Establish Credit Card Accounts
Having open credit is just as important as removing erroneous negative credit. An individual with poor credit may not qualify for a traditional credit card. No need to worry; there are still options.
Secured Credit Cards
Secured credit cards need a cash deposit in exchange for the line of credit. Once approved, the accounts take about 30 days to post to your credit report. After it shows up on your report, it may take 2 to 3 months to register with FICO for your scores. We have several options for you to choose from. (You can also speak with us in person to discuss your options.)
Whenever you add a new account to your credit report, the account needs time to age and to add points to your scores. Generally, 4-6 months of on-time payments is the length of time needed to mature sufficiently to gain positive results.
Add an Authorized User Acct
Ask a friend/relative/business partner to add you to a good credit card as an authorized user. This puts their good credit history on your credit report, giving you their years of good history. This is an overnight win for your credit score. (Usually takes 30 days to get on the report.) Even though it helps your score, lenders know that this is not your account and have no benefit for approval.
Installment loans are fixed monthly payment loans. These accounts are not
good for establishing credit. When you open an installment loan, FICO does not have enough data to assess your ability to repay. This puts you in a “high risk” category and lowers your scores–a warning to lenders. Once you have made 6 to 7 months of good payments, your scores will usually recover. Then after 8 to 9 months of good payments the account will usually have positive affects on your scores.