How I'm doing it
Basically I just want to share with others what I did so they can know that if I can do it anyone can. I’m not offering any legal or financial advice. I want to share all my insights and the pitfalls that I went through so other others may avoid them. Read my CYA legal blanket disclaimer.
Well, to start with I did a lot of research, watched a lot of YouTube and TikTok videos and read a lot of comments. So maybe my sources are faulted, I don’t know. But I wanted you to know where I got my information. The comments were probably most helpful cause they were from everyone who had tried and failed because of one thing or another came to warn, bitch and grieve.
There are multiple steps to this but it is definitely a repeatable process. The first things I did was clean up my bad credit and begin re-establishing new at the same time. I found cleaning up my credit takes time, and there was no reason not to begin the process.
The first I did was to get a copy of all three of my credit reports. I went to free creditreports.com. You’re allowed one free report from all three agencies per year.
After the fact people told me not to do this because you only get one and you want to use it to verify your status and in hindsight, I kind of agree.
The next thing I did was create accounts on all three major credit reporting websites. In hindsight, I learned that you shouldn’t create an account with Trans Union and Experian and Equifax because they make you wave your right to arbitration or class action lawsuit. Anyway, I did it and got reports for the better part of the year before I finally had the sense to cancel. ( it turned out these reports were actually being reported to my credit report as inquiries every month. They had no negative effect, but still… anyway once I created all the accounts, I could see all the information that’s on the report on the websites anyway. So I really didn’t need to run the report in the first place.
The steps I learned from watching all the videos were to:
- I removed all all old phone numbers and addresses except the current one and accounts I have active credit associated with now. I’ve moved around a lot and lived all over the country so I kept an old address with long residence to show stability for creditors to use. They send out confirmation emails so I waited for all the emails and logged in to doublecheck a couple times before they were all cleared up.
- Then I logged in and contested each of the entries on my credit report based on incorrect information in the reporting. I learned there are about 1 million reasons for the information to be incorrect, from dates to the owner of the credit I agreed to pay. Anyway, They send out confirmation emails. So I waited for the confirmation emails and I checked online a couple times to see if anybody was reporting against me. It turns out a couple people did Because of medical stuff that T he VA was supposed to pay for, but Dr. didn’t fill out the paperwork correctly. I contested them.
- This would’ve been the time to run that one time credit report.
So here’s some things that I learned about my credit rating and how it’s evaluated.
- Oldest credit reference. So it is important not to delete your oldest credit reference whether it’s a credit card or a bad car loan or whatever because it determines the length of your credit history and that takes up a percent of your evaluating score.
- Delinquent accounts. Late payments charge offs as well as good payment history on time payments are all recorded and count towards your credit score.
- Types of credit. You need long-term credit like a home loan or a car loan that is paid off to maximize your credit rating. Credit cards, airline, credit cards, gas cards, retail, store cards, Home Depot, Lowe’s, Harbor freight to name a few.
- Debt to credit ratio. The more you use your credit and raise your balance towards your limit, the more of a risk you become to the credit provider. It is important to keep your balances as low as possible while still using your credit. Establishing a new line of credit and using it as your primary while paying off other balances has worked best for me so far.
- But first things first, if you don’t have a bank checking and savings accounts open one of each immediately. New accounts are flagged by credit reporting agencies so you want to get the accounts opened as early as possible to show some longevity. Before learning everything that I have, I made the mistake of closing all my old, checking savings and credit card account accounts years ago. It’s all about establishing yourself as being stable, credible, reliable and able to repay debt.
Next or simultaneously is to establish or re-establish some credit. Depending on how bad your credit is will depend on what lengths you will have to go through to do this.
It is going to cost you real money overtime to establish good credit.
Bank accounts have minimum balances and charge banking and service fees for accounts under the minimum. Credit cards have interest rates. The higher, the risk the higher, the interest rate
It’s gonna cost you.
Fees, fees, fees. They charge for everything and when you first starting out and you don’t have anything and it hurts. When you need a break the most is when they take the most. But overtime these fees go away and interest rates come down and the value of your money compounds and suddenly all those fees become dividends.
Hard inquiries or request from credit vendors for a copy of your credit report add up and can count against you so you don’t wanna runoff all willy-nilly applying for credit. The hierarchy from easiest to hardest from what I’ve learned is:
secured line of credit.
Retail credit cards.
Visa
Master card
American Express
Credit is like a muscle and must be exercised to grow. But like a muscle, if overworked it can break down. I found it best from what I’ve learned that the best way to mass credit muscle is to use it sparingly.
This is what I downloaded from Capital One webpage