How to Build Credit from No or Bad Credit

I have a few tenants.  They can all afford to pay the monthly rent but cannot secure a purchase loan to buy a house. One of them even closed his bank account recently because of the excessive fees.

I have decided to help them to improve their credit score, so hopefully in due time, some bank will be willing to extend a loan to them to buy houses.

It all bores down to the issue of credit. You’ve got to have good credit to get credit. So if you have  bad credit no credit history at all, how should you go about?

It really depends upon your personal circumstances.  Debtkid.com has a good write-up on how to raise your credit score fast and free.

If you just don’t know where to begin, try the following three tips first.

1. Piggyback on Someone Else’s Good Credit if you do not have a credit history

Piggybacking is a technique that allows consumers with good credit to help boost other’s credit scores by adding them as authorized users on accounts. If you haven’t heard the term before, it’s not a new thing by any means.

Parents have used the technique for a long time to help their children build solid credit while young. So, if you have a spouse, relative, or close friend with good credit who is willing to add you as an authorized user on his or her account, you’re in luck!

This may be the fastest way to establish a credit history without actually securing a credit card in your personal name.

2. Get a Secured Credit Card from Your Bank

Ask your bank where you have a checking account if they offer secure credit cards. Chances are they do, and secured cards are one of the best options for individuals building or rebuilding their credit histories.

They’re called “secured” credit cards because your credit limit is secured by the amount you deposit in cash with the creditor. For example, if you deposit $1,000 in cash, then your credit limit will be $1,000. And since you have basically pre-paid for the maximum amount you may charge to the card, the creditor is guaranteed you will never miss a payment.

In return, most banks will report your activity on a monthly basis to the credit bureaus just as they would for a “regular” credit card.

If your bank does not offer one, then there is Capital Bank. It currently offers a credit card, that charges 17.5% interest and an annual fee of $29.  Find the Capital Bank Open Sky Secure Visa Credit Card on this page to apply.

The truth is, establishing a good credit history at the youngest possible age has never been as important as it is today. Doing so will not only save you plenty of headaches in the long run, but your pocketbook will thank you as well.

Don’t waste any more time procrastinating. Follow these three tips today and begin your journey to excellent credit on the right path.

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