Credit History Bad and Good Design

Perhaps there are no derogatory entries on your credit report; no late pays, no collections. You have one credit card and been paying it religiously for three years.  Your debt to income ratio is in range.  But your FICO score is still low.  Is there anything you can do to improve it?

You’d like to buy a new car but the auto dealer tells you; “We can still get you into the new car you want,” but you don’t qualify for the best interest rate.  However, I’m sure we can you the payments you were hoping for, we’ll just extend the length of the loan.”

A “yes” decision on your part right now will cost you thousands of dollars in high interest.  A “no” decision means no car.  Would it be worth 45 days to rectify the problem?  Of course it is.  And it is easy.  Do this:

First of all, three lines of credit are what lenders look for, not the one credit card you have been paying on religiously.  Apply for one more right away, (not two) because the third trade line needs to be something else.  Something we can help you with.

If your credit score is 620 or lower, apply for a secured credit card, a typical credit card designed for poor-score consumers that will get you started.

Now you’ll need one more line to make three.  This one should not be a credit card as stated above.  Apply for a shopper’s card (a Jewelry Club) instead.  There is one that is really outstanding.  There is a $99 outlay for the member ship and then you’ll want to purchase a product from the company.  The product should be valued at least for $100.  So now you have a two hundred dollar outlay total.

Keep in mind the purchased item is of little subsequence…make it a gift to someone.  Your prize it that this company will give you a $5,000 line of credit across all three credit bureaus (!).  This alone has the potential of raising your credit score 70 points and it is almost immediate.

You do not have to make another purchase from the Jewelry Club and you do not have to maintain the membership if you choose not to.

Go here to get started:  http://apply.creditcardbroker.com/SHA9

The last thing to do is to make certain the other two credit lines have low balances.  You want to maintain 10-20% balances against the limits.

Next, for an explanation of what a debt to income ratio is, watch for December’s blog.

Now go get your new car at the best interest rates possible!