Building (or rebuilding) credit is both frustrating and time-consuming. Using any of the "sub-prime" credit card offers can cost you in higher interest rates and fees. With the higher score requirements of banks now, it is harder than ever to get approved for prime credit rates. Aged primary credit tradelines are older, well-seasoned accounts that someone carefully maintained to build great credit. Acquiring those aged credit tradelines before applying for new credit can increase your scores so you get better approvals and lower interest rates.
Go to annualcreditreport.com to access your credit reports. You can do this once per year at no cost. You can also request credit scores, but there is a small cost for these. When you receive your reports, check them for duplicated accounts, outdated entries and errors. You should dispute these by calling the customer service number listed on the first page of each report, and be sure to follow up in writing. Doing so will help increase your scores. This process will take up to 30 days. Ask for corrected reports with the updates to be sent to you.
Talk with your parents, spouse or other relative about adding you as an "authorized user" on one of their old, well-established credit card accounts. Doing this will add that card account's entire history to your credit report, which will help increase your credit scores. You would not need to actually use the card to have this benefit. This process is commonly referred to as "piggybacking" credit card accounts. There are companies that "rent" this service of adding you to an account for high fees. You are taking a risk in using companies such as this since you know nothing about the owner of the card. It is much safer to work with someone you are close to, since you know that person's financial habits.
Stay in touch with the card owner to find out when she actually called her credit card bank so you will know when to expect the credit card history to hit your credit report. This usually takes 30 to 45 days, depending on the reporting cycle of the bank. Wait the allotted time, and re-pull your credit reports to see if the account is there. If it isn't, wait another 30 days, and request your reports and scores again.
Consider going to your credit union or bank and applying for a small credit card account to help you build your credit. Now that your scores have increased, you might get a fast approval.
Tips
When you pull your credit reports, you might consider joining a credit monitor service for the next year. This will allow you to pull your updated credit reports an unlimited number of times while you are rebuilding your credit.
For more credit help, go to myfico.com, the website for the Fair Isaac Corporation (creator of credit scores).
Warnings
Mortgage lenders may not accept these "authorized user" tradelines as a part of your credit report. They may have their credit service remove the tradelines from the credit report and re-score it without the tradelines. Due to abuse by credit repair companies, this practice was outlawed by Fair Isaac (creator of credit scoring), who later brought it back to life. It is still legal and useful, but could be outlawed again in the future.
Using this method is only a tool to help begin rebuilding your credit. Make sure that your credit is sufficiently established on your own before attempting larger financial transactions, such as buying a home.
Beware of credit card offers with extremely high interest rates and fees. You may be better off getting a secured credit card (secured by a savings account with your own bank or credit union) than to pay the higher interest rates. After a year of good payment history, your bank may release the hold on your savings account. Also, you do gain a small amount of interest which will offset the interest you pay on your new credit card account.
References
- Real Estate Classifieds 1000: 10 Ways To Boost Your Credit
- AnnualCreditReport.com. "All about credit reports." Accessed Aug. 27, 2020.
- Discover. "FREE Credit Scorecard with your FICO Score." Accessed Aug. 27, 2020.
- myFICO. "Free Credit Scores Estimator: Get Your Estimated FICO Scores Range." Accessed Aug. 27, 2020.
- U.S. Congress. "H.R.627 - Credit CARD Act of 2009." Accessed Aug. 27, 2020.
Tips
- When you pull your credit reports, you might consider joining a credit monitor service for the next year. This will allow you to pull your updated credit reports an unlimited number of times while you are rebuilding your credit.
- For more credit help, go to myfico.com, the website for the Fair Isaac Corporation (creator of credit scores).
Warnings
- Mortgage lenders may not accept these "authorized user" tradelines as a part of your credit report. They may have their credit service remove the tradelines from the credit report and re-score it without the tradelines. Due to abuse by credit repair companies, this practice was outlawed by Fair Isaac (creator of credit scoring), who later brought it back to life. It is still legal and useful, but could be outlawed again in the future.
- Using this method is only a tool to help begin rebuilding your credit. Make sure that your credit is sufficiently established on your own before attempting larger financial transactions, such as buying a home.
- Beware of credit card offers with extremely high interest rates and fees. You may be better off getting a secured credit card (secured by a savings account with your own bank or credit union) than to pay the higher interest rates. After a year of good payment history, your bank may release the hold on your savings account. Also, you do gain a small amount of interest which will offset the interest you pay on your new credit card account.
Writer Bio
Joey Campbell spent eight years in real estates sales and property management. She has been active in residential and commercial mortgage for the past 23 years in the Southeastern U.S. Campbell has attended hundreds of seminars, and has written and conducted workshops on subjects such as credit, debt excelleration and prequalifying for residential mortgages.