How to Improve Your Credit Score (Part IV)

As I stated in my last article, the next task is to rebuild our credit history with at least five perfect accounts. These take about six months to take affect on the computer model, so you don’t want to wait until the last minute. It won’t work that way.

How to Create New Credit Accounts

Here are five proven suggestions of how you can create new credit accounts. Obviously, once they are created you NEVER want to be late, so managing your credit is even more important. One good note is that you don’t need to borrow a lot of money to create new accounts. Nor must you have a lot of money.

• Go to your local bank or credit union where you already have an account. Incidentally, you MUST live life with a banking relationship. My Daddy in Texas taught me that when I was 14 years old, and I have a ton of stories to share about how that advice has helped me down through the years. Ask to open a secured savings account for $250 to $500 and use that account to provide VISA with the guarantee that they will never lose their money. That is because you request a VISA credit card with a maximum limit of $250 to $500. The bank already has your money and you can’t spend any more than your limit. Everybody wins. Use the account sparingly and only for needed purchases and ALWAYS make your payment on time.
• Ask your bank a month or so later to do the same with a Master Card account.
• Next if you need a piece of furniture (only if you need it), buy it from your local furniture store and put 50% down payment. They will more than likely sell the loan to a credit company and you then can pay the loan off as quickly as you like. That history will remain on your report forever.
• Do the same with a jewelry purchase, but again remember these are needed items that would have been purchased probably for cash anyway.
• Virtually all of us need a car in California. When that need is upon you arrange for financing terms with a dealership that will report your credit history to the three Credit Data Banks. Insist that they help you build your credit as you make every payment on time. And, don’t borrow too much to weigh you down and possibly prevent you from being able to purchase a home in your near future. Let’s not shoot ourselves in the foot!

I am sure that you can think of other ways to build your credit. Your rent and utility bills are not reported to the credit bureaus though they can be used as “alternative credit” to help prove your ability to repay. However, they will not be reflected in your credit score.

However, following the suggestions in this article and the previous four articles will help immensely as your “turn the ship around”. In fact, I always describe a large credit repair process like turning an aircraft carrier at sea. Regardless how hard I turn the ship, it still keeps going straight for a couple of miles and then turns ever so slowly. This is like the job of repairing our credit in most cases. BUT, it does turn and it can be repaired. It will work!

Peter M. Galde is the founder and principal at Cornerstone Capital Funding, 14520 Mono Way, Suite 110, Sonora Ca. 95370. Peter has 28 years experience in the finance industry. E mail Peter or call him on 209 532 7711 for further information.