How to Repair Your Credit and Raise FICO
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2. Borrow Someone Else's History: Being added to
someone else's credit card account as an authorized user can
instantly improve your credit report if that person's credit
is in good shape. (The opposite can also happen, so make sure
you pick the right person.) A cooperative credit issuer
imports the card user's account history into your report so
that you can benefit from the other person's good financial
habits. Not all credit issuers do this import, though, so
it's important to call first and ask. There's another plus to
being an authorized, rather than a joint, user: You're not
liable for any debt the original account holder runs
up.
3. Get Some Credit or Charge Cards If You Don't Have
Any: You need to actively use some plastic to rebuild your
score. Although it's anyone's guess how many cards are
optimal, it's a safe bet that you'll eventually need more
than one - but less than a dozen. If you still have accounts
you can use, that's great. If your accounts have been closed,
you'll need to start from scratch. 4. Apply for a
Secured Card: Secured cards give you a credit limit that's
generally equal to the deposit that you make. You want a card
that reports to all three credit bureaus, that doesn't charge
an application fee or outrageous annual fees, and that
converts to a regular, unsecured card after 12 months or so
of on-time payments. Get department store and gas
cards. These cards tend to be the easiest unsecured plastic
you can obtain. After you've had your secured card for a few
months, apply for one of these - and perhaps a second one
about six months later. Don't rush this process, because
applying for too much credit in too short a time period can
hurt your score.
About The
Author
Michael Saunders is president
of Information
Organizers, LLC. He has an MBA from the Stanford
Graduate School of Business.
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