The rule of thumb in credit repair and development is that you should "take out a small loan" and pay it back to prove you are a worthy credit risk. But people who advise you how to build your credit overlook a simple method for improving that score without borrowing a dime.
I learned this quite by accident a few years ago when a credit manager was explaining my credit report to me. She mentioned that I had a lot of high balances on my credit cards. I was making more than minimum payments on the cards and was very good about paying them off but at the time I was borrowing money for a car loan I had just used my credit cards.
What no one bothered to tell me was that the more unpaid balances you carry on your credit cards the more that counts against your credit score. I was pretty peeved that I wasn't being offered the best interest rate just because my credit card balances were kind of high. I had them all paid off within three months but that didn't matter.
After moping around for about a year I realized that I had a pretty easy way to keep my available credit pretty high. I was always getting credit card offers in the mail. I decided to sign up with a few that I knew I would never use. They each gave me a little bit of credit and suddenly my credit score improved.
Well to make a long story short I found I had to buy a few things on those cards to keep them active so I learned to apply for cards with hefty balances that I was just not interested in using. That helped keep my available credit high even when I was using my regular cards for travel.
Opening a few extra credit accounts will get you a slight boost in your credit score. You also need to buy something and pay it off quickly every few months so they report that you are a good customers.
What no one bothered to tell me was that the more unpaid balances you carry on your credit cards the more that counts against your credit score. I was pretty peeved that I wasn't being offered the best interest rate just because my credit card balances were kind of high. I had them all paid off within three months but that didn't matter.
After moping around for about a year I realized that I had a pretty easy way to keep my available credit pretty high. I was always getting credit card offers in the mail. I decided to sign up with a few that I knew I would never use. They each gave me a little bit of credit and suddenly my credit score improved.
Well to make a long story short I found I had to buy a few things on those cards to keep them active so I learned to apply for cards with hefty balances that I was just not interested in using. That helped keep my available credit high even when I was using my regular cards for travel.
Opening a few extra credit accounts will get you a slight boost in your credit score. You also need to buy something and pay it off quickly every few months so they report that you are a good customers.