Saturday, July 4th, 2009

How do I establish and start building credit, when it’s already bad?

building credit
MedeivelReign asked:


I have never established credit, nor have I ever had a credit card. I would like to start building my credit to be good, however, I have a few debts (that I believe to be on my credit) like a $200 hospital bill and a few other things that I never paid… do I have to pay that stuff off before I can even get approved for a card? And how do I establish since (I’m pretty sure) my credit is already bad.

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7 Responses to “How do I establish and start building credit, when it’s already bad?”

Amanda H Says:
July 5th, 2009 at 1:41 am

First, as an american citizen, you’re entitled to get your free reports once a year- so go see if those bills are on there at all.

Second, I know why you want to establish credit, but why are you trying to do this without paying old/bad debts off? This is NOT smart. Dont go add a bill (credit card) without paying those debts. A $200 bill can be paid in a month or two…do that FIRST. If its on your credit it will help a bit, and if its not you might be able to get it paid before it is.

Third, you need a secured visa or a card from somewhere like HSBC, First premier, etc, that specialize in low credit applicants– but you WILL get hit with $100 plus in fees right off the bat, on a $250 or so card.

get your finances in order, check your credit yourself, and THEN consider getting those cards/loans…

Also, FYI, dont go over 40% or so of your limit– that dings yoru score too.

kansaskat33 Says:
July 6th, 2009 at 6:22 pm

I have to ask – Why would would you want a credit card if you are already in debt? My suggestion would be to sit down and figure out how much money you have coming in – pay cheque. Then write down everything you pay out – bills such as hydro, water, gas, rent etc. Then write down all the money you currently owe. You could consolidate all your outstanding debts into one loan from the bank. A line of credit usually gives you the lowest interest. If you can get this line of credit loan – PAY OFF all your outstanding debts then “think” about a credit card. You don’t want to be getting further into debt and then for sure you will have a lousy credit rating.
Hope this helps. Good luck.

lostintheclover Says:
July 7th, 2009 at 9:43 pm

Begin by checking all 3 of your credit reports.
Then apply for a secured credit card.
Make payment arrangements for your debts.
Keep all documents showing you have paid them off (some companies just don’t update payed-off delinquent accounts).
That should fix your credit.
CT

funkyk Says:
July 9th, 2009 at 8:20 pm

one of the easiest ways to build credit is by getting a small loan from your bank then putting the amount to be paid back in a seperate account including cost of interest to be automatically withdrawn for payments on your loan. a credit company will not usually consider medical bills unless you do not have sufficient good credit.

Danielle K Says:
July 13th, 2009 at 12:08 am

Credit cards are so tempting…leading to more debt. Apply for a store credit card. Maybe a store you rarely shop at…Sears, JCPennys maybe once a month buy something small and pay your payment on time. Some title loan places also go to your credit, but only very few. The Best way I got good credit is i set up a savings account and borrowed money against it, pay my payments on time now i have pretty good credit.
Good Luck!

madcutter213 Says:
July 14th, 2009 at 4:48 pm

NO YOU DON’T HAVE TO PAY THEM TO START BUILDING YOUR CREDIT….BUT YOU WILL NEED TO PAY THEM BEFORE YOU CAN PURCHASE SOMETHING MAJOR LIKE A CAR OR HOME…..THE EASIEST WAY TO ESTABLISHING CREDIT IS TO GET A SECURED CREDIT CARD….THIS IS ONE YOU DEPOSIT WITH A COMPANY AS SECURITY….THE AMOUNT YOU DEPOSIT IS THE LIMIT ON YOUR ACCOUNT…I WOULD START WITH A SMALL AMOUNT OF $200.00….MAKE A SM PURCHASE ON IT EACH MONTH AND PAY THE BALANCE OFF NOT JUST THE MIN AMOUNT….YOU DON’T WANT TO PAY INTEREST, THAT IS COUNTER PRODUCTIVE…ONE WAY IS TO PAY ON AN OLD BILL WHAT YOU CAN AFFORD TO PAY THAT MONTH WITH YOUR CREDIT CARD…PAY IT ON TIME…BUILD YOUR CREDIT AND GET ALL YOUR OLD BILLS PAID OFF EVENTUALLY…

MAKE A LIST OF ALL OLD BILLS YOU OWE…CALL THEM….MOST PEOPLE WILL WORK WITH YOU EVEN IF IT IS $10.00 A MONTH TO PAY OFF YOUR BILL

1. KEEP IN TOUCH…IF YOU MAKE AN AGREEMENT WITH A COMPANY….DO IT…CALL, CALL, CALL, IF ANYTHING COMES UP AND YOU ARE UNABLE TO PAY, BE SURE TO CALL, WRITE DOWN WHO YOU TALKED TO AND WHEN. WHAT WAS SAID.

2. PAY YOURSELF FIRST….EVEN IF IT IS $10.00 PER PAYDAY…PUT IT IN SAVINGS…

3. IF YOU HAVE A 401K WHERE YOU WORK, WHEN YOU GET A RAISE, HAVE THAT AMOUNT DEPOSITED IN YOUR 401K…BECAUSE IF YOU DON’T YOU WILL GET IN A HIGHER TAX BRACKET AND IT WILL GO TO THE GOVERNMENT….DO YOU WANT THAT? BY DEPOSITING IN A 401 YOUR NET PAYCHECK WILL BE MORE…..EVENTUALLY YOU WILL HAVE ENOUGH IN THERE YOU CAN BORROW AGAINST IT SAY FOR A DOWN PAYMENT ON A HOME…THEY WILL AUTOMATICALLY TAKE PAYMENTS OUT OF YOUR PAYCHECK.

RAY Says:
July 16th, 2009 at 7:31 am

Pay the bills you owe if you owe them. Why have you put them off? It’s easy to get a credit card but hard to repay it. Consider a secured credit card so you are using your own money as collateral. That will help boost your credit. Don’t get into the credit card trap. Build your credit for what you really need, not for things you want. Consider applying for credit for a car or home rather than for a credit card to use to buy shoes and end up paying more with interest. You can find credit card rates at the site below:

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