Credit Help Contents
Adding Positive Credit History
To get a good credit score, you must have good credit reporting! You can’t get good credit because when you apply for credit, you are denied because you have a bad score….and around and around it goes.
We have broken that cycle for you!
There are several easy ways to add positive credit history to your credit report. This short chapter will give you all the important information necessary to instantly add serious points to your credit score and start building strong credit references right away.
Obtain pre-paid or secured credit cards
This is another easy way to begin building rebuilding positive payment history on you credit report. A prepaid or secured credit card is a credit card that holds your money as collateral for the credit you use.
There are many types of pre-paid and secured credit card accounts. The collateral used is always money. Most of these accounts require a security deposit equaled to the amount of the credit limit given plus a fee for the service. Other accounts are given a larger limit than the amount of collateral given. Not all of these types of accounts are reported to the credit bureaus, so if your goal is to improve your credit; be very selective in regards to the account you use. In addition many of these types of accounts charge excessive fees. The yearly fee should not exceed $150 for an average and reasonable major credit card.
Obtain Secured Bank Loans
Obtaining secured bank loans is easy and allows you to acquire excellent credit references using a simple technique we call the “Three Loan Maneuver”. You will need at least $1000 to perform this procedure and get the desired end result, BETTER CREDIT! You will apply for 3 loans with 3 different banks in 3 days.
On the first day take your $1000 to the 1st bank and request a secured personal loan with a minimum of 85% loan to value. This loan must be a minimum of a 12 month term, with minimum payments.
This is the easiest type of loan to acquire because it is secured with cash. Most banks will loan 85% of the amount on deposit. Given the loan, the savings account becomes frozen. However, every time a payment is made, an amount equal to that payment becomes unfrozen, less a few dollars for interest. Ask that the loan be for at least one year, with minimum monthly payments. Monthly payments establish a payment history. You will not be turned down for this type of loan no matter what your previous credit history, and in most cases it will not be checked. If the loan officer is planning on checking your credit, and you have bad credit, tell them you are trying to re-establish your credit, and that a good credit rating is very important to you. In addition, make sure that this type of loan is reported to at least one of the major credit reporting agencies.
Once an $850 loan (85% of $1,000) is obtained, take that money to another bank the next day and open a second savings secured loan for $722.50. (85% of $850 = $722.50)Then you repeat the same step again by opening a third savings account of $614.12 (85% of $722.50 = $614.12). You will only be able to obtain 3 loans if you only have $1000 because each loan requires an equal amount of collateral plus interest.
Pay these loans off by doubling the minimum payment every month on time using the unfrozen funds that become available. Each time you make a payment you will free up funds that equal the amount you have paid minus interest. As long as you only use these funds to repay your secured savings account loan and you pay on time you will add positive credit references quickly. The interest rate should be very low and not cost you more then $30 per funded loan.
Make sure that the loans are not completely paid off for at least six months from the date that they were opened. This will ensure that they are reported to the credit bureaus. You also want to be sure that accounts are eventually satisfied or you may only be hurting your credit. By completing this easy and cost effective maneuver; you will have a minimum of three solid credit references added to your credit history and added a number of points to your credit score.