Go Back   The Finance Forums > Finance forums > Credit Ratings



Credit Ratings Issues of credit ratings and credit scoring here.

Reply
 
Thread Tools
  #1  
Old 10-23-2006, 01:32 PM
bangfor bangfor is offline
Member
 
Join Date: Oct 2006
Posts: 44
Default Improving credit rating

One recommended way is to take out a debit card from the same financial company and use it for a long time for paying bills, receiving payments such as pays and the like, so that, at one point it's possible to show for any lender that there’d been some good financial performance, and that could erase some of the bad credit history.

Reply With Quote

Old Sponsors
  #2  
Old 10-25-2006, 09:07 PM
kelkat's Avatar
kelkat kelkat is offline
Senior Member
 
Join Date: May 2006
Location: United States
Posts: 133
Default Re: Improving credit rating

A debit card doesn't help your credit rating at all. The best way to increase your credit rating is to borrow money against a CD or savings for a six month period or up to a year. Then repay it.
Reply With Quote

  #3  
Old 10-29-2006, 01:09 PM
taiarain's Avatar
taiarain taiarain is offline
Member
 
Join Date: Oct 2006
Posts: 98
Default Re: Improving credit rating

Debit cards don't affect the credit rating at all.

The best way to improve a credit rating is to stop doing the things that negatively impacted it to begin with and wait. Make your payments on time. Make more than the minimum payments. Ensure that your debt:income ratio is improving.
Reply With Quote

  #4  
Old 11-12-2006, 07:40 AM
destiny_star200 destiny_star200 is offline
Junior Member
 
Join Date: Nov 2006
Posts: 5
Default Re: Improving credit rating

This is what im trying to do but it seems im fighting and loosing battle!
I do pay the debts that ive taken out most recently .i.e no credit check loans etc!
But i still get refused for credit cards or loans from the bank!
Its also important to know for people that every time you apply for a credit of some kind it marks your credit rating and not in a good way so we're just fighting and loosing battle it may seem!
Reply With Quote

  #5  
Old 11-17-2006, 04:51 PM
bangfor bangfor is offline
Member
 
Join Date: Oct 2006
Posts: 44
Default Re: Improving credit rating

Debit cards are a proven way of restoring bad credit rating and financial advisers recommend it if you had come across one of them. The idea is to give the creditors your spending and bill paying pattern that should be in a good order. What would you do if you don't have a saving or anything else you can use for borrowing?


Reply With Quote

  #6  
Old 10-21-2007, 07:28 PM
financeman45's Avatar
financeman45 financeman45 is offline
Junior Member
 
Join Date: Oct 2007
Location: California/Los Angeles USA
Posts: 17
Default Re: Improving credit rating

Quote:
Originally Posted by bangfor View Post
One recommended way is to take out a debit card from the same financial company and use it for a long time for paying bills, receiving payments such as pays and the like, so that, at one point it's possible to show for any lender that there’d been some good financial performance, and that could erase some of the bad credit history.


One thing that seemed to work for me when I had really bad credit, was I got a secured Capital One MasterCard. I used it for gas every other month and paid it on time, but I always overpaid by $10-$20 every time. So I had a negative balance. My credit rating shot up really fast and within about 6 months I started getting pre-approved cards from big banks.
Reply With Quote

  #7  
Old 09-21-2008, 05:52 PM
jezabela jezabela is offline
Junior Member
 
Join Date: Sep 2008
Location: sc
Posts: 10
Default Re: Improving credit rating

I had bad credit then ok credit after opening a business guess the world thought I had money . When I sold it everything crashed I would give my left arm to be back on top
Reply With Quote

  #8  
Old 09-26-2008, 01:00 PM
sahota7 sahota7 is offline
The Finance Forums
 
Join Date: Sep 2008
Location: London + United Kingdom
Posts: 37
Default Re: Improving credit rating

I don't think a debit card can help you increase your credit rating. What has always worked for my clients is by getting them to take a credit card out with any bank, use some of the credit (not a lot is required) and pay it back quickly. This shows consistency in staying in credit and helps you build your score back up.
Reply With Quote

  #9  
Old 10-02-2008, 09:34 PM
skins_fan skins_fan is offline
Member
 
Join Date: Sep 2008
Location: Texas, USA
Posts: 36
Default Re: Improving credit rating

I agree that debit cards don't help your credit or they would show up on your credit report. If you have an overdraft account associated with the debit card this can go on your credit report and if properly managed may help.

The debit card is just another access to your checking account with out having to write a check.

Build credit by paying all your bills and on time, keep credit cards below 35% of available credit (some say 50% but 35% is better).

Check your credit report often and make sure everything is reported correctly. Also the accounts you have make sure all information is reported, its bad to have the amount owed recorded and not the total credit limit as this hurts your debt to income ratio which is a important piece of your score.
Reply With Quote

  #10  
Old 10-24-2008, 11:14 PM
pants711 pants711 is offline
Member
 
Join Date: Oct 2008
Location: San Francisco, CA USA
Posts: 58
Default Re: Improving credit rating

Quote:
Originally Posted by bangfor View Post
Debit cards are a proven way of restoring bad credit rating and financial advisers recommend it if you had come across one of them. The idea is to give the creditors your spending and bill paying pattern that should be in a good order. What would you do if you don't have a saving or anything else you can use for borrowing?
I know that this thread is old, but I have to throw my two cents in...

Debit or check card activity is not reported to credit bureaus (CBs). They are just an electronic replacement for writting a check. If you wrote a check or went to the bank and withdrew $500 to buy something, do you really think the CBs would find out and/or care? No. The only way that a bank would send info about your checking account to the CBs, is if your account was repeatedly overdrawn or you somehow screwed the bank over.

This is what I did when I had very little money in the bank and no credit history. I have suggested this plan to a couple of friends who are trying to repair their credit and it has worked wonders for them as well.

Save up $800-1500. It may take time for some, but if you scrimp and save, it can be done.

Go to your bank. Sit down w/one of the associates, not the tellers.

1st, open a secured credit card for $500. You wont be denied because a secured card means you give them a "deposit" of $500, or however much you can part with, and they issue you a credit card against your "deposit". Use the card every month, to buy gas, food, etc. but keep the balance low, e.g., never more than $150 for $500 limit. When the bill comes, pay more than the minimum but not the full balance, every month. You want to carry a little debt, e.g., $20-$30 worth, all the time but you don't want to get wacked with too much interest. If you pay your bill on time every month, the bank will usually refund your deposit within 6 months to a year max. Once you get your deposit back, you can start paying your balance in full every month, but don't close the account. Use the card at least every six months after that to keep it open. You want to start establishing long term revolving credit.

2nd, open a CD account for 6, 9, or 12 months (12 is best) w/$500 to $1000. Whatever the minimum you can get away with and/or afford.

3rd, take out a personal loan A.K.A a collateral loan, against the total CD deposit amount. Now, if you are REALLY bad with money, you can literally pay back the loan on the spot and it will appear as a positve installment loan on your credit reports, but I recommend you pay monthly installments for the 6,9 or 12 months to show you can be responsible over an extended period of time. Take the loan and use it constructively. Open a high yield savings account, pay off exisiting debt, open another CD account or, if that much money is too tempting, put it all on your secured credit card, i.e. WAY over pay and show a negative balance, and use the card to pay your collateral loan back.

This can all be done in one session, usually through the same associate. It took me about 45 minutes when I did it. I guarrantee if you take these steps, your credit ratings will improve-whether you have bad credit or no credit history at all. The nice thing is, you get all of your money back eventually w/a little interest!

I hope this helps someone out there....

Last edited by pants711; 10-24-2008 at 11:34 PM.
Reply With Quote

  #11  
Old 11-11-2008, 12:49 PM
LifeisGood LifeisGood is offline
Junior Member
 
Join Date: Sep 2008
Location: Virginia
Posts: 20
Default Re: Improving credit rating

Debit card does not help you build or improve your credit ratings.
Reply With Quote

Old Sponsors
  #12  
Old 10-09-2010, 02:53 PM
eddie1 eddie1 is offline
Junior Member
 
Join Date: Oct 2010
Location: Bedfordshire, England
Posts: 3
Default Re: Improving credit rating

Abusing your debit card and going overdrawn can negatively affect your credit score. I'm not sure that it can improve your credit score though.

A credit card can improve your credit score by building up a credit history which demonstrates that you can manage your finances responsibly. This is especially useful if you have no credit histroy at all, or if you have previously had bad credit it can help to rebuild your credit profile.
Reply With Quote

  #13  
Old 10-27-2010, 05:12 PM
cjscully cjscully is offline
Member
 
Join Date: Oct 2010
Location: California USA
Posts: 90
Default Re: Improving credit rating

Even getting a secured card won't help much if you've got old outstanding debt showing up on your credit report that you haven't paid.

The BEST sequence of action would be as follows:

1. Get a copy of your credit report and look at what is being reported to the credit bureaus as outstanding debts.

2. Dispute anything that you know to be false or erroneous information. Do not dispute debts you actually owe.

3. Pay off the outstanding debts you have.

4. The above actions will create some improvement in your credit score.

5. Get a secured credit card. Don't carry any balances on it. Pay it in full when the bill comes.

6. Eventually you will get offers in the mail for unsecured credit cards. Open no more than three unsecured credit card accounts.

7. Use your new unsecured cards the way you used the secured card - pay them off in full when the bill comes.

Alternatively you can skip steps 1-4 even if you have outstanding debt on your credit report if you are willing to wait 7 years before you try to establish new credit. The credit bureaus stop reporting derogatory information after 7 years.
Reply With Quote

  #14  
Old 11-01-2010, 09:56 AM
goodyphilips goodyphilips is offline
Senior Member
 
Join Date: Aug 2010
Location: New York
Posts: 156
Default Re: Improving credit rating

Yes absolutely to have a credit rating, you ought to have a credit first. using debit cards does not affect your C.R in any way.
Reply With Quote

Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



» Boards




All times are GMT -4. The time now is 04:17 PM.


Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.