With the recent recession, credit crunch, real estate bust and sky high medical bills, many people are searching for ways to quickly boost their credit score. That makes sense because a higher credit score can get you lower interest rates which could save you thousands of dollars per year.
To help boost your credit score in a matter of months, you can do the simple credit card strategy – even if you have a bankruptcy or foreclosure!
Simply secure the following type of credit cards: merchandise card, sub-prime VISA or Mastercard and a secured VISA or Mastercard. Then verify the card company reports to all three major credit bureus – Equifax, Experian and TransUnion. Then be certain to use them, to make your payments on time and to keep the balances at 35% of the credit limit or less. That’s it!
Before I tell you exactly what these specialty credit cards are, I have to warn you that they won’t be cheap. But, remember, your purpose is to increase your credit score so you can qualify for the good credit cards, auto loans and more. So forget about the costs for now. Focus on increasing your credit score. (One critical caveat, don’t get even one of these cards if you can’t afford the new payment(s).)
The specialty credit cards are:
Merchandise Card – these credit cards used to be catalog cards because you can only use the credit card when buying from their catalog. They’re easy to get. I have never heard of anyone getting denied. They usually have a large initial credit limit, which helps ratchet up your credit score and makes it easier to keep the balance below 35% of the balance.
The downside is they have an upfront fee, the rates are high and you can find the product cheaper somewhere else. But your purpose is boosting your credit score, right? You will enjoy the lower costs when you have a great credit score.
Sub-Prime VISA or Mastercard – These are unsecured credit cards just like the good credit, credit cards. However, they come with an annual fee and a monthly maintenance fee. The annual fee is typically subtracted immediately from your credit limit and the monthly maintenance fee is usually billed monthly. For example, if you’re approved for $500, you will have $375 available credit after the initial annual fee is subtracted and you can expect to pay about $10 per month for the maintenance fee.
Secured VISA or Mastercard – like the Merchant Card, this card is virtually guaranteed because you’re using your own cash as security to get credit. For example, if you want a $500 credit limit, just deposit $500 with the card company upon approval and, voila!, you have a $500 credit limit using your cash as collateral.
In conclusion, if you get one of each of the specialty cards above and manage them well, your credit score should greatly increase in a few months. After about six months, you may get approved for an unsecured credit card with your “slightly blemished” credit with credit limits up to $2,000 or more.
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