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Thursday, March 09, 2006
Building credit
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If one is attempting to build good credit scores there is really only a few guidelines to go by. These are the ones I think important.

1. You might have to start off with crappy low limit credit cards like Cap1, Providian, Aspire, Orchard and others but in the end their helpfulness will be very limited indeed unless you have a very high income to go along with it.
On the other hand if you are strictly using bank issued credit cards your scores will also be higher.

2. Your zip code is also quite important. If you live in a zip where the average inhabitant is a renter who has a median income of say $20 to $30 thousand you won't get nearly as high a score as you would if you live in a zip code where the median income is maybe $150,000 and up and everyone owns their homes.

3. How you borrow money is also important. If you borrow small amounts of money from some payday loan company or even a finance company that will also hurt your score more than it will help. Borrow your money from a bank instead and your score will be much better. I used to borrow from such outfits but not any more. Payday loans are the worst. Next are the small loan companies.

4. Seems to me that financing your cars don't help much either. Last time I financed a car I made every payment on time, never late and it really didn't improve my score at all. I think that once again, where you borrow the money to finance your car makes a tremendous difference. Let the dealer finance it with one of his scummy finance companies and you won't get any good scores out of it no matter how faithfully you make your payments but get your financing from a bank and you will get some recognition for your timely payments.

5. Don't have loads of store credit cards either. You might want a Target but keep a low balance on it. Same with the other store cards. Keep a very low balance on them at all times. I have Target, Circuit City and others but I keep a very small balance on them, usually well under $100 each. I do run some "large" purchases on them from time to time but always pay them off as soon as the bill comes in. I never wait for the due date. I never make the minimum payment even if I have to go buy something just before the bill comes out. Take Target for instance. Lets say I have a balance of maybe $20 so I know that the minimum payment would entirely wipe out the remaining balance. I'll go buy a new pair of pants or something just to run the bill up to maybe double that so the card never gets totally paid off.

I had some low income times a few years back and defaulted on lots of cards and debt. I gave them all the old creditwrench treatment but at the same time I was negotiating with them trying to get them to reinstate the cards. Some would and some would'nt. Those who did got paid every dime I owed them and they reinstated the cards as per the agreements. The rest of them are still sucking hind tit, getting nothing. One of them even gave me a new card recently. (LOL) and the rest I wouldn't accept a card with even if they offered me one and they have.

The one who just gave me a new card even sued me for the old one a couple of years or so ago and naturally they lost that case badly.
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