Paid my 3 delinquent bills that were charged off on my credit report...what now??
The key to financial power lies in your credit rating. If you plan to get a home loan, save money and get better credit starting now!
a) you will establish credit history by making regular on-time payments
b) you will get your deposit back, plus interest, at the end of a set period(usually around 12months) if you pay consistently on time
But don't just stop there! You need to build up serious credit, so I'd also recommend getting a store card. Crown Jewelers is a jewelry store website that gives their store card to ANYONE who makes a jewelry purchase via their website. Buy a cheaper piece of jewelry so that you can get the card, pay off the jewelry at the end of the month, and then keep the card open with a $0 balance!
I'd also recommend getting a student loan if you are in college, or a Bally's membership contract if you are athletic and/or looking to get in shape. Why Bally's?...Bally's reports their memership contracts as an "installment loan" on your credit report. They report the monthly membership fee as your "monthly payment" and there is no interest on a membership. So it's a great way to build your muscles AND your credit at the same time.
Just be sure to keep your credit card statement balances low, at about 30% of your credit limit or lower. Shoot for 10% of your credit limit...that's the optimum. Also, avoid applying for new credit unless absolutely necessary or if you have a good shot at getting approved(most credit unions do NOT pull your credit in order to approve you for a secured loan/credit card! yippee!). If you do get a secured loan or a Bally's "loan," I wouldn't recommend paying it all off at once...I'd recommend paying the standard minimum payments for the full term of the loan, to show as long of a credit history on this single piece of credit as possible. Since your credit got trashed before, it's now very important to make a loooooong pattern of on-time payments.
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