     Robert Bielak | Wednesday, December 01, 1999 - 06:41 am 
Any trade line in good standing (paid as agreed/never late) is going to help your credit risk scores. However, you're going to need more than six months worth of good trade lines to do anything. And you're going to need more than two or three to offset if you happen to have a bunch of negative, accurate trade lines or collections on your reports.
Potential lenders want to see a good mix of installment loans (your bank loans) and revolving accounts (credit cards) being paid regularly and on time. The installment loans being paid on time prove that you can handle a fixed debt over a period of time - this is good. Revolving accounts show that, not only do you pay your bills on time, but you are a responsible spender and do run out and max out your cards when you have a variable amount of credit available. It shows that you're responsible enough to both PAY the bill every month, as well as being responsible enough to not get yourself into too much debt when, potentially, you COULD do that.
Secured credit cards are good, too, provided that you know that they are reported as normal credit cards. If you can get an unsecured card, that's better, but watch for all the hidden fees and 'gotcha' fees BEFORE you apply. Regardless, NEVER spend the majority of your credit limit (no more than 50% should be a rule) and ALWAYS pay on time.
Time and/or persistance on your part to work on getting items removed beforehand) are the only things that will improve your credit reports. And, of course, continuing to pay your existing debts on time. |
