If you have no trade lines right now, that’s ok. We all have to start somewhere. If you have bad credit and no trade lines, I recommend that you get a secured credit card at your bank or at a credit union (this can be done for as little as 100-300 dollars) Try https://www.orchardbank.com. If you just have no credit, go to a department store to get a credit card, like Macys. They will give you a card as long as you have a checking account. If that does not work, get a secured card from a Bank or a Credit Union. (Note: Choosing to not have a credit card will not help you improve your credit)
Once you have some trade lines here is what you need to do. You need to make your payments on time, that’s a given. The one thing that affects your credit in the biggest way is you’re proportions of balances to credit limits this affects about 40% of your credit score. If they are too high on revolving accounts, that will cause your score to be a lot lower than it needs to be. What that means is, if you have a credit card that has a $1000 dollar balance, you only want to use $500 dollars of the available balance. That will keep your balance to revolving credit limit below 50%. All of your credit card balances should be below 50% of the limit. This will make your credit score higher. (Note: Always have some king of a balance or it will not help your credit score.)
Now just a Warning! A lot of people think if you pay off your collections it will raise your score. That is not true. In fact, it will lower your score anywhere from 20-40 points which is a lot. The reason is when you pay it, the collection companies re-report it as a current collection that is paid. The only way it makes sense is if the collection company agrees to give you a letter stating that it is no longer a collection and that it is to be removed from your credit. In which case, you can use the letter to get it removed from your credit. I recommend that if you do this, you have them fax it or give it to you in person the moment you pay it. If you have them fax it, you should have them mail it as well. Once you have the letter, you can use that as proof to remove it from your credit so you can dispute it to the credit bureaus Experian, Trans Union and Equifax.
Once you have some trade lines here is what you need to do. You need to make your payments on time, that’s a given. The one thing that affects your credit in the biggest way is you’re proportions of balances to credit limits this affects about 40% of your credit score. If they are too high on revolving accounts, that will cause your score to be a lot lower than it needs to be. What that means is, if you have a credit card that has a $1000 dollar balance, you only want to use $500 dollars of the available balance. That will keep your balance to revolving credit limit below 50%. All of your credit card balances should be below 50% of the limit. This will make your credit score higher. (Note: Always have some king of a balance or it will not help your credit score.)
Now just a Warning! A lot of people think if you pay off your collections it will raise your score. That is not true. In fact, it will lower your score anywhere from 20-40 points which is a lot. The reason is when you pay it, the collection companies re-report it as a current collection that is paid. The only way it makes sense is if the collection company agrees to give you a letter stating that it is no longer a collection and that it is to be removed from your credit. In which case, you can use the letter to get it removed from your credit. I recommend that if you do this, you have them fax it or give it to you in person the moment you pay it. If you have them fax it, you should have them mail it as well. Once you have the letter, you can use that as proof to remove it from your credit so you can dispute it to the credit bureaus Experian, Trans Union and Equifax.
Developing credit and how you manage your credit is the most important thing you can do. You can also dispute items that are reporting as bad dept as well. Refer to the attached form below Full Credit Pack.
What I recommend first is that you need Trade Lines. What are Trade Lines? They are credit cards and accounts that you pay monthly that report to all Three Bureaus (Experian Trans Union and Equifax). It is best to have at least one trade line that has a $2500 balance or more and three others that you have maintained for at least 24 Months.
What I recommend first is that you need Trade Lines. What are Trade Lines? They are credit cards and accounts that you pay monthly that report to all Three Bureaus (Experian Trans Union and Equifax). It is best to have at least one trade line that has a $2500 balance or more and three others that you have maintained for at least 24 Months.
Free self help Credit Repair & Dispute Pack. Other company may charge $600-$1200 dollars to do this same thing.
WARNING: Before using the forms make sure you read the directions
We are not affiliated with any mortgage lender or broker nor are we claiming to be. We are a local Washington State consumer mortgage helper web site. We are based in the Marysville, WA area. This web page is subject to change with out notice do to variable changes in mortgage programs available with various companies.
