"How can I establish credit?"
This is the question I get asked as much as any other, and the answer is very simple... "SLOWLY, AND CAREFULLY."
Now if that isn't quite as specific an answer as you were hoping for, I offer this... You need to start with revolving credit. Simply put, you need to get a credit card, and manage it responsibly.
**pay on time
**keep the balance as low as possible
**pay it off as early as is possible (don't wait for the bill-pay it online!)
**don't buy on credit, what you can't pay cash for, within 30 days
Simple. All it takes is a little discipline, and a basic understanding of how things work. I know that there's alot of people out there that think credit cards are the devil and all, but credit cards don't kill finances... People do!
Let's start by describing different kinds of cards...
There are PREPAID CARDS which are pretty much what they sound like. You put money into the account, whether by direct deposit of your paycheck, or through your bank account. The funds are available through the card, for online purchases, car rentals, etc... Many don't require any credit check, or income verification. The only problem with many of them is that they don't typically report to even ONE of the credit bureaus, let alone ALL of them. That means, though they offer an element of convenience, and purchasing power, they don't really do anything for your credit. There are a handful that do, but not many. For those of you who are completely opposed to using credit cards, these may be the answer.
Then there are SECURED CARDS These cards require that you set aside money from your bank account, to "secure" a line of credit, equal to (or sometimes, greater than) the amount you deposit. The minimum deposit is usually $200.00 or so, and will allow you to put far more, if your budget allows for it. Generally, the fees and interest rates are low, since you have personally guaranteed the line of credit with your own cash. Assuming these cards report to one or more of the bureaus, and you manage them wisely (as listed above), they will have a profoundly positive benefit to your credit.
Next, are the POOR CREDIT cards, or "SUB-PRIME" types of cards.
These cards do require at least a "decent" credit score, and will require a credit check. The fees and rates are largely dependent upon your credit score. They typically have higher fees and interest rates, though. Manage them wisely, and you'll likely see increases in your credit line, and potentially lower interest rates within about six months...
I hope this helps, and answers some of your questions.....
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But...do the Secured CC's ( as I asked in another post..) report to the CB's? What about the 'store' Cc's? I know you would THINK they would, however.....reading some websites, it states "they are not obligated to do that." Like.....a 'Catch 22' to improve your credit.
Most of the secured CC's do report to at least one bureau... It depends on the card. Most of those on creditgecko report to all three, I believe...
Store cards generally report... They are usually handled by one of a handful of companies that service retail accounts... GEMB, WFNNB, HSBC are examples. These companies are reputable, and almost always report to the bureaus...
The only ones to watch out for are the cards that allow for purchases from a catalog... Those generally are a bit less reputable. Hence, their not being listed on creditgecko...
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DOC.....I appriciate your advice, once again. I've been getting ALOT of 'ads' on the over the Internet, about 'store CC's'. Alot of them promise "this and that"..or....If I DO call a phone number to find out OTHER information about them, I don't get straight answers.
It is a huge industry right now sdchargers, the government is recognizing how people are getting behind, now these companies can step up and be the solution for some, hopefully they will do what they are supposed to do.
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I was looking on DOC's site. Looking at the Secured CC's. One I DID see looks pretty good to me....it's called Applied Bank Visa CC. The information states you need a minium of $200.00 to start the 'Credit Line'. You can open an 'bank account', with Applied Visa, and deposit money, to build up to $200.00. Doesn't seem too bad of a card.. Anyone have any thoughts or experiences with this CC?
For what it's worth, that's why the Applied Bank Visa is at the top of that page.... It's our favorite too, based on the favorable nature of its terms, rates, etc..
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DOC..........'your' information is VERY helpful. I know I said ( in another post..) about the 'credit repair' thing. ....being sceptical about those so-called 'repair' companies. But...I DO have to say, as I ask you about advice, you don't give me the same 'lines' as other websites do (IE..some 'credit repair' companies want 'us' to PAY for their info and advice). As 'we' ask you for your 'expertise', you just 'put it out there'...know what I mean? Thanks, again. I'm REALLY 'leaning toward' getting this CC.
No problem...
Glad to help!
This is a great post and thanks for the time you put into it. It really is a common question around here on how to start credit. It usually is easier to begin with a credit card and the most approves ones are usually the store credit cards. Thats where I started my credit out at. I have seen those magazine credit cards you are speaking of. They really do not seem like they would have much weight in the credit building world. Do most of them even report to the bureaus monthly payments? I see how high there interest rate is and would advise not going in that direction to start credit.
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Your Welcome, DOC. I looked at the Applied Bank Visa, again. Just to make sure I answered all of MY questions..ya know? They let you deposit money ( bit by bit, if you need to) to start a 'credit line.' That's ANOTHER reason why I like what I read, ontheir website.
This would be a n excellent opportunity for people who are having trouble getting a credit card and want to rebuild their credit. With it being the persons own money there would be a lot less of a risk on the part of the credit card company. Is there any certain amount you have to have down before using the card or can a person use what they put on it. I also would have to imagine some type of fees being on there somewhere. Someone can not do this with out having costs covered.
The minimum deposit on the Applied bank card is $200, then you can add to it as you like... They'll give you a credit ine to match your accrued deposit...
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Recently, I was looking at different CC sites..those for 'bad credit'. I din't EVEN see the Applied CC, anywhere, on the site. Is your site the ONLY one that has Applied CC, DOC? 'YOUR' site seems to have the more 'practical' CC's, etc..on it.
Bassically, we are dedicated to helping people, not only with the deletion f negative or illegally misrepresented information, but also with the RESTORATIVE process. So we would always try to get people to a cc affiliate site that had similar products, but the content was somewhat overwhelming for people, and they would inevitable end up applying for a card that didn't fit their needs...
We created this site out of necessity, almost exclusively to avoid that problem. As we maintain autobnomy over the products featured, we are typically able to offer a better set of products, based on our clients' needs, and the needs of the credit repaired consumer at large...
***As always, I provide information on this site for FREE, and I simply hope that you'll check out my sites, so they will get the "clicks", which makes the sites get higher rankings in the search engines... Thanks for helping out!
Thats pretty good that they match you with the same amount you add to the card. It really would be a great way to rebuild credit. Is this service included in your charges DOc...getting people reestablished or is it a separate fee. Sounds like it could be well worth it if it wasn not an astronomical charge. I know when I was rebuilding it was really difficult..yes I done it but it took a while. Maybe if there was a quicker way some of the people here at the forum may want to look into it.
The $200 has nothing to do with what we do on the credit repair side... We simply make suggestions based on the consumer's credit situation..... If they don't have a card, we typically recommend one like those mentioned in this post...
The thing with the secured cards is that the money you use to "secure" the line of credit is a good way to avoid the typically astronomical fees and interest rates of other sub-prime cards...
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Ok, DOC...give me a bit of advice here. I chacked my CR (it's in the low 500's). It actually DID raise a little bit. I have a few 'Charge-Off's' (which were 'small amounts'... $300.00 there, $400.00 here. I think you may 'get the picture'.) I have a past due debt that is $2500.00 with a CA. ..I can't seem to 'work anything out' with them. Also...I have a few things that are a 'good rating' on my CR. A school loan;good status $16,000.00. A car loan:$16,000.00 (however...in 'current status'.)I don't have any kind of 'revolving credit' ( had two CC's that arethe 'small amounts': 'bad rating'.) Also...a few little loans that are paid off. THIS is why I'm thinking the Applied CC would REALLY help me. Also...I was told ( I'm assuming this information is correct), as I just keep paying down balances, that I DO have, on the 'current' items, that my Credit score will go up a bit. Is this true? Have any advice on the 'whole' picture? Thanks.
The older thesse debts become sd chargers the lees impact they are suppose to have on your credit. I will let Doc answer the part on advice but just remember to keep making your payments faithfully on the accounts that are up to date. A secured card would probaly help you out quite a bit. Are any of the debts that you listed close to the "fall off date" at all? I hear once they fall off that it will help your score alot..I'll let Doc put his opiniion in on that one too.
The secured card with a positive payment history and low balance will DEFINITELY help your scores... That's why we recommend them!
As for paying off the balances of the others... It depends. Once an account is charged off, or in a collection status, the balance is inconsequential, at least with respect to credit score. $5 or $5000 doesn't matter. This is perhaps one of the single greatest misconceptions about how to RAISE a credit score...
Do understand though, what paying off an old debt can do...
If it's with an original creditor, it prevents a law suit against you and the incessant calls/letters. It also prevents them selling it to a third-party debt collector, who can also write/call/sue. And what's worse, if they deem the debt uncollectable, they too can sell the debt, and now you have the original creditor, the first third-party, and the second third-party all listed on your credit reports...
And, of course, there's always the issue of the third-parties re-aging the debt, thus making it stay on the reports longer than it should, per the FCRA.
I was told that only two people can report on one debt. The original creditor and the most recent debt collector. How does this third party get to list? If they are not allowed to do so can a person dispute it and get it off their report? Also I have seen credit card companies that you may owe a debt to send a letter wiht a new credit card offer in the mail. They say they will put the past due amount on the new card and give you a little extra money for your use yo and that way you can pay payments. This was quitew a while ago and I never took the offer.
Fireyone... The number of people who can report is not limited... The only thing that is limited is how many can report a balance owed... That is quite simply, "ONE." The odds of a successful dispute are the same as anything else, based on the quality and content of the letter(s) you send...
The "great new offers" sent by third party debt collectors are largely BAD NEWS, and in my personal opinion, should be avoided... Much has been said about the outrageous fees and interest charged on standard "sub-prime" credit cards... On these cards, they are simply astronomical...
Some credit card companies (though not many, these days...) offer the deals to which you refer... Capital One, and WaMu Providian make these offers periodically, by invitation only. In fact, many moons ago, when I was first learning about how to rebuild my own disastrous credit, I had two cards from Capital One, and one from Providian, both of which were these kinds of deals... I wouldn't look for these deals to come to you anytime soon... They have all but disappeared in the current credit market.
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FIREYONE........a FEW of these debts will 'fall-off' in 2009 ( thank goodness!!). I hate to see them just 'hangin there'..LOL DOC......you REALLY explained everything in 'simple' terms......again, thank you!! Umm....................I DO have debts (Charge-Offs) that have the OC and a CA reporting the SAME account...the SOL's haven't expired yet. I don't have ALOT of debt 'out there'...but, I don't have ALOT of credit, either. Ok...DOC, you said, "making the debt stay on the CR longer than it should." how can I 'deal' with this? I don't have this 'problem, yet. ..just in case it DOES come up. Should I keep copies of CR's for proof? On the Omega Credit Repair site, can we deal with you DIRECTLY?! You've answered SOOOO many of my concerns......I really appriciate it.
Basically, you ask for validation from teh collection agency, including proof of the date of first delinquency. Then send that in to the credit bureaus, and ask that they delete the tradeline, or correct that information... That's really all there is to it...
If either fails to do so, you have cause for civil action against them...
I am very accessible with respect to my company... If you call the office, most days, there's a solid chance I am the one who'll answer the phone... That is by design--I'm kinda big on accountability. Hence, my having put my name, my face, and my personal email address on the site!
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I'll be looking into Omega Credit alot more!!.......really trying to 'clean up' my credit. Again.thanks for the help.
SD...I know when I googled Omega credit I had found some pretty interesting information on them. It all was pretty good so if you decide to go this route you should do a little research. Every body has to start somewhere or restart somewhere in some cases.
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(I understand this is an older post..) There are a more things I would like to do on my credit (if I can). My financial situation has gotten a bit better. Is Omega Credit still 'hanging pretty tough' out there?
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