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Repairing credit

Bionic MonkeyBionic Monkey Registered User, ClubPA regular
edited February 2010 in Help / Advice Forum
My wife and I are just about done paying off our credit bills from our college years, and the only big things we have left are the student loans. At this point, I'd like to start repairing my credit, but I'm not especially sure on how to go about this.

What I'm thinking is getting a credit card, which ever one will let me, and just paying a bill a month with it, and then paying off the card, and just keeping this up for a while, never using the card for any actual purchases. Is there a better route to go about this? Something that will improve my score more quickly? Anybody else gone through this that can give me some pointers? I understand applying for a lot of cards will hurt my credit too, so what's the most likely company that will give me a card?

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    RUNN1NGMANRUNN1NGMAN Registered User regular
    edited February 2010
    What do you mean by "repair"? What did you do that gave you bad credit? That's going to make a big difference.

    If you just had a lot of credit cards with a big balance, that wouldn't have given you bad credit. I had over $10K in credit card debt a few years ago, and my credit score is very good.

    RUNN1NGMAN on
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    KillgrimageKillgrimage Registered User regular
    edited February 2010
    I dunno, a quick google search turns up pretty much what you are saying/doing now. Paying bills on time, paying off debts, getting a credit card and paying it off each month. One extra thing is getting a family member or friend to co-sign on a small loan or credit card that you pay off in a timely manner...not sure how good an idea that is, but if you are rebuilding credit that's one way to go.

    I don't think you can speed up the process that fast :/ The point is to build trust, and you can't do that overnight.

    Killgrimage on
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    ApogeeApogee Lancks In Every Game Ever Registered User regular
    edited February 2010
    If you never missed a payment, your credit is fine. Great, in fact, as it shows you can handle large debt and still pay it off with no problems.

    Apogee on
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    Bionic MonkeyBionic Monkey Registered User, ClubPA regular
    edited February 2010
    RUNN1NGMAN wrote: »
    What do you mean by "repair"? What did you do that gave you bad credit? That's going to make a big difference.

    If you just had a lot of credit cards with a big balance, that wouldn't have given you bad credit. I had over $10K in credit card debt a few years ago, and my credit score is very good.

    Yes, sorry for not being more clear. We got in over our heads, and a lot of bills went unpaid back in college. Our credit was bad, and now I'd like to start repairing some of that damage now that all our monthly money isn't going out to pay off stuff we bought 8 years ago.

    Bionic Monkey on
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    noir_bloodnoir_blood Registered User regular
    edited February 2010
    I was in a very similar position as yourself, and what you're saying is exactly what I did. I actually kinda did it unknowingly, to the point that just last year I was still thinkig I had horrible credit. Then I went to get a car, and what do you know, I'm actually accepted at a good percentage.

    That's also a lot of help by the way. Cars, cell phones(I think) and such.

    It's going to be a bit tricky right now, because credit card companies aren't handing credit as they used to, and more to the point, they are liable to actually cancel credit cards if they see you're paying them off every month(seeing as they aren't making any money from you)

    noir_blood on
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    ThundyrkatzThundyrkatz Registered User regular
    edited February 2010
    I recommend that you pull your credit report and see what you are dealing with. Can't fix what you don't know is broken.

    Its free 1x per year here... AnnualCreditReport.com

    Always a good idea to make sure all the information on there is accurate

    Also, you mentioned that you had unpaid debts in your past. Are you current now on all your debts? Make sure you repair any problems from your past before you move forward.

    Also, a history of steady predictable payments is your best friend. So, erratic large purchases on your new card followed by large lump sum payments will not look as good. This is why car payments or cell phone payments or mortgage and student loan payments looks so good. That long, steady payment history is a good indicator of your ability to continue making predictable payments.

    Thundyrkatz on
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    LoathingLoathing Registered User regular
    edited February 2010
    noir_blood wrote: »
    It's going to be a bit tricky right now, because credit card companies aren't handing credit as they used to, and more to the point, they are liable to actually cancel credit cards if they see you're paying them off every month(seeing as they aren't making any money from you)

    Wait, what?

    So you're saying that they have the 'ability' to just outright cancel you're current credit card if you are paying all your bills on time, making payments and not racking up debt?

    The fuck?

    Sorry if that sound's sarcastic, but I honestly want to know what the fuck is up, if that is actually true.

    Loathing on
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    khainkhain Registered User regular
    edited February 2010
    Loathing wrote: »
    noir_blood wrote: »
    It's going to be a bit tricky right now, because credit card companies aren't handing credit as they used to, and more to the point, they are liable to actually cancel credit cards if they see you're paying them off every month(seeing as they aren't making any money from you)

    Wait, what?

    So you're saying that they have the 'ability' to just outright cancel you're current credit card if you are paying all your bills on time, making payments and not racking up debt?

    The fuck?

    Sorry if that sound's sarcastic, but I honestly want to know what the fuck is up, if that is actually true.

    I would assume that in the contract you agreed to the bank can cancel it whenever they want, however what noir is saying makes absolutely no sense since banks still make money on every transaction regardless of if you rack up debt or not.

    khain on
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    HachfaceHachface Not the Minister Farrakhan you're thinking of Dammit, Shepard!Registered User regular
    edited February 2010
    Loathing wrote: »
    noir_blood wrote: »
    It's going to be a bit tricky right now, because credit card companies aren't handing credit as they used to, and more to the point, they are liable to actually cancel credit cards if they see you're paying them off every month(seeing as they aren't making any money from you)

    Wait, what?

    So you're saying that they have the 'ability' to just outright cancel you're current credit card if you are paying all your bills on time, making payments and not racking up debt?

    The fuck?

    Sorry if that sound's sarcastic, but I honestly want to know what the fuck is up, if that is actually true.

    Credit card companies can do pretty much whatever they want, for any reason. The credit card agreement you sign when you open a card puts you on the hook for your debt but gives the card company almost no obligations whatsoever. And yes it is fucked up.

    Hachface on
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    LoathingLoathing Registered User regular
    edited February 2010
    Wow.

    Loathing on
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    DjeetDjeet Registered User regular
    edited February 2010
    Oh yes, they can do all kinds of shady BS. I've had one credit line eliminated due to inactivity, and I've had one credit limit reduced to $100 over the balance I was carrying on it. The card split and I asked for a new one and they cut the limit. They never sent me a new card, but I figured I shouldn't ask for another, they might just cut the limit again.

    And I have great credit, well I did until I had $8K of credit evaporate, now I just have pretty good credit. They just did it, I assume they were trying to take some liability off their balance sheets; this was about 6 months ago. If you head over to consumerist you'll find all kinds of stories about this kind of thing happening (particularly by Chase and BofA).

    If you're carrying a balance they probably won't just cancel the card, but they might reduce the limit to the balance carried or to some ridiculously low amount if you don't carry a balance, and they can also jack the rate on you.

    Djeet on
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    DeebaserDeebaser on my way to work in a suit and a tie Ahhhh...come on fucking guyRegistered User regular
    edited February 2010
    Hachface wrote: »

    Credit card companies can do pretty much whatever they want, for any reason. The credit card agreement you sign when you open a card puts you on the hook for your debt but gives the card company almost no obligations whatsoever. And yes it is fucked up.


    If you ever find your asking yourself, "Can an insurance company do X?", where X is something enormously fucked up, the answer is "yes", yes they can. Not only can they do X, they can legally do X while face-fucking your purty mouth.

    Deebaser on
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    MalkorMalkor Registered User regular
    edited February 2010
    Credit card companies hate people who practice good credit use.

    Paying off your debts before they can charge interest, not going over your limit, or even close to the limit cost them money.

    Because basically you're using their services for free. I'm not sure if there's a fast way to build up your credit score, but if you have a credit card, or credit at a business (like for home heating gas/oil) and you're good about it for awhile your credit score will go up.

    Malkor on
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    WileyWiley In the dirt.Registered User regular
    edited February 2010
    Their perspective is that you have 10k of credit that isn't being used, so they aren't getting to charge 19.9 apr on it. They would rather give that 10k to someone who will charge it up so they can bring in some money on interest.

    Wiley on
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    ApogeeApogee Lancks In Every Game Ever Registered User regular
    edited February 2010
    Malkor wrote: »
    Credit card companies hate people who practice good credit use.

    Paying off your debts before they can charge interest, not going over your limit, or even close to the limit cost them money.

    Because basically you're using their services for free. I'm not sure if there's a fast way to build up your credit score, but if you have a credit card, or credit at a business (like for home heating gas/oil) and you're good about it for awhile your credit score will go up.

    Red'd for false, it's a common misconception. Credit card companies take a 1-3% cut from everything that goes on the card. That is their main revenue stream. They can make more from debt, yes, but it is much more risky. Most people whole max out cards and go bankrupt end up paying them back very little.

    Apogee on
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    Torque MonkeyTorque Monkey Registered User regular
    edited February 2010
    If you don't already have a credit card/active loans(mortgage, personal, auto), look in to what will suit you best and pay it in a timely manor. If you pull your report and your score is low, inquire at your bank about a secured credit card, and you may want to have your wife do the same. Pay on those for a while, making bill payments or whatever you please on them, and keep the balance below 10%.

    Do that for a year and you'll be in good shape.

    Torque Monkey on
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    Alex22Alex22 Registered User new member
    Great feedback and advice here! As far as my credit score is concerned, it started improving only when I began disputing negative items and living within my means. The dispute process works, not over night, but it works. I never thought I would be able to effectively use my credit again. Thanks for being here!

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