How many credit cards to rebuild credit?

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sam79
 
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How many credit cards to rebuild credit?

Postby sam79 » Sun Jun 26, 2011 4:14 pm

My husband and I were have gone through a rough patch due to the economy but he recently got a new job and this week I was hired part time. The money isn't great both of us were out of work and this will make a world of difference. We want to begin rebuilding our credit scores ASAP and were going to try with secured cards any maybe store credit cards if we can qualify.

Question is how many credit cards should we start with to rebuild credit? Would 1 for each of us be good or is more the better?


Clear
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Postby Clear » Sun Jun 26, 2011 4:48 pm

I say start off with one each.
You don't want to overwhelm yourself with credit card bills.
Just remember to pay it all off when the bill comes and that you have self-control on what to spend it on.
For example, the credit card is only use for food and gas, nothing else.

Dulcinea
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Postby Dulcinea » Wed Jul 13, 2011 4:23 pm

If you read elsewhere on this forum, you will see that store credit cards are not necessarily good for your credit score if you already have good credit. The story may be different for someone who is trying to rebuild credit, though.

I would suggest that the first thing you should do is get your hands on a free copy of your credit reports from each of the three credit agencies: TransUnion, Experian, and Equifax. You can read about how to do this at the Federal Trade Commission website along with some other useful information. When YOU check your credit report it does NOT lower your credit score no matter what you hear elsewhere. By the Fair Credit Reporting Act you are entitled to a free credit report from each of the agencies every year (so three reports per year total, one from each). This will NOT contain your credit score but it is the information used to generate it. In order to get your credit score you will have to pay one of the three agencies. Because you are trying to rebuild your credit it may be a good idea to know where you're starting from. You can estimate your score here: http://www.myfico.com/ficocreditscoreestimator/ or get an actual score from http://www.myfico.com, too. You will have to pay for that. Each credit agency has a different score for you but I suspect that a single one will be enough for you right now. You can ask the wiser credit wizards on this forum about that if you are unsure.

Second, I would suggest you each get a secured credit card. Set up automatic bill payments from your bank so that the minimum amount due (read the fine print that comes with your card to determine this) is always paid on time. Given that you have had problems with credit in the past, it's probably better to pay off the total each month, but go ahead and leave that minimum payment as an automatic.

After six months you should be able to ask the credit card issuer to exchange your secured cards for 'regular' credit cards. Be very careful to always pay at least the minimum, preferably more, by the due date. You should read this forum to see what the best secured cards are to apply for. Do NOT apply for additional credit after getting these cards and before getting your "real" credit cards. When someone other than you pulls your credit report it subtracts a few points from your credit score. Not a large amount, but it can add up and since you are trying to restore your credit you don't want this to happen until you are doing better.

In about a year or so, check your credit score. Continue to get your credit report free every year from each of the credit agencies. If you find errors, make sure to correct them. I should have mentioned that earlier, too. If you find errors in your credit report when you first pull them, make sure to correct them. There's no sense in letting things that you didn't do negatively impact your credit score.

good luck and stick with it!



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