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When I was growing up, I learned the importance of having good credit. Good credit gives you more flexibility in life and it can add up to savings thousands of dollars (if not more!!) over a person’s lifetime.
I’ve been fiercely protective of my credit, and have been done everything I can to protect it. The bad thing about credit is that a few honest mistakes can haunt you for years.
I accidentally forgot to set up a card on autopay, and that can was closed by the credit card issuer due to non-payment. This brought my credit score down by ~100 points, and it took a couple years to fully recover. But it did recover!
If you’re new to credit or are rebuilding your credit, here are the First Best Credit Cards.
Keep in mind that this information is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.
Here are 4 Lazy Ways to Improve Your Credit
1. Have a Friend with Good Credit? Ask Them to Add You as an Authorized User.
If you have a trusted friend who has good credit, ask them to add you as an authorized user to one of their credit card accounts. Tell them that you’ll give them the credit card to hold onto so no charges are made.
If you’re a parent, consider adding your child to as an authorized user. As an example, American Express won’t let you add until a child under 13 years old. Team member Jasmin’s daughter really wants an AMEX card, and her mom will be adding her as an authorized user when she turns 13. It should eventually be a good boost to her credit score because she believes AMEX will backdate her credit history on that line to the date she first opened a credit card with AMEX.
2. Open a Secured Credit Card
If you have no credit history, are rebuilding your credit, or have a credit score below 650 according to many reports in online forums, the Capital One Secured Mastercard could be a smart first step to take in improving your credit score.
This is a good option if you’re new to the US, a recent graduate, or student with little previous credit history, or if you have blemishes on your credit report.
Debts fall off your credit report in 7 years, so if you went through a period of financial lessons-learned, don’t fret. Just wait for them to fall off your report and then you can make a fresh start. Even though debts don’t go away after seven years, having them fall off your credit report can be beneficial to your credit score. Just remember, you need to pay all your new bills on time.
4. Don’t File for Bankruptcy
Motley Fool message board author CPAScott, whose post on the Motley Fool forum received 240 recommendations, said “Bankruptcy will negatively affect your credit for a minimum of 10 years. The mistakes that showed up on your credit report disappear from that credit report after seven years. On the other hand, credit applications might ask whether you have EVER filed for bankruptcy. Also, not all financial obligations are removed in bankruptcy filings. Common debts like student loans, income taxes, and back child support are the most significant items that will not be removed with a bankruptcy filing.”
- Get a friend with good credit to add you as an authorized user to her or his credit card
- Open a secured credit card such as the Capital One Secured
- Pay all your bills on time and wait for old blemishes to drop off your credit report
- Do NOT file for bankruptcy