Quote:
Originally posted by garett
[B]After paying her off her debts 100% (#1 priority) she should get a secured credit card (a card where you pay a security deposit, which sits in an interest bearing account until you cancel your card with the balance paid in full). Then she should just start using it for all her normal expenses... groceries, bills, rent/mortgage etc.
With all the shit you spend monthly she could be putting $1k - $2k on the credit card each month and paying it off in full without incurring any interest .. and thus building positive credit VERY fast.
After a year or two she can start applying for real credit cards. As soon as she's approved for one she can cancel the secured card and get her deposit back, plus interest. Then it's just a matter of repeat. The more you borrow and pay back on time, the more you build credit.
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This is what I did and it has worked very well! It does take time, but you build real credit. I started with an unsecured credit card (one of the sleazy ones where you get a $250 credit limit, but almost all of that credit line is eaten by the startup fees.) I built that up to a $1,000 limit by always carrying a balance, but having that balance be less than half of my limit, and always paying more than the minimum payment.
Next came a gas card (same deal, stay below 50% limit and overpay) and then a regular credit card.
At this point I got turned down for not having any major installment accounts (mortgaga, car loans, etc) so I took out a small personal loan from local company, and paid it off in just a few months. Then I took a larger loan and have been overpaying that. This personal loan shows up as an installment loan, so to credit companies it looks the same as making a car payment.
I've got the credit I need now with the only limit being the short length of time I have had the accounts.. In another 6 months to a year I will have a longer payment history and should be all set.