service. And if you're near the bottom of the credit pool, let's face it -- you're not going to get an AmEx. As far as anything like "quality of reporting", any regular (unsecured, non-store-issued) credit card that reports will count the same towards your credit score.
That is totally correct what you said about HSBC customer service and rates. But the only thing is, I owe them money from years ago. So I dont think i will get a card through them. I did look at my bank (BOFA) unsecured credit cards and it looks really great. I was thinking about using them to pay all my recurring monthly bills. But I was told two different things, it is bad to pay in full each month. And leaving a small balance each month on the card is not good too. So which is it?
As long as it's under 30% of the credit limit it won't hurt too much, and it shows you can revolve a balance.
ok, that help. Thanks. So would you say to pay it 70% off each month is better than 100% off each month?
You could even pay 90% or 95%. I've heard that carrying a small balance is better than a zero balance, but I don't know for sure. In fact, probably only FICO knows for sure!!
I think the "30%" thing comes from using 30% of your available credit, which is not necessarily the same as paying 70% of your balance. If you have a card with a $100 limit, you should try to keep your balance no higher than $30 at all times. For me, personally, carrying a balance is something I try to avoid. It just gets confusing, because what if I miscalculate the compounding interest, and what if my phone bill is a touch higher this month, and what if I have an emergency and need to charge a $400 car repair? Given my own personal circumstances, I pay in full every month. As Hedwig said, no one really knows whether a running balance helps more than a zero balance, so go with what you know. And remember, FICO is just a number. When you go for that mortgage or car loan, your FICO score will only get a casual glance. Your entire credit report will get a review, and at that point, I think that carrying a zero balance month to month would look best. FICO isn't everything; it's just a very broad generalization of where you might fall on the credit scale. For true credit repair, you have to look at the entire picture.
Any legit company can bring up your credit score. its on you to live within your means. Thats the reason the economy has such a hard drive down (at least one of the reasons) because people just kept spending. Sit down with your boyfriend or whatever and calculate your monthly income and how much extra you have to spend and move on from there
Last thing, dont be scared of credit! Credit is good, as long as you dont abuse it. im sure everyone would agree with me. Just know credits got your back as long as you dont do credit wrong!
It's a legendary credit myth that leaving a balance on credit cards will help increase your FICO score faster. The speed at which you establish credit has absolutely nothing to do with whether you carry a monthly balance or not. So, if you can pay in full each month, then you should do just that. Have you found a good secured card yet, or are you still looking for the right fit?
Josh is right as usual. Carrying a balance rather than not carrying one does not increase your score and makes no economic sense. An aside, there are corporations which will add you on to existing accounts. I'm not saying that a few secured cards won't help you at all, it just takes much longer than being added as an authorized user. In any event, if you elect to go this route be very selective in who you choose.
