Originally posted by SELF-MASTERY
I think its a rip off and wont do much to increase your score. FICA looks at lenght of credit history, payment history, utilization, and credit limits.
Who says it won't do much to increase your score?
This card is prepaid and doesn't have any of the elements from above...
It has EXACTLY the same elements as a normal credit card. The fact that it is prepaid won't change the length of time you have it, payment history, or anything else. It works the same as a normal card except for the fact that you need a deposit as collateral.
Would I apply for it? I have no need to. I already have credit card limits well in excess of six figures at my disposal. This is designed for building or rebuilding credit only.
Use only 20 percent of ur available balance every month (utilization),
Incorrect. I am not sure of the exact figure but it is at least 40% and I have heard you are safe up to 60%.
Maxing your limits will TANK your score until they are paid down, but when you are using the money productively you have to weigh out the benefits of having access to the money versus having a higher score.
If you are a serious investor and a deal comes up that can double your money in a couple of months (lets say ($15,000) but your credit score will drop 40 points because you have to borrow on your credit card to close it and it costs you an extra couple hundred in fees to get the loan BECAUSE your score dropped, are you going to pass up the deal? I think not.
dont miss payments, and NEVER close an open acount. Work on building as many positive tradelines as possible.
True
Revolving debt is the most important type. All that BS real estate advice that says apply for signature loans back w/ own money is OLD SKOOL ****. Installment debt will not give you the long term boost that you will need to maintain a high credit score. Once you pay off the loan, ur creditor stops reporting, NOT GOOD.
You are WAY, WAY off base on this one.
Installment debt can even HOLD UP your credit score. I paid off a mortgage last year and my score dropped about 60 points overnight. I went back in and paid down some of my credit card balances to get them below 50% and my score went right back up. Credit scores FAVOR installment debt (I had about $700,000 worth of real estate loans show up on my credit report almost at the same time recently and my score didn't change at all). Wise use of revolving debt also helps your score, but installment debt in most cases is better for your score.
And I'm not sure where you are getting that applying for signature loans is "old skool ****" but ANYTHING you can do to get the ball rolling with credit will usually pay for itself in the long run (if you use it WISELY).
