How to Quickly Establish New Credit

Establish New CreditWhen applying for a mortgage, lenders will review the borrower’s employment, income, down payment, and credit history. Even if the borrower’s credit scores are acceptable, many lenders will look at the length and amount of credit established. If the borrower does not have an established payment history, the loan may be denied due to lack of or insufficient credit. The following sources could be used to establish your credit history and generate acceptable scores to obtain a mortgage.

• Secure Credit Cards – This type of card is offered by large banks (available online), local banks, and credit unions. A secure card usually requires a $300 to $500 deposit to open an account. The servicers of the secure card will report the payment activity to the credit bureaus just like a standard credit card. This is a great way to obtain new credit. The last thing you want to do is apply at numerous lending institutions and pile up inquiries (which will lower your scores). You may need a co-signer if your credit scores are below 500. After six months of on-time payments with a secure card, ask the lender to upgrade your secure card to a standard card. When the card is upgraded to a standard card, ask for the credit limit to be increased. This will give you more room to keep your balance under thirty percent of the available limit, thereby maximizing your potential scores.

• Department Store Cards – These are a good place to establish credit, because they’re usually easier to qualify for. Pay your balance in full and on-time each month and then try applying for a regular bank credit card in six to twelve months.

• Authorized User Loans and Cards – If you are unable to open a secure card, look into becoming an authorized user with a relative. They may qualify for the loan or credit card and add your name as an authorized user. You can use the card, make the payments, and have the payments reported to your credit report. Just remember, the payment activity will also be reported on your relative’s credit report.

Once you have established credit, it is important that the balances on revolving cards are kept below 30% of the cards available limit. This will help maximize the credit scores. Make sure that all the payments are paid on-time. It is important to limit your inquiries for new loans or cards. When shopping for a new credit card, installment, or auto loan, research the requirements first. If you do not qualify for the loan, go to another lending institution. The last thing you want to do is lose points from credit pulls (inquiries). A large portion of your scores are calculated from your use of revolving credit, so while you are establishing new credit it is important that you do not close any existing cards. If you do so, you will be reducing your long-term available credit and likely lowering your credit scores. Usually, the credit bureaus will not differentiate between a credit card closed by the consumer or the creditor.

An available option to follow your scores would be to pay for a monitoring service to track your credit score progress. Your scores are not affected when you pull your credit report; they are only affected by lenders who pull your credit that may offer or extend credit to you. It may take 12 months to establish an acceptable credit history to obtain a mortgage.

 

How to Start Getting Business Credit

Getting Business CreditA vendor line of credit is when a company (vendor) extends a line of credit to your business on “Net 15, 30, 60 or 90” day terms. This means that you can purchase their products or services up to a maximum dollar amount and you have 15, 30, 60 or 90 days to pay the bill in full. So if you’re set-up on Net 30 terms and were to purchase $300 worth of goods today, then that $300 is due within the next 30 days.

You can get products and services for your business needs and defer the payment on those for 30 days, thereby easing cash flow. And some vendors will approve your company for Net 30 payment terms upon verification of as little as an EIN number and 411 listing.

Always apply first without using your SSN. Some vendors will request it and some will even tell you on the phone they need to have it, but submit first without it. Many don’t even know you can get approved without it.

Most credit issuers will approve you without your SSN if your EIN credit is strong enough. If your EIN credit is not good enough, you might be declined and they then might ask for your SSN. No matter what ANY credit representative tells you, credit CAN be obtained based on your EIN only.

You must start a business credit profile and score with starter vendors. Starter vendors are ones who will give you initial credit even if you have no credit, no score, or no tradelines now. Most stores like Staples will NOT give you initial starter credit so DON’T even try applying.

Most stores will NOT approve a business owner for business credit unless the owner has an established credit profile and score, just like in the consumer world. Vendor accounts must be used first to establish a profile and score, and then store credit can be obtained. It usually takes only 90 days or less to establish a score and profile with trade lines.

Get approved for Visa, MasterCard, Discover, and AMEX cards with limits of $5k-10k once you have 10 payment experiences established. Dell is notorious for issuing higher limits, so apply for them only after getting approved for other revolving store cards. Limits equal to highest store credit card on report.

Continue to use and grow your credit to get access to even more business cash credit for your company.

How Do Professional Credit Repair Specialists Increase Their Clients’ Credit Ratings

Professional Credit RepairKeep your credit card usage under 30% of your overall limit.

Ask your financial institution to increase your credit limit without performing a “hard inquiry”.

Increasing your credit limit while maintaining or decreasing your balance will often improve your credit score.

If you have a number of accounts with small balances such as $20 or $30, pay them off right away.

The bureaus usually take into consideration how many of your credit cards carry a balance; having too many small balances can count against your credit score.

Ask a relative or friend with an excellent payment history to add you as an authorized user on their credit card, especially if they have a zero balance or 0% financing.

Limit the number of loans and credit applications you apply for in a single 6-month period. The only exceptions to this rule are home, auto, or student loans.

The bureaus usually don’t mind if you’ve applied for many of these types of loans, even within a two-week period.

Use your old accounts once in a while to keep them open; creditors sometimes close inactive accounts. If your old credit cards are closed, you lose an important part of your credit history, which can decrease your score.

The bureaus like to see that you’ve had open lines of credit over many years.

Dispute any negative or erroneous items on your credit report. Maintain a healthy mixture of accounts such as credit cards, store cards, and installment loans.

Apply for new accounts only as needed. Transfer your credit card balances to a card with a lower interest rate.

Taking this action can increase your rating and your overall credit limit. Ask credit bureaus to update any credit accounts which you’ve paid off – but still show an outstanding balance.

Ask credit bureaus to report any “accounts in good standing” that are not shown on your credit report.

Ask your creditors to forgive you for any late payments. Dispute any “charge off” accounts, late payments, and collection items on your report that don’t belong to you.

Dispute any negative items on your report that are more than seven years old. Ask your finance institution company to increase your credit limit by performing a “self-inquiry”.

In order words, they can view your report as if you had provided them with a copy.

If you are an authorized user on a card with numerous late payments and a high balance compared to the overall limit (over 30% is high), call your creditor and ask them to remove your name from this account.

Scan your report for any unauthorized “hard inquiries”, and dispute these with the credit bureaus.

Would you like to significantly improve your odds of qualifying for credit?

Best Ways to Start Rebuilding Your Credit

Rebuilding Your CreditTHE FIRST THING TO DO

The first thing to do is to get a free copy of your credit report. By law you’re allowed annually one free copy of your credit report from the three major credit agencies: Experian, Equifax and TransUnion. It’s important to get all three reports from all three agencies to compare and contrast any discrepancies such as late payments, charge offs or delinquencies.

SET ASIDE SOME TIME TO REVIEW

Now that you’ve gathered all the information from the credit agencies, set aside some time to figure out where you went wrong with your credit and prepare to fix it. If there are any items on your credit report that are wrong or don’t look familiar, file a dispute in writing. Even errors such as misspelling of your name, social security number or address could mean your personal information is mixed up with someone else. The credit agencies are obligated to remove any errors in personal information, which will help increase your score. The most highly used credit score scale used by the largest banks and lenders is the FICO score and generally a score of 720 and above is considered good.

MONITOR YOUR CREDIT REPORT

One important factor to raising your credit score is to make sure you pay your bills on time. While this may not seem important, 35% of your FICO score is determined by your history of payments made – whether you were late or current with your obligations. During this time of repairing your credit, you should prohibit yourself from applying for any additional credit, which may lower your score. If you have any other credit cards you don’t use as frequently, use them to make small purchases every few months to help grow your score and pay the bill off in full. If there are any outstanding balances from other cards stop using these cards until you pay them off even if it’s the minimum amount.

SEEK A CREDIT REPAIR COMPANY

If you don’t want to repair your credit on your own, you can go through a company that specializes taking care of that task for you. Many companies advertise that they’re the best and can help you clean up your credit within a short period of time. It’s very important to do your research on various credit repair companies to avoid getting scammed. Ask friends or family about a reputable credit repair company they may have used. Be prepared to pay associated fees with such a company.

REBUILD CREDIT

If you’re afraid to delve into the credit game after getting your credit score on the right path, obtaining some type of credit is key to rebuilding and keeping your good score intact. Look into getting a secured credit card, which is fairly easy to apply for. The good thing about a secured card is you put down a security deposit and whatever purchase is made will directly debit from the card. Managing the account properly and having this card reported to the three credit agencies will help maintain a good credit rating.

Once you get the secured card, don’t go on a spending spree and reach your card’s limit. You may have the idea in your head that swiping the card as much as possible will improve your credit score but it may look as if you’re about to max out to the credit agencies. You will want to use about 10-25% of available credit from the card to have a favorable score.