ideas on how to rebuild my credit

[three33]

im 21 right now....i owe one company some money on my record but other than that its just nothing....i was wondering if anyone had any ideas on how to rebuild my credit....any and all ideas are greatly appriciated....thanks

[freakin]

Just carry a small amount on your credit card, $500 and keep giving them a little over the minimum payment each month.

[Def_3]

Originally posted by freakin
Just carry a small amount on your credit card, $500 and keep giving them a little over the minimum payment each month.

if someone has credit problems, chances are they DONT have a credit card:rolleyes:

[freakin]

Who knows if he has one or not?!....I had some credit problems a few years ago, and still had a credit card. That was exactly how I fixed it.

[roopi]

Originally posted by freakin
Just carry a small amount on your credit card, $500 and keep giving them a little over the minimum payment each month.

Instead of paying just over the minimum pay off the entire balance. Don't carry a balance on your credit card.

If you can't get a credit card get something like a gas card, visions card, future shop card, bay card, etc. and just use it occasionally and pay of the balance in full each month.

[pinoyhero]

If you do have a card don't pay the minimum evry month, pay the whole damn thing off!

[freakin]

Originally posted by pinoyhero
If you do have a card don't pay the minimum evry month, pay the whole damn thing off!

You'll get a better credit rating making payments then just paying it off.

[max_boost]

Also remember, it takes time to build up your credit. Have you ever accessed your credit report before? You can retrieve it at equifax or transunion.

Some simple stuff to follow, only apply for credit when you need it. For example: You want a credit card, don't apply to 5 different banks hoping one will accept you. For the most part, banks don't know your exact financial situation and one way for them to assess you is to find out if you are seeking credit. Those who are constantly seeking credit is deemed to be a risk, oppose to those who aren't. Everytime a bank accesses your credit file, it shows on there. So if you got rejected by Royal Bank, and try to apply with Bank of Montreal, there is a good chance BMO will reject you as well or ask you questions pertaining to Royal Bank. Know what I mean?

Learn to save your money. Even if your credit file isn't up to par, if you show the bank you have some assets, it'll help you when you apply for a loan.

Don't carry too much debt. It's easy to spend, hard to pay off.

Get a steady, good paying job.

Again, over time your credit will build.

[Weapon_R]

Originally posted by pinoyhero
If you do have a card don't pay the minimum evry month, pay the whole damn thing off!

I've always thought that steady, consistent monthly payments (higher than the minimum) were the best way to use credit cards to build credit.

[Phats]

Originally posted by freakin


You'll get a better credit rating making payments then just paying it off.

Try explaining yourself, people will be more inclined to believe you if you give a good reason instead of just saying that it is so.

[max_boost]

I'm 22 and I have $1400/month in car lease payments, why would the bank trust me? Because I have assets, 0 debt and one credit card for $5000 that I don't even use :rofl: I basically followed what I outlined above to improve my rating. I've been working at it for the past 4 years, my goal is to reach the 850pt rating from Equifax (highest rating). I'm almost there:D Mind you, you have to at least have a decent paying job to borrow and spend.

[max_boost]

Originally posted by Weapon_R


I've always thought that steady, consistent monthly payments (higher than the minimum) were the best way to use credit cards to build credit. It doesn't matter if you pay it off in full or the minimum or more than the minimum. The key is to not default on any payments, period.:D

[freakin]

Originally posted by Phats


Try explaining yourself, people will be more inclined to believe you if you give a good reason instead of just saying that it is so.

awww, I need facts? hehe

Here's how it was explained to me by a CIBC rep. when I missed a couple payments last summer and had them jack up my intrest rate as a result.

What I was told was that the credit card companies are more interested in people that will carry a balance because it means that they're constantly getting intrest payments. If you pay off you're balance right away, then they only get a small amount of interest. It's still money to them, but they want more. At the same time they don't want some deadbeat who they're going to have to chase down for payments (ie, me when I lost my job). It was suggested to me that I bring my balance down to a small amount and make a little more than the minimum payments. The minimun payments are mostly interest with only a small amount going to the principle. That way I'm not doing the bare minimum, they're getting paid and it appears on paper that I'm taking care of things responsibly. That is their ideal customer.

I just carried a $500 balance, set up my internet banking to make a $50 payment every month on it and forgot about it.

I didn't have any problems taking about a sizable loan a couple months ago, so I'd say it's working.

It's shitty that it's costs you money to do it (that's why I only carried a small balance).....but it does work.

[freakin]

Originally posted by max_boost
It doesn't matter if you pay it off in full or the minimum or more than the minimum. The key is to not default on any payments, period.:D

That is VERY true....missing payments will fuck you and fuck you hard.

In retrospect, I suppose my explaination is more for re-building credit, not obtaining it.

[max_boost]

Originally posted by freakin


That is VERY true....missing payments will fuck you and fuck you hard.

In retrospect, I suppose my explaination is more for re-building credit, not obtaining it.
Equifax has a credit rating system between 300-850. Everyone's credit rating falls between there.

When you say rebuild credit, you have to do things so your rating increases. KNow what I am saying? Obtaining credit is a way to rebuilding credit, it shows you can be trusted and the ability to repay a loan. Isn't that rebuilding?

The only thing you can really do right now is to make all the required payments on your credit card and not default.

[BebeAphrodite]

It's 300-900...I just sent for my report the other day.
As for paying just the minimum, I don't agree with just paying the minimums. That basically means that you may be responsible but you're not able to repay it. So your credit rating will not go up if all you can do is pay the minimums. Building credit has a lot to do with debts/assets/capacity, etc.. (wayy too lazy to go into it)... it's not just about paying off minimums each month.

As for a way to rebuild credit, check equifax.com and pay for a credit report, they'll give you tips on how to increase ur rating. You will have to answer some questions to verify it's you and I think it was 22 bux or something.

[Khyron]

Take out a small personal loan (500-2000) dollars, put it in a bank account and pay it back over a year.

Khyron

[GTS Jeff]

hmm i fail to see why making payments just above minimum every month would be better than just paying it off it full? it just shows that ure a poor chump.

the way i build my credit is simple. i just use my credit card on a regular basis (usually charge $500/month to my visa) then i pay it all off every month. ive got 3 credit cards. they all started at $500 limit from when i was 18. now, 3 years later, all 3 have had their limits automatically bumped to over $5000. im sure if i apply for a loan, i can get another 10000 of unsecured credit, plus more if i cancel a couple cards (which i could do, since i only keep them around to build credit).

actually, credit cards are kickass cuz they are just as convenient as debit, except theres no stupid limit of the # of transactions u can do every month. plus they allow u to do shit over the net.

[DUBBED]

^^^ Do you carry a balance now or are you continuing to pay it all off at the end of each month?

[max_boost]

Originally posted by DUBBED
^^^ Do you carry a balance now or are you continuing to pay it all off at the end of each month? It depends how big the purchases are:D

Also, sometimes Credit Card companies issue promotional rates which are far lower than the traditional 18.5%.

Example: Awhile back I was offered 1.9% interest over 6 months so I took out $5K. Interest payments were less than $8/month and I had 6 months to pay it back, which I did.

It's almost like free financing, can go buy a bodykit or do whatever the hell you want:D

[GTS Jeff]

Originally posted by DUBBED
^^^ Do you carry a balance now or are you continuing to pay it all off at the end of each month? ive never paid interest in my life man...

[Super_Geo]

Yeah I've always just paid what's due at the end of the month instead of letting it carry over.

If you live with people, offer to pay the house bills on your credit card. Last year I was living in a house of 6 and the utilities/phone/cable/etc ended being about $600-800 a month. I had some housemates that didn't have credit cards, so I booked their flights home for them (~$3000 by the end of it). It's a win/win situation... you take the extra 5 minutes out of your day to take care of the bills, everyone else doesn't have to worry about it (except when they have to pay you, of course) and you get more credit history because of it. Also, pay for everything with your credit card... groceries, movies, etc.

The more money you spend on it the better (as far as I know...)

[liquid1010]

Anyway to find your credit report for free?.... I really dont feel like spending $21 :dunno:

[girlRACER]

Its all about the debt to equity ratio not necessarily credit card balances or the amount of monthly payments. (just as long as you made consistent payments) Someone can have no debt and still have average credit score while someone with some debt but lots of equity will have a high credit score.

[eb0i]

For any credit questions you should contact the Alberta Credit Counselling offices at 265-2201 and you can check out their website at http://www.creditcounselling.com

I had a few credit questions and they were very helpful. They offer credit rebuilding workshops as well as other kind of workshops that are financially related (like how to budget and such). They offer free counselling and help you go over your credit reports from Equifax and Trans Union. I suggest you call them and talk to them yourself. This is the best route to go. I currently am having credit problems because BMO is being gay, so that's why I went. Great help, trust me.

For more info PM me.

[JokerFMJ]

Best thing i've found that works for me:

Pay for things that you'd normally pay for in cash with your credit card (example: Gas for your car). Then pay it off at the end of the month.

Keep the money you would've spent on gas aside for that end of month statement you'll get from your Credit Card company, then send them a check.

This way you're not going crazy with your credit card just so you build credit, but you're still using it steadily enough that it will build up quickly.

Brief explanation of how credit points work:

A bill paid early or on time = 5 positive points.
A bill paid late = 15 negative points.

So even if you can only afford to send $5 toward a bill, do it, then it won't look bad.

Also, cell phone bills don't count toward your positive credit, only your negative.

[Z_Fan]

Originally posted by GTS Jeff
ive never paid interest in my life man...

Lucky!

I'm half way to buying a Ferrari with how much interest I've paid. You got your Ferrari in your Garage then? Or I guess you will by the time your 35. SWEET!

[ZorroAMG]

With Online Banking it is SO much easier to rebuild credit. All the suggestions about using a Credit card a bit and paying some off at the end of the month are good, but what happens is people don't always budget properly and end up just racking up the card. Here's how to do it online and fool-proof:

Buy something with your credit card, when you get home pay it off immediately with cash from your chq/sav account. Credit ratings don't depend on how much you spend and pay per month so go small, but just use the card every month. Say one or even all your tanks of gas. Something you NEED to buy anyway, nothing frivolous. Come home and pay it off IN FULL...you'll be on your way to good credit....

It takes most lending institutions 2 years of good re-established credit to make a difference in your rating....be patient and strict with yourself!

[syeve]

I had "OK" credit when applying for a mortgage, just a credit card that I payed every month like Jeff said. Never really carried a balance, so I didnt relly have bad credit, just lacking credit. I had my dad co-sign for my mortgage and was approved with no questions asked.

Does this increase my credit rating even if it's co-signed?

Steve

[ZorroAMG]

A mortgage will help you and your credit rating as long as you make all the payments on time...default a few times and you are gonna be screwed...

Co signers don't hurt or help YOUR credit rating, they just make the overall picture of the person appyling for the mortgage, look better and qualify...

Your credit rating is your own...whatever debt has YOUR name on it and is YOUr responsibility to pay is what can change your score.

Cosigners don't have financial obligations to the mortgage unless you default, then we go to them for the payments :)

[rockym20]

You can get a credit report for free by mailing the form into Equifax. It takes some time to get it back, but they are required to do it free by law.

As for rebuilding your credit rating, the guys who said to repay it in full are correct. I work as a commercial banker and have to review the personal credit reports of the business owners who we do loans for. The single biggest driver to your credit scoring (assuming you make all of your payments on time) is your % utilization of your short-term debt (such as credit cards and lines of credit). The lower the balance you carry on your debt, the better. In fact, it is good to never use your credit cards or personal lines of credit, if possible. To rebuild your credit rating, it is better to have access to credit and not use it, than to use the credit you have and repay it monthly.

As for the guy who talked about the personal bankers recommendation for credit cards - these guys have profit targets for their portfolio of clients. Of course they are going to recommend you use the credit you have - it gets them closer to their bonuses and it is their job to lend you money.

[ZorroAMG]

Umm where do you work, cause your info is QUITE flawed. You get a credit rating by USING credit. If you sat on your butt, never getting a credit card or loans etc you won't establish a credit rating. If you have wrecked your credit rating the only way to re-establish it is to prove your ability to carry and repay debt, not just by closing all your credit and not using it anymore.

Also, the amount of debt you have does NOT affect your rating. If you have a $10000 CC racked up to 9500 but make all the monthly minumum payments, there is nothing wrong with that. Your rating will be fine and your bank will love you because you are paying mad interest.


...

[rockym20]

Maybe my terminology was difficult to understand:

"it is better to have access to credit and not use it" - it is better to have credit cards and lines of credit (access to credit) but not use them. I didn't say for people to get rid of their credit cards, just not carry a balance on them.

Your credit score does directly relate to the level of credit you are using. When banks pull an Equifax (credit check) on you, they also get something called a "Beacon Score". This score is a numerical representation of your likelihood of repaying your loans. The higher the score, the better. This score has an inverse relationship with the level of debt you carry. For example, a person with an unused $10,000 credit card has a much higher score than a person with a maxed out $10,000 credit card, all things being equal. So, the higher the balance, the lower your credit rating. This isn't too hard to figure out - someone who doesn't use their credit cards is a much lower risk of not paying than someone who maxes theirs out. If your credit rating drops too low, you won't have access to any more loans should you need them. So, maybe you are thinking "I don't need anymore loans, so I don't care". Well, how would you like to pay a lower interest rate? This is often negotiable on your credit cards (although the banks will never tell you this), and definitely on your lines of credit. The higher your Beacon score, the better position you are in to negotiate a cheaper interest (because you are a lower risk). This holds for mortgage negotiations too.

[eb0i]

Originally posted by rockym20
You can get a credit report for free by mailing the form into Equifax. It takes some time to get it back, but they are required to do it free by law.



You must remember that there is 2 Credit Agencies in Canada that you must check, not only Equifax but there's another agency called Trans Union . Be sure to check both (sometimes the 2 companies credit reports vary, and thats a bad thing!). and both provide free credit reports by mail. Also you should really check into my previous information I provided because that's where you will find financial advisors/experts that deal with this kind of situation every day. A lot of what is said here are big myths that would be cleared up if you went there and took the workshop or talked to an advisor.

[eb0i]

Okay here's a little something to clear things up for you guys.

Credit rating is based on a number system from 0-9

and there are 3 letters that indicate what type of account it is.

R - Revolving Account (i.e. credit card)
I - Installment Account (i.e. car loan)
O - Open Account (i.e. personal line of credit)

and beside these letter the numbers will appear (1 being the best and 9 being the worst credit)

0 - Too new to rate: approved but not used

1 - Pays (or has paid) within 30 days of billing; Pays account as agreed

2 - Pays in more than 30 days, but less than 60 days; Not more than one payment past due

3 - Pays in more than 60 but less than 120 days; Two payments pass due.

4 - Pays in more than 90 but less than 120 days; Three or more payments past due

7 - Making regular payments under a consolidation order

8 - Repossession

9 - Bad debt, placed for collection

So you'll see something like R1 beside your Mastercard rating if you pay withing 30 days of billing.

But if you didn't pay and still owe and it went to collection it will appear as R9.

[TomTom]

cibc approved me for 25k without a co-signer or colat when i was 19 (i took 15k), a 5500$ visa, a $1500 SS card and than citifinancial just called yesterday said they would give me a 10k personal loan(ya right at 28% lol)

i got a visa when i was 18 kept buying things than paying them off , and my dad put me on as a 2nd person on a loan a long time ago that he payed off. i have a 72pt (with cibc) credit rating the bank lady said , i dont know what that means but whatever