What can i do to build credit???

i had a little credit... now its bad credit... how can i build it back or get good credit? what the easiest way?

Kalvin gave a breakdown of what makes up your score, and some of the other posters explained what you should do, but I'm going to give you a "blueprint" on exactly what you need to do to not only get it back on track, but the easiest way to do it.

I'll break down what makes up your score again first, but I'll explain what each of them means for you:

1. Payment history 35%- This is the single most important component of your credit history, whether or not you pay what you owe. If you have credit cards or a loan, a missed payment even if it's a more than 30 days can hurt your score.

What you can do to help yourself is by opening up a checking account at a bank if you haven't done it already. This does several things for you. It creates a relationship between you and a financial institution so that by becoming a longstanding customer, you can make yourself more available to other products that are offered like car loans, credit cards, mortgages, student loans, etc., it provides you a means of managing your money, and most importantly it serves as a tool to help you pay on time, especially if the bank offers online bill-pay. You can set up scheduled payments for all your bills so that you will never be late again.

2. Total debt owed vs. available credit- 30%: This is the 2nd most important component of your score. What this means your ability to borrow versus what you oew already. A good example of this is having credit cards with high credit limits, but either having a low, or better yet a 0 balance. This shows that you're not relying on your credit a lot. Maxing out your credit cards is a bad example of this. You should never let the balances on your credit cards exceed 30-35% of your avaiable credit. For example, if you have 3 credit cards with a total limit of $1500 for all 3, you should use no more than $125 on each one, or $375 total.

3. Length of time establishing credit-15%: What this means is how long you've been establishing credit. It looks better on your score if you've had opened and maintained credit cards for a long time than opening up several cards for a shorter period of time. Credit is designed to be used over time. Another example would be a card that's been opened for 10 years, would report better than having 2 cards opened for 5. The reason I say this is that if a card has been opened that long, the limit should be so high that there wouldn't be a need for any additional cards. Also, don't believe the hype about closing credit cards that's not being used, especially if they've been opened a while. Closing these types of accounts also shorten what's called the average age of accounts which gives the appearance that credit has been established more recently than it has.

4. Types of credit established- 10%: What this means is that the scoring system is designed to see how well 2 types of credit are established, revolving and installment. Revolving accounts are your credit cards and line of credit, while installment accounts are personal signature loans, car loans, furniture and appliance loans, student loans, and mortgages. There should be a balanced mixture between the 2 accounts. For example, 3 revolving accounts and 2 installment accounts.

5. Inquiries and new accounts 10%: Anytime that you apply for credit, it creates a "hard inquiry" which drops your score several points (up to 5) whether you're approved or not. And then even if you're approved an account can take up to 6 months of history before it starts reflecting positive on your report. This is why it's important that if you apply for credit, make it count, don't apply for a lot of credit. Another example if you apply for 4 credit cards, that's 20 points that you've just given away. Also be careful not to open up a lot of new accounts all at once. This ties into what I had mentioned earlier in #3 that credit is designed to be used over time.

Now having said all this, how do you put this to good use? Keep reading...

First, what you should do is gather reports from all 3 bureaus to see what's on there, whether you know what it is or not. The reason for this is to make sure that you're not getting penalized for something that's not yours. A good number of credit reports contain information that's incorrect that can and has affected credit scores. Don't let this happen to you. Check your reports and if there's something that you're not familiar with, dispute it with the credit bureaus. Once you've done that, then you can move on to what's really yours.

Once you've figured out what's on your reports, then you should plan to make arrangements to get them paid. Chances are if you've fallen behind, the account has been charged off and sent to collections. They're more than likely showing up on your reports as collection accounts that are hurting your score. You should make arrangements to try to clear these up before trying to rebuild credit. I posted several links on how to negotiate debts that you have to get them changed to favorable accounts or better yet, get them removed altogether.

http://www.creditinfocenter.com/debt/settle_debts.shtml

http://www.creditinfocenter.com/debt/neg_rating_after_settle.shtml

http://www.creditinfocenter.com/debt/CanCreditorSue4SettlementDifferences.shtml

http://www.creditinfocenter.com/debt/ActualDebtSuccesses.shtml

If you successful in making arrangements to pay back what you owe, then it's time to start building positive credit for yourself. The easiest way to do this is to open a secured credit card. Now the downside to this is that you have to use your own money to put up a deposit as collateral to get a credit line the same amount of the deposit, but this can work in your favor because usually the deposit is linked to a savings account which gains interest while you're buliding credit, so your money isn't just sitting there, and also by adding to the desposit, you can increase your credit line which can help your credit becuase the higher the limit, the better it reports (see #2). For example, if you opened up one with a deposit for $200 to start, and then added at least $100 to the deposit every month, after a year the credit limit would be over $1000. Keep in mind that the deposit is an investment, you'll get it back eventually as long as you manage the card properly. A good example of this is to make a small purchase($20-30) that can be paid off in full on time every month, while adding to the deposit. Usually after a year of doing this, the card either converts to a regular card or a better card is offered, and more importantly the deposit isn't needed anymore and it's given back with interest. So with a secured credit card, you can practically custom build it to a regular card with a high limit. You woudn't be able to do this with any other card. I posted below some links to some secured cards that are pretty good. And if you followed my advice in #1 by opening up a checking and savings account, it's a good chance the bank may offer a secured card. I'd open up to 2 of these. This way, you don't waste points applying and getting declined. You'll have to use your own money to "custom build" your cards, but you can control the limit you have better this way than you would if you had a regular card with a low limit.

Another way to build credit would be by taking a personal loan and use your savings as collateral. This works best if you've opened up a couple of secured credit cards and you have the leftover deposit. You could take out a loan and use that leftover deposit as collateral. Then take the proceeds of the loan and place it in a short-term certificate of deposit so it can gain interest. Make sure that the term of the certificate of deposit is shorter than the loan so that you'll have the money available to pay it back if you need to. This would give you an installment account in addition to the 2 revolving accounts from the 2 secured credit cards I suggested. As long as you pay on time and apply for credit that's necessary, what I mentioned above will give you a "blueprint" on rebuilding your credit!

Good Luck!

Be punctual â€“ Pay all your bills on time each month. Late payments, collections, and bankruptcies have the greatest negative effect on your credit scores.

â€¢ Check your credit reports regularly and take the necessary steps to remove inaccuracies â€“ Donâ€™t let your credit health suffer due to inaccurate information. If you find an inaccuracy on your credit report contact the creditor associated with the account or the credit reporting agencies to correct it immediately.

â€¢ Manage your debts â€“ Keep your credit card account balances below 35% of your available credit limits. For instance, if you have a credit card with a $1,000 limit, you should try to keep the balance owed below $350.

â€¢ Give yourself time â€“ Time is one of the most significant factors that can improve your credit score. Establish a long history of paying your bills on time and using credit responsibly. You may also want to keep the oldest account on your credit report open in order to lengthen your period of active credit use.

â€¢ Avoid excessive inquiries â€“ A large number of inquiries occurred over a short period of time may be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties or overextending yourself by taking on more debt than you can easily repay. Apply for new credit in moderation.

Pay the bills, on time, EVERY time. Only way.

First, make sure all the information on your credit report is accurate.

Second, try to pay off all or any accounts that are currently in collections or make payment arrangements with the creditor to pay off the balance monthly.

Third, any credit card that is over 50% of the available credit line should be paid down to under half of your total credit line. Your credit score is lowered when your available balance is over 50% of your total credit line.

Finally, if you have bad or no credit and have no credit cards try to obtain two credit cards and make sure all of your monthly payments are made on time. This will help increase your credit score. If you cannot be approved for a unsecured credit card, obtain a secured credit card.

I have been to "many" different credit repair sites on the web. Some were pretty good and some were pretty bad. I refuse to use a websitemy rights and using them.Don't pay for information that you can find for free.

take out a loan or credit card and even if the interest rate is a bit high, make payments and remember not to pay late and more than the minimum. over time your credit will build up.

Pay off your debts. Pay on time. Try to consolidate balances. Switch to lower interest rate cards. For existing accounts, call and ask them to lower your interest rate. Negotiate if necessary. If you have balances switch them to the lower rate cards. Try to take a low interest loan and use it to pay off credit card balances. Get your report from TransUnion or Experian to monitor your progress. Try to limit the number of inquiries about your credit. If you are buying something and they need to look into your credit, that inquiry raises a red flag. If you need to buy something and you are approved (with a co-signer) it could help establish your credit. The credit report companies also look at your debt-to-income ratio to determine your score. It takes time to rebuild. Paying on time is best. I hope this helps! my site: http://www.philahomesale.com

best thing to do is have a total of 3 credit cards not more, use each once a month depending on your financial situation use each to buy minor things socks, under shirts etc... pay off each in full each month do this for a 6 month period straight and your score will go up and you will be in good standing, and you dont want large credit limits which you dont use try to keep all under $500 on each card, also you can go to annualcreditreport.com and get your credit profile as of now not your score but what is visible to all creditors, its free everyone gets to pull there credit free every 12 months and NO it does not lower your score to check your own credit, I advise you and all reading this verify all the charges and things on your credit report is true and acurate.....
visit me at www.myspace.com/chicagoground

i think that the below website will help you to raise your credit score.

You will need to get a credit card, Keep a balance on it. Do not pay it off in full every month. You need to keep a balance and pay it off in 6 months. Then start over again. This will show consistent payments and the ability to handle credit properly. You may have trouble finding a credit card company that will give you a card, but if you do the above type of payments you will see a huge plus to your credit score. If you can't get a credit card you may need to get a secured credit card, where you have to deposit $500 in a savings account in order to get a $500 dollar limit on a credit card.

by paying it off it would help. or settling on it with a collections agency. easier than that would be to open another account....don't use it but leave it open. that will improve your credit score.....how much? not sure....but paying off debt will do best.

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