Credit Building Strategies: Build Some Credibility

By:Jay Delgado

One of the most common misconceptions there is about rebuilding credit is that you have to go back and pay everyone you owe money to every single dime that you owe them. This simply is not true. In fact, if your debts are more than four years old, you do not want to pay them off. Why? New negative credit files carry more weight on your credit report than old ones. This means that your time and money is best spent on building credibility and new positive credit files than it is on cleaning up ancient history.

Past due notices and accounts recently placed in collection do the most damage to your credit score. If you are just starting out or trying to rebuild your credit after a financial blow, it is extremely important to pay attention to how you are managing your current bills.

Here are a few tips:
* Open a savings account and a checking account.
Make regular deposits in each and follow your budget closely. Do not bounce your accounts and take great care to keep a close eye on what is going on in each account at all times. Keep in mind that your savings account should always increase in value, never decrease.

* Pay all bills on time. Every bill, no matter how small, can end up on your credit report if you do not pay it. Pay everything on time including bills for magazine subscriptions, mail order merchandise, doctor visits, utilities and insurance.

* Piggyback credit. Ask your parents or an older relative if they will allow you to be a card holder on one of their credit card accounts. You do not have to use the card. They do not even have to let you carry the actual credit card. By being on their account, their credit account information shows up on your credit report. If they pay the account on time, it is a positive boost to your credit standing.

Building credibility is all about establishing a good name for yourself. Pay your rent on time and strive to be an excellent tenant and employee. The more that you do and do well, the better off you will be financially.

Do not worry if you have made mistakes in the past that have affected your credit. Negative credit history can only stay on your report for seven years. After four years, creditors lose the ability to file a suit against you in most states.

This does not mean that you should completely ignore your past debts. There are certain circumstances where it pays to pay off or settle your old debts. But you should strive to build your credibility and to honor current bills and debts first. Never pay off an old bill with money that you need to pay a bill that is due today. Doing so will result in a new negative file being added to your credit report which will only add time to your bad credit sentence.

Digg del.icio.us Blink Stumble Spurl Reddit Netscape Furl

Article keywords: Credit restoration, credit repair, building credit, credibility, piggy back credit

Article Source: http://www.articles2k.com

J Delgado is an expert in helping individuals restore there credit. To find out more about having foreclosures, bankruptcies, late payments and other derogatory items removed from your credit report contact him at creditexpert@scrupyourcredit.com or at: http://www.scrupyourcredit.com

Top Credit Articles
1). What Is a Good Credit Score – How Can I Raise Mine? By : Peter Crump What is a good credit score? When you request a free copy of your credit report, you will find a score assigned to your credit history. This score will determine whether or not creditors will grant you the loan or credit that you want because it gives them an idea of your risk to repay. Generally, the answer to the question “what is a good credit score?” is the higher the better.
2). Paying Off Your Credit Card Balances: Running The Numbers By : Stephen L. Nelson, CPA Ever thought about paying off your credit card balances? Maybe you would like to be debt free just to reduce your stress. Or perhaps you need to be debt free to retire. If you have Microsoft Excel running on your computer at home or work, you can use Excel’s NPER function to calculate how quickly you can pay off a debt such as a credit card balance.
3). Credit Card Faq - Credit Card Security And Authentication By : Joseph Kenny With the ever rising reports of credit card fraud, fraudulent use, internet phishing and identity theft, people are rightly concerned about credit card security. Fraudulent credit card use can be an annoyance at best, and seriously damage your credit at worst. It's only reasonable that people have questions about credit card security and authentication methods.
4). Online Credit Card Application: The Easiest Way To A Customer’s Heart By : David Riewe Many credit cards are offered in the market today thus, making companies more aggressive in advertising and marketing their card services. These companies (e.g. banks, department stores, specialty stores, airlines, hotels, etc.) have found a powerful tool in catching the attention of prospective card holders: online credit card application. What advantage/s does online credit card application offer? The bottom line of online credit card application is “convenience”.
5). How To Build Up Your Credit By : Ken Snow There are many effective ways to build credit. In order to keep creditors from bothering you, and in order for you to get a loan with a reasonable interest rate, you need to learn how to build your credit. The best place to start is to not buy things that you don’t need. If you always make impulse buys, you will find yourself in deeper debt very quickly.
6). Best Rewards Credit Cards By : Richie Chapin It's almost a guarantee when you check your mailbox you will have a couple pieces of mail offering you a pre-approved credit card. Now most people will casually discard them without any regard to the offer that is inside. But before you throw away that credit card offer you may want to take a peek at it. Many credit card companies are now offering you FREE rewards just for using your credit card.
7). How to Choose the Right Credit Card For You By : Richie Chapin So your thinking about getting a credit card but your not exactly sure what to look for right? Well there are a lot of different things to consider when applying for a credit card. Some things to think about are the interest rate, annual fees and features the credit card may offer. Here are a few tips that will help you choose the best credit card for you.
8). Instant Credit Approval - Avoiding Fees By : Robert Alan This article describes how to avoid paying fees on instant credit approval
9). Credit Bureaus Adopt New Credit Scoring System By : Rick Hendershot The three major consumer credit bureaus in the U.S. have recently created a new credit scoring system that will give financial institutions a more consistent evaluation of the credit worthiness of applicants. The three agencies -- Equifax, Experian and Transunion -- have introduced the new system called "VantageScore". The new scoring system will be used immediately for reporting to banks, lenders, and credit card companies, and will be available to consumers later in the year.
10). The Travails Of The Pros And Cons Of A Small Business Credit Card By : Sohel Katir For small business credit card getting a sense out of a deal is, in some instances, the most difficult thing to do. This is because most people could not instantly figure out the benefits they can derive from obtaining it. Take for example the case of small business credit card. Some people contend that business credit cards are crucial in the growth of a business, while other s contend that it is just one way of losing their investments.

New Credit Articles
1). Free Credit Reports, Where You Can Get Yours Today and Keep a Blazing Eye on Your Credit! By : Tom Jerico Everyone can get a free credit report. It is one of the most important things anyone can do to keep their credit in shape.
2). What You Need To Know About Legal Credit Repair Service By : Paul Johnson Legal credit repair service is a lucrative industry that is heavily based on making claims that suggest that they will be able to repair your credit without a hassle.
3). Chase Free Cash Rewards Visa Credit Card - Pros and Cons By : George Allen The Chase Free Cash RewardsSM Visa® Card, issued by Chase, is designed for those with very good credit who would like a card that offers a cash back reward program.
4). When Considering Credit Card Benefits, Are Reward Cards Really A Bargain? By : Gregg Hall Now credit card companies are using reward systems to get people to sign up for their card. For the consumer this is great. You can now get rewarded just for using your credit card that you were going to use anyway.
5). Can Your Repair Credit Yourself? By : Paul Johnson Many companies that want to make a good deal of money exchanging your credit information will advise you against repairing your own credit.
6). Get Your Free Credit Repair Help By : Paul Johnson At first glance, free credit repair help may seem too good to be true.
7). Newbie Credit Repair Advice By : Paul Johnson You have credit rights and they are likely being violated.
8). How your Credit Rating Affects your Credit Card Application By : Jon Francis When you apply for a credit card, one of the factors that come most into play in whether or not you are approved is your credit rating.
9). Credit Repair - Where to Start? By : Paul Johnson Getting started in your path to credit repair can be mind-numbing. Read on to take that numb right out of your mind and get your credit repair process started.
10). Paying The Price Of Credit Card Jumping By : Joseph Kenny Having a debt and paying no interest on it seems almost too good to be true. But many consumers use their credit cards to do just that. The process is known as rate surfing or credit card jumping.