So you’re on this quest to build your credit and raise your scores, but you’re finding it difficult to get any bank credit cards. What’s a person to do? Use credit cards.
Aging Credit Cards
New accounts on a credit report doesn’t carry as much weight as older accounts. For accounts in good standing at least two years old or more, there is more “weight” to credit scores. For this reason, never – ever, close any credit card accounts in good standing, even if they’re not being used. Your cards should age like fine wine.
Furthermore, If you’ve followed the instructions in my articles from our Credit Series, you SHOULD be using your cards. And while using your cards accordingly – i.e. using them each month to pay your everyday bills instead of cash – you should see a jump in scores. This will eliminate any risk of unused cards being closed due to inactivity. It’s important to note that you should spread out all your bills amongst all your cards, so as to avoid any cards being closed due to inactivity.
For Waiting Patiently, Here’s The Tip:
If you’re at the early stages of the credit building process through the use of credit cards, and struggling to actually get credit cards, these 2 tips will help to improve that. Let’s say you have some credit cards that aren’t bank issued credit cards, and you want to get a bank issued credit card and you’re having some difficulty with that. Here are 2 tricks that will help you get a bank secured card sooner:
Tip # 1
- Find someone you trust…..A family member is preferable……A parent is even better.
- This person must be very responsible.
- They must have good credit.
- The individual must have credit cards.
- Finally, they should have credit cards that are more than two years old.
Ask to get a card in your name, as an authorized user on their account. Don’t under any circumstances use this card. Let the original account holder continue to use the card as normal. You just want their good credit to also migrate on to your credit history. You want their aged card – and it’s good activity – to also show up on your credit. You’ll have instant, aged, credit card accounts on your credit report when they allow you to become an authorized user of a card.
Make sure to let this person know that the card will not be used, they can keep the card, you just want to get the good credit on your credit history. Now, there are risks involved in this. If the original account holder gets into credit trouble, their bad credit is going to show up on your credit report. So it must be someone that you know that has the means and the ability to pay their bills; someone that you’re close enough to, who will let you instantly know when their financial situation changes. This person must be someone that you know is ridiculously strict about paying their bills, someone who would rather lose a limb and an eye instead of being late paying a bill.
If you’re able to get 2 to 3 cards that are owned by someone else but you’re an authorized user and the individual(s) have excellent credit, their excellent credit will show up on your credit history and boost your scores almost instantly.
**My final word of advice to you is this: Choose your people wisely.
Tip # 2
Bank secured credit cards.
Banks are now doing more of this this. Bank of America offers just such a card. Secured cards work like this: You “secure” the card with your cash that the bank holds. Whatever that amount is, that’s what your credit limit will be. You’ll use the card just like a normal card, where you’ll pay interest on any balances and you can pay a minimum payment each month, or pay the card off in full. In about a year of excellent payments, request the card be converted to a non-secured card, or in many cases, the bank will do it automatically.
Why would you bother with a bank secured card? Because traditional bank credit cards carry more weight than credit cards from other sources. As a result, they help to improve your scores faster.
These are just one of many steps that improve credit scores over time. If you’re thinking about purchasing a home, don’t wait until you’re ready to buy to begin working on getting your credit back on track, that’s too stressful. Start with small, smart steps in advance to guarantee an easier process later.
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Learn More About Improving your credit:
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Andrea Davis is a licensed Real estate broker in the state of Georgia, many years experience working in the Atlanta real estate market, licensed since 1996. As a former loan officer, Andrea is passionate about educating buyers, sellers and renters, and firmly believes in the power of education and knowledge. Send questions to her at firstname.lastname@example.org.
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