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Best Ways to Fix Bad Credit

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Best Ways to Fix Bad Credit

Old 04-19-08, 07:17 PM
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Best Ways to Fix Bad Credit

I have rotten credit. No credit cards, or anything, but I got in debt from some other unfortunate events that have unfolded over the past 4 years.

It took awhile, but I'm finally out of the hole. A lot of stuff was just utility bills, a cell phone bill, and some other stuff. It's all paid off. Now, comes to the hard part: rebuilding.

I don't know where to begin. I'm only 21, so I have a lot of years ahead of me to perfect it, but where do I begin? I've been getting numerous credit card offers in the mail from various companies for Visa and MasterCards that basically cater to people with bad credit. I don't know how good these are, and if they're worth it. I'm more than willing to pay them the various fees within, just so I can get some line of credit established that isn't bad..

I currently am paying on a car which I have been since 2004. That's fine, that shows as good. That's about it though. I'd like to look at home ownership when I'm done with school in 4 years, and another car down the road, and obviously be able to maintain good credit just for my sanity.

Any suggestions as to what I can do? Any credit cards that are "the best" when it comes to those trying to rebuild? Any other options?

I appreciate any tips you guys can share.
Old 04-19-08, 07:32 PM
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I was going to write you like 5 paragraphs worth of stuff, but to sum it up, pay the car off early if possible, make extra payments early on as those will knock down the principle faster than extra payments towards the end. Get a credit card but pay it in full each month, never pay interest. If you cant pay it in full, stop using it until you pay it off.
Old 04-19-08, 08:00 PM
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Old 04-19-08, 08:39 PM
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Go to www.myfico.com. Go to the message boards and READ READ READ.
They really give great advice. Some key things to remember.

Credit to Debt Ratio
Use your credit wisely......don't get a lot of cards. Get one or two and start rebuilding.
Old 04-20-08, 11:28 AM
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Get a no-annual fee credit card (no application fees either) - try a card from a gas station. Use it only for gas and pay it off in full each month.

Don't be late paying any of your other bills. Be building up a cash reserve somewhere in case you need a larger amount of cash for an emergency.
Old 04-21-08, 10:06 AM
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The only credit cards you are going to get are horrible ones. You should get a card with a place that you have a relationship with. That usually means banks and credit unions. They may be more willing to work with you since they have your money. If your credit is REALLY bad, you might need a secured card (meaning you send in a security deposit and if you don't pay they draw from it and your limit is never higher than your deposit). But it's a good way to establish credit.

What you can also do is start using challenges and bumpage to get those bad marks potentially off your CR. Open a credit monitoring service with TrueCredit (or similar) and use their online resources to challenge your negative marks. A negative credit event has to be fully documented for seven years if they want to keep it on your report. Utilities do not keep that info for that long. If they can't verify in 30 days, that comes off. Getting just ONE collections mark off your report can swing your score as much as 50 points alone!! The bumpage MAY help your score as well (this means making a soft inquiry into your scores daily). Bumpage has some potential negatives, so do your research on it.

Everyone else who posted has good ideas - pay your bills promptly is paramount. Except whoever said pay off your car, that's a terrible idea. I'm not sure he read your post either, since you said it was all paid off. Keeping your car loan active shows that you can continuously pay a debt promptly each month. That's one of your BEST features of your current credit situation. No sense in getting rid of it, as it's not revolving, it's installment credit.
Old 04-21-08, 10:18 AM
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i would keep paying on the car...no reason to pay it off early, at least not in terms of building up credit.. the other thing is try to get a credit card...anything really...just make sure it has no annual fees. but if you get one, make sure that you can pay it off each month, as with bad credit, you're going to get some really bad rates. if you feel that you can't control your spending on your CC, then it's better off not to get one though.

the suggestion above to get a secured credit card is a good idea as well, if you don't qualify for a regular cc.
Old 04-21-08, 10:19 AM
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Try Capital One.They usually have fee free cards.
Old 04-21-08, 11:56 AM
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The simple answer is to pay on time over several years. For example, get a huge tv from Best Buy with their no interest financing deals for 24 months. Divide the cost of the TV by 24 and pay on time each month. This alone can raise your FICO 100 points. Just remember, carrying a debt and paying it off little by little consistently will help your credit more than carry no debt at all.

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