Re: Low FICO Score but no Debt - Where Can I Build My Credit?
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Posted by LadynRed
(199.91.33.254) on November 18, 2003 at 18:01:04:
In Reply to: Low FICO Score but no Debt - Where Can I Build My Credit? posted by HP2025 on November 18, 2003 at 17:27:58:
A score that low and NO DEBTs ?? Wow..
Unfortunately, FICO is based on a lot of things, a couple of which are: length of credit history,
number of open revolving accounts in good standing
number of BANK LOANs you've had.. in good standing
ratio of debt to income
ratio of available credit to credit already used. Sooo.. probably one of the best strategies, if you can handle it, is to take out a small secured loan, for a short term and pay it back EARLY. Say a 1 year term and pay it off in 6 months. Obviously make sure you make all payments on time. Take the loan $$$ and put it in a savings account, one that accrues interest if you can find one. Do NOT spend it.. let it sit. Then give it all back to the lender after 6 months and you've really lost nothing. It doesn't have to be large, you just need some good history to show up. Credit unions may be beneficial for this sort of thing, just be VERY careful of their terms as far as collateral or cross-collateralization. Cross collateralization can be a nasty trap and they MUST CLEARLY state the terms if they use this method. There are other strategies. A secured card, one that does not report as secured, is also a good idea. Make small charges and pay it off in full every single time.
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