Author Topic: Rebuilding your credit with a credit card?  (Read 368 times)

Redstone5

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Rebuilding your credit with a credit card?
« on: June 05, 2019, 03:27:11 PM »
I filed a consumer proposal several years ago that has now been discharged, but I'm not sure how to go about rebuilding my credit (long story, my ex ruined my credit and most of the unpaid bills were in my name).

I've since been doing the usual (paying my cell phone bill on time, and I now have two new utility bills in my name which I pay promptly as well), but people keep telling me I should get a new credit card to rebuilt my credit. I had to cut up my old credit cards as part of the proposal, and I'm not thrilled with the idea of having a credit card again. But it would be nice to have the option of booking a hotel room or car rental without having to give cash upfront.

I did apply for a credit card through a local bank recently and was declined. Should I go ahead and get one of those secured credit cards through Capital One? A pre-paid credit card? Or just stay credit card free for ever?

G-dog

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Re: Rebuilding your credit with a credit card?
« Reply #1 on: June 05, 2019, 03:57:50 PM »
You need some kind of loan or credit card to rebuild and improve your credit score.

If you are still working, a small loan through your bank (where your check is deposited) can be a start.  You can even tell your bank you want to rebuild credit.  In this option I would take the loan and set up automated payments

I am not sure how secured credit cards impact credit scores, but a secured card through your bank is another option. Or CapitalOne. Itís worth checking around for the best interest rates and terms.

I suspect (but donít know) that pre-paid cards donít help rebuild your credit.  That needs to be verified.

It will take a few months to rebuild your credit, but it is important in todayís world (job hunting, travel, etc.).

Telecaster

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Re: Rebuilding your credit with a credit card?
« Reply #2 on: June 05, 2019, 04:35:00 PM »
I did apply for a credit card through a local bank recently and was declined. Should I go ahead and get one of those secured credit cards through Capital One? A pre-paid credit card? Or just stay credit card free for ever?

Building a good credit history is important.  A secured card is a good plan.   You might want to consider getting a secured loan from your bank.   Make up a reason that sounds plausible and then pay it off.  It will cost you a few bucks in interest but it will be a big boost to your credit score. 


GreenEggs

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Re: Rebuilding your credit with a credit card?
« Reply #3 on: June 05, 2019, 08:55:27 PM »
What's it called when somebody with good credit signs someone with poor credit onto their credit card to boost their credit score?  There are threads in this forum about people doing it for a fee.  I don't know how much it helps build credit, but it obviously works or nobody would do it.


That might be an option worth looking into.

secondcor521

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Re: Rebuilding your credit with a credit card?
« Reply #4 on: June 05, 2019, 09:59:16 PM »
What's it called when somebody with good credit signs someone with poor credit onto their credit card to boost their credit score?  There are threads in this forum about people doing it for a fee.  I don't know how much it helps build credit, but it obviously works or nobody would do it.


That might be an option worth looking into.

Colloquially it's called piggybacking.  The thread here on the forum is about doing it in the US.  OP is in Canada which probably has a somewhat different credit system; I don't know if it works there.

expatartist

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Re: Rebuilding your credit with a credit card?
« Reply #5 on: June 05, 2019, 10:15:44 PM »
Starting with a secured credit card worked for me. I had no credit after 10+ years living outside the US, so was mostly starting from zero. Charged small amounts regularly, set it to autopay from my savings account. After half a year the bank offered me a 'real' credit card then upgraded to a Platinum. If I'd wanted to do it faster I would've taken out a small loan as well.

Redstone5

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Re: Rebuilding your credit with a credit card?
« Reply #6 on: June 06, 2019, 10:40:14 AM »
Thanks, Everyone! I'll look into these options. I think the secured credit card might be the best bet for me right now.