/* Use this with templates/template-twocol.html */ The Path to Wealth: Three Ways to Add Good Credit

Sunday, November 16, 2008

Three Ways to Add Good Credit

Piggyback

The best possible way to add good credit or establish credit if you have none is to piggyback on someone else’s credit. If you have a friend or relative whom you trust immensely to pay all their bills on time, you can ask them to request a credit card for you as a secondary card holder. By doing this, their credit card company will regularly report to the credit bureaus in your name. This gives the effect of you having been approved for a credit card, though you really didn’t have to do anything.

The one pitfall here is that if you’re friend does not pay their obligation on time, then their negative information will be reported in your name. The best way to avoid any complications is to be made a secondary holder on a credit card that is never used. On the flip side, don’t even allow your friend to give you the card. They can just cut it up or keep it. Either way, it will still be an effective method to build credit for you. Remember, you don’t have to use credit cards to build credit; you just have to have them.

Get a Secured Credit Card

The great thing about a secured credit card is that you don’t have to have credit to get it. You just need to be able to give the $200-$300 up front or whatever you want your spending limit to be. I recommend that you just take the minimum limit and do not use the card. Even though the company is not technically granting you credit—you are securing the spending limit with a savings account—they still report to the credit bureau the exact same way as any other credit card company, providing you with a great opportunity to build credit.

Seek Easy Credit

When it comes to obtaining a credit line, there are definitely some lines that are more easily obtained than others. If you don’t have excellent credit, don’t try to apply for an American Express card. What you can do is go to one of the following merchants:

· Jewelry Stores

· Furniture Stores

· Appliance Stores

· Credit Unions

· Clothing Stores

All of these institutions typically require a lower credit score to be approved. These are places that approve people easily but still report to the credit bureaus which makes them invaluable when it comes to establishing credit.

Things that Will Not Help You

I get so many people that tell me they should have good credit because they have paid their utility bill on time or their cell phone bill on time. Remember, utility companies, landlords, cell phone companies do not ever report positive information. They will only report to the credit bureaus if you fail to pay your obligations. In a word, the can only hurt, not help.


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2 comments:

viny said...

I didn't know that utility companies do not give positive report. This really doesn't help at all in credit report as you said. Thanks for letting us know about that.

The Path to Wealth said...

Yes Viny,
That is surprise to lot of people. The only way your utilities company will report your record is if you request it or you fail to pay.