How build my credit score?

Read some tips that will help you to build you credit score and buy very fast!

How increase your Credit Score?

 

This means that it should be easier than ever to buy a house, but unfortunately, the reverse is often true. The bad economy has forced many of us into making hard decisions that may have been right at the time, but ended up leaving black marks on you credit reports.

 

Apply for Credit Card with Bad Credit:

First, sign up on Credit Karma website, where you can provide many credit card offers based on your credit rating and history. There are some online banks that will put you in touch with credit card providers who are willing to give credit cards to customers with poor credit ratings. Of course you expect high interest rates on your card, but using it as a temporary card to repair your credit history is fine.

Getting credit cards with upper fee is a big mistake

Search for “Mall/Grocery Store” credit cards You probably saw that kind of credit card. Usually there is a troublesome seller trying to sell you a credit card just as you are trying to get out of a business. Normally I would say “ignore” this because the interest rates and terms offered on the card are terrible, but if you have a bad credit, you will NOT be able to charge it. Often these types of credit cards are handled more easily than regular credit cards.

 

Get a secured credit card:

These are basically perfectly functioning credit cards. But the balance you have on your card is determined by the deposit you pay on the card. Normally you pay $500 or $1,000 as a deposit to your card. This money will then be the “credit limit” of your card.

In one year (or two years, depending on the financial institution) the deposit will be refunded and the card will become an unsecured credit card. There is a big difference between a secure credit card and the “prepaid credit cards” that you can see in online ads. Prepaid credit cards do NOT repair your balance and you must pay a “fee” to put money on the prepaid card. Both prepaid and secure credit cards work wherever VISA/MASTERCARD is accepted, but between the two, a secure credit card is a real credit card, while a prepaid credit card is not.

Repeat: A secure credit card is exactly the same as a normal credit card, with the only exception that your account balance is the deposit you have deposited on the card. You must “pay” the amount charged to your card at the end of the month like a normal credit card.

So if all the other options to get a credit card fail, then this is the one to choose from. However, we have found that secure credit cards are not as easy to get as you might think. A number of readers have told us that banks will continue to refuse your request for a secure credit card.

 

So where to apply for a secured credit card with a reasonable chance of getting one?

You can apply for a secured visa card online here with Public Savings Bank (they specialize in online secured visa cards) or you can go to your local bank to apply through your bank. Note that physical banks may reject your secured credit card application if your credit report shows you still currently owe money to people (your credit report doesn’t just have a low score but there there are marks saying you still have not paid debtors what you owe). If this is the case, your best bet is to apply for an online secured credit card as the credit check requirements are waived or just visit many different bank companies in person and apply and hope one will give you a secured credit card.

 

1. Never miss a payment:

If you are trying to repair your credit, the worst thing possible to do is to miss a payment of some sort. This could range from a credit card payment, phone bill, even a parking ticket. Anything that might lead to a negative mark on your credit must be avoided. Lenders want to see that you have a proven track record of paying your bills on time. This is also important because it leads up to our next point

 

2. Build “Non Traditional Credit History”:

It’s true that mortgage lenders will look at your credit history, but they will also look at what’s called you’re Payment History (also called Non Traditional Credit History) too. Let’s go over this, since it is important.

First let’s give a definition of non traditional credit history, or rather let’s let the government do it for us: In 2008, the Federal Housing Administration (FHA) put down a firm definition of non-traditional credit. Basically, non-traditional credit allows mortgage lenders to help establish a borrowers credit history through what you might call non traditional means.

This means that you can build a sort of alternative credit history by making on-time payments to non-credit sources. The normal way to build credit are though credit sources such as credit card payments, car loan payments, mortgage loan payments, personal loan payments, etc.

 

However, Non Traditional Credit history can be build for some of the following sources:

  • Detailed payment history
  • Telephone bills
  • Utility bills
  • Cell phone bills
  • Cable TV bills
  • Local store credit cards
  • In short, paying your non-credit bills like cell phone bills, cable bills, utility bills can help you get a mortgage. Non traditional credit allows lenders to have an alternative means to determine loan worthiness. Note: this doesn’t mean you can just lax on your regular means of repairing and maintaining your credit (such as making loan repayments on time, credit card payments, etc), but if you have bad credit Non Traditional Credit can be a means to help you get a mortgage.

Note: you will need to keep a copy of all bills paid to prove your history.

Also, read some tips on how to buy your home with bad credit.

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