| Previously we discussed how to build a good credit | | | | If you are unable to get a regular credit card, a |
| rating score using some of the more commonly known | | | | secured credit card may be a good option. |
| methods, so this article reveals a few lesser known bit | | | | You will be required to make a deposit generally |
| still highly effective techniques for building your credit | | | | around $200 - $1000 which will give you a credit limit of |
| rating to even greater levels. | | | | the same amount. The benefit of using a secured card |
| But before proceeding here is a quick recap of the 3 | | | | is twofold, in that you cannot exceed your credit limit |
| simple credit building techniques discussed in the | | | | which is great for those who are easily tempted and |
| previous article: | | | | you can use the card often, then repay it by due in |
| - Shelving your unused cards but keeping the credit | | | | order to gain more credit-worthiness through regular |
| facilities open | | | | timely payments and build a good credit rating score. |
| - Using your credit cards and making them work hard | | | | However, you will not want to exceed 30% of your |
| for you | | | | limit at any time in order to gain maximum credit building |
| - Making sure your credit report contains no errors | | | | traction and as mentioned above it must be paid off in |
| The first two above require that you use revolving | | | | full, on or before the due date. |
| accounts (these are credit facilities that allow you to | | | | Also make sure that the card you apply for reports to |
| purchase and pay off) and if you have implemented | | | | all 3 credit bureaus and always check that their setup |
| these techniques correctly your credit rating score will | | | | fees are not over the top. |
| be on the improve with little extra effort required on | | | | Apply for a charge card |
| your part. | | | | For those who have a good credit history, but don't like |
| But not everybody has these credit lines available to | | | | credit cards you might want to consider a charge card |
| them especially with today's stringent lending policies, or | | | | such as American Express or Diners Club. |
| if they do, they feel uncomfortable using them as it | | | | Charge cards require that you pay them off in full |
| could just be a little too tempting to overspend. | | | | every month however they do have a hidden |
| However the reality is: you need credit to actually build | | | | advantage over credit cards and it's this: They do not |
| your credit score (not that this is saying "rush out and | | | | dent your credit score like credit cards do if you |
| get more credit to get your credit score higher!"), so if | | | | exceed a certain percentage of your credit limit - it's |
| are looking for a loan to build credit with here are | | | | called credit utilization. |
| some lesser known but still highly effective tips for | | | | As an example let's say you have a credit card with a |
| building a good credit rating score: | | | | $5000 limit and you go out and purchase $3000 worth |
| Look at using peer to peer loans | | | | of goods during that month then pay it off before it's |
| Known also as social lending, peer to peer lending sites | | | | due. |
| link borrowers to private investors. Two sites are | | | | So you have been using 60% of your available credit |
| Lending and plus there are quite a few more. | | | | and even though you pay it off by the due date, in the |
| You can apply to these institutions and secure loans | | | | eyes of the credit score calculator 'FICO' - 60% usage |
| on fixed terms for up to 3 years. Individual investors | | | | is above what they calculate as "good" and your credit |
| then look at the loan application packages and will "bid" | | | | score will suffer loss. |
| if they are interested in your deal, which is then signed | | | | However charge cards are not calculated on this basis |
| up in due course. | | | | as they don't have traditional credit limits and so FICO |
| The lending sites then report your credit activities as | | | | treats the calculation differently, meaning you can run |
| any other lender would to at least two of the three | | | | your account up to higher percentages without your |
| credit bureaus - Experian, Equifax and TransUnion and | | | | credit score being penalized - a nice advantage if you |
| if you are showing yourself to be diligent and timely | | | | need the extra credit. |
| with your payments, this will of course enhance your | | | | All you have to do is ensure you pay it off in full every |
| credit score. | | | | month and you will be building credibility and more |
| Prosper requires applicants to have a minimum current | | | | credit score points. |
| score of 640 and the Lending Club requires 640 | | | | So there you have 3 lesser known, but still highly |
| minimum - but worth looking at if you are at this level. | | | | effective tips to help build a good credit rating score. |
| Apply for a secured credit card | | | | |