Rebuilding your credit !
I worked for years and had little credit because I had not one, but 2 instances of becoming homeless. I was homeless for 7 years, but still went to work every day.
I lived with friends and in my car for 6 months with my 2 cats.
Once I finally got a stable place to live, I had multiple credit cards but then I got sick with a long term illness. I became bedridden and was sick for 2 years.
As a result, my credit went to hell.
I read multiple books on credit and came up with some ideas on how to get NEW credit that will help rebuild your credit even when there are charge offs on your credit report.
First, if you can, get a secured credit card.
US Bank, Bank of America, Wells Fargo Bank all have secured cards.
Bank of America wants you to put in $ 300, US Bank $ 200.
Look on the web for other secured cards and pay the balance every month but make sure you look at the annual fee because some of these cards charge you as much as $ 150 a year to have the card.
Once you get the card, DON'T charge the entire available amount because that shows up on your credit account as a high balance.
These cards will also charge you a portion of your " available balance " as an initial fee. It's usually around $ 50-75.
Pay that off first.
These card issuers report your payment to all 3 credit agencies.
What I would suggest you do is charge a very small amount on the cards, pay down the fee and then if you do charge, pay it immediately the next month.
Another suggestion I have is to look at the interest they charge you each month and pay that in addition to the monthly payment. Then your interest is NOT eating away at the balance and you'll pay off the card sooner.
As for paying for credit protection, that's up to you.
If you don't then you'll save money each month.
As for myself, I check it off because of my illness which may cause my asthma ( which I never had before I became ill ) may flare up again and make me bedridden again.
2 ) Go online and ask the following companies to send you a catalog :
The Swiss Colony
The reason you do this is that even with bad credit, these companies may turn you down for credit initially but then will send you a letter asking you to make a portion of the payment and then send you the item and allow you to make a monthly payment. This gives you a credit reference and after you make regular payments, other catalog companies will start sending you catalogues and it will help boost your credit with the companies that directly report to the credit bureaus.
Not all of these companies report to the credit bureaus but 2 do :
Fingerhut and Grandpointe.
I started out with a Fingerhut account and had a low initial credit limit. Now after a year, I have a $ 350 limit.
Grandpointe gave me a small initial limit but that goes up after you make monthly payments.
After 6-9 months these companies will raise your limit and that will also be reflected on your credit report and will raise your credit score as well.
Before I did this no one would give me a credit card.
Once my payments were reflected in my credit report, banks and credit card issuers started emailing me asking me if I wanted to get a credit card.
The cards I received had low limits and high annual fees, but they are also reporting to the credit agencies.
I now have 3 credit cards with 3 banks and am about to receive a 4th.
3 ) Make sure you make ALL your payments on time. I had an illness recently and missed 2 payments to my creditors and it hurt my credit score. I've gotten caught up but the companies charge you late fees and your missed payment hurts and not just in the pocketbook.
IF you have charge offs, contact either your original creditor or the collection agency. Ask them if they will settle for less than the original amount IF you pay it off in full AND if they agree in writing to REMOVE the negative item from your credit report.
Some creditors will do this, others won't., and there's no way of telling ahead of time which ones will.
But ... some companies and collection agencies would rather be paid than wait for years for money that may never be paid. If you're insistent and tell them that the way YOU want to pay them is the only way YOU will pay off the bill, usually they will accept it.
Don't let collection agencies bully YOU into paying off in payments or other payment plans and NEVER give them your checking account information or let them make automatic payments out of your checking account because they will attempt to take the full amount owed to them. They will also frequently put the payment into the account BEFORE the date you both agreed to & I've had this overdraw my bank accounts. They don't care about keeping their word, it's all about the money with many of these unscrupulous agencies and companies.
4) Don't apply for multiple accounts all at once.
Too many inquiries will keep you from getting credit.
Every time you apply for a credit card, it shows up as an inquiry on your credit report.
And don't believe that department store cards and gas cards are easy to get if you've had no or bad credit.
GE owns the Sears and Walmart card.
Citibank owns the Union 76 and Shell card.
The Chevron card is also owned by one of the big companies.
If you have had a charge off or bad payment history, they are NOT going to give you a card. Believe me, I've tried.
Citibank has a horrible policy.
If you have ANY bad credit in your credit file and have a credit card with them, they will CANCEL your credit card with them and they will NOT give you a new card until ALL negative credit information has gone off your credit report.
I had a Shell card with them for 3 years, made all my payments on time ( which does show up in my credit report as a positive and did help me get new credit ) & when they changed to this new policy, they cancelled my Shell card and told me that I could get a new one after 9 months.
Well, frankly ... Citigroup LIES. !
Despite having a perfect credit record and re-applying twice with them they still refuse to give me a new card and in a parrot like manner, they keep citing the negative credit information on my credit report for their reason to NOT give me a new card.
5 ) I have one other suggestion.
If you do get a major credit card and the customer service department won't help you, then go on the net and find out the address and phone number of the CORPORATE parent that owes the card.
That's a site where you can find out who owns what company, their corporate address and phone number.
In many cases, I no longer deal with the customer service drones and go straight to the corporate headquarters and ask to speak to the executive offices or chairman's office.
This gets you to someone above customer service and they are far more willing to straighten out a problem with you account than customer service ever will, because customer service people work with written guidelines that they are NOT allowed to deviate from.
I've done this with both bank accounts and credit accounts and it works !
I hope these ideas will be helpful to you. It worked for me and I can listen to my music on my Ipod, hear the music through my wireless headphones, cook on my George Foreman grill, and vacuum on my Hoover vacuum, all obtained because I got credit from catalog companies.
I have also gotten credit from companies that do NOT report to the major credit agencies.
I started 2011 with 11 credit accounts. Through diligent payments I have now gotten down to having 5 accounts.
By next year at this time, ALL of my credit accounts will be paid off and I will be buying a new car and my credit will be improved through my efforts and a lot of sacrifice.
Good luck and I hope you get all the credit you need !
Mark Pugner on August 25, 2015:
Credit advice from "guy from Pittsburgh"? look at the YouTube videos to see that George Foreman grill in action, if you can spot it under piles of magazines and useless tat. Anthony is a hoarder who is currently on the verge of being evicted due to cluttred fire exits (in a one bedroom apt). Take this advice with a grain of salt....... Over French fries huh falkie?
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BCHM on October 28, 2013:
This is great information. It even taught me a thing or two. I am the owner of a credit and financial advice blog called Bill Collectors Hate Me!!! I have bookmarked this hub.
Miranda Birt from Austin, Texas on May 22, 2012:
UpgradeUSA is a new online-only company that offers laptop payment plans on brand name computers. You can view their website for more information: http://www.upgradeusa.com. The program is a great option for people with bad credit or no credit - each monthly payment is reported to all three credit bureaus. The applications are hand-reviewed and the customer service is great, too. Check it out today if you or someone you know may benefit from a credit-starter program!