Should I get a credit card if my credit is bad?
Question: Hi all, thanks for reading my post. I have bad credit and I want to start paying it all off. It’s not very much but it’s a lot of different misc. bills and fees. I want to use a credit card (if they would accept me as a customer) to pay off the fees then pay my monthly fees on the credit card.
Maybe I’m completely wrong in doing this but my thinking is that if I pay it all off I only have to worry about I bill a month. I can afford to pay all my bills (I’m not in debt), I just get overwhelmed sometimes with all the different bills lying around.
I’m also considering this option because I figure if I’m going to pay off all my bills I want my record to start reflecting a good, reliable steady payment on my part as opposed to just paying off my bills with a check. And from what I understand credit card APR % isn’t a big issue if I pay off my monthly fee in full, correct?
Please advise me. I’m open to any criticism, opinions and options (as long as it’s constructive and not meant to put anyone down).
Thank you in advance. I appreciate it greatly.
Answer: Using a credit card to improve your credit rating is actually smart, if you can control your spending habits. Here’s some additional information:
Credit Score Increase Strategies
The following are ideas for increasing your Credit Scores on your credit report. The credit report is one of the most powerful tools for getting the best interest rates, and loan programs. These are time tested strategies to increase your scores. The actual amount of increase will vary from person to person, but you will see the results.
1. Make all the monthly payments for all debts on time, especially mortgage and auto loans. If you have to go over in time, make sure you pay them for sure by the 29th day of the month (at 30 days overdue, they report a “late pay” to your credit automatically)
2. Pay at least the minimum payment required.
3. If you have to go over in time, make sure you call the creditor after 15 days and let them know what the situation is.
4. If you are really strapped for cash, ask the creditor to forgive this month’s payment and put it on the end of the loan. This works well with set periods of borrowing i.e. auto loans, home loans, and other set term loans.
5. Consolidate credit cards when possible to get the lowest interest rates.
6. With credit cards, do not charge over 50% of the credit limit they give you. i.e. if you have a $5,000 limit, do not charge more than $2,500 ever. When you go over the 50% mark it brings down your score.
7. With credit cards and other revolving credit accounts, the best method is to pay off the balances every month. Your scores go way up when you do this.
8. Want to see a fast increase to your credit scores? Try this strategy: get 2 new credit cards (or ones that aren’t at 50%) with low credit limits (i.e. $300 or $600). Remember don’t charge more than 50% even on the new ones. Take credit card #1 and charge your gas, groceries, misc stuff for one month. When the bill comes in pay it off completely. Month 2 charge stuff (no more than 50% of limit) on credit card #2. When the bill comes in pay it off completely. Do this see-saw for about 6 months, and then pull your credit report again, and compare the results it works.
9. Special note: the computers that process credit scores don’t know the difference between a $100 credit balance being paid off, and a $100,000 credit balance being paid off. Each time you pay one offyour credit scores go up.
10. Sometime compare your monthly Income/Revenue coming in, to the $$ amount of debt you owe (minus your home). You want to target no more than 45% credit rating in order to qualify for different loan packages.
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Filed under: Bad Credit Loan
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