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Whats the best way to repair a credit rating?

Good net worth; no credit. Where do I start?

  • I have been investing in stocks and savings bonds since I was a child. I have no credit, but a large net worth ($300k in investments with quarterly income from dividends). Whats the fastest, cheapest way to build my credit? I'm not interested in wasting my cash on building rating - the reason I have no credit is because I hate fees. I pay cash because I make sure I always have enough money around; I don't intend to start throwing away money now. Is there a free way to build credit? I considered getting a large loan that I don't actually need and paying it back. I had a gas card when I was younger, but it doesn't show up in my credit reports. In fact, the only thing on there is the Target retail card I applied for a week ago (and was denied due to having no credit rating). Is there something that someone like me with a large net worth and a very long and stable banking history (same savings and checking accounts with <$20k for 10+ years) can do to build credit besides starting from the absolute ground up with a secure credit card? I've stayed away from credit because it's a waste of money for me to shell out on fees and interest if I can afford whatever I need up front. I have always preferred to put my money in a solid investment where the interest works FOR me instead of AGAINST me. Now I'm wondering if I'm just hurting myself by saving (and creating) my wealth in this way. Thank you!

  • Answer:

    Why are you so concerned with getting credit if you're so good at making money? It's takes at least 36 months for you to build a sufficient credit history (whomever said 6 months, doesn't know what they are talking about) and there is a difference between revolving credit and installment credit. Basically, what you're saying is. "I want to pay nothing to get good credit" Unfortunately, there are NO free rides. Since you're so savy with investments, you'd know that there are fees for investing and lets not forget the taxes on those yearly dividends. There are ways to get around the fees my friend. For example, buying a small house (as an investment), could get you a first time home buyers tax credit and allow you to write off the interest that you pay plus build equity and build credit. In my opinion, installment credit is stronger than revolving credit. Hope this helps,

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Why are you so concerned with getting credit if you're so good at making money? It's takes at least 36 months for you to build a sufficient credit history (whomever said 6 months, doesn't know what they are talking about) and there is a difference between revolving credit and installment credit. Basically, what you're saying is. "I want to pay nothing to get good credit" Unfortunately, there are NO free rides. Since you're so savy with investments, you'd know that there are fees for investing and lets not forget the taxes on those yearly dividends. There are ways to get around the fees my friend. For example, buying a small house (as an investment), could get you a first time home buyers tax credit and allow you to write off the interest that you pay plus build equity and build credit. In my opinion, installment credit is stronger than revolving credit. Hope this helps,

Starr_02

get a secured credit card through your bank ( you have to pay a deposit, amount depends on your credit line) and use it.. make payment on time and after 6 months, get an unsecured credit card. start from there, if you use it and pay on time, you will build your credit!

Sarah

First off, there is no "fastest" way to build credit. Credit is built through YEARS of responsible credit usage. Also, are argument for why you never had credit before is fatally flawed. There are no fees or interest for having a credit card and paying off the balance each month. Your ignorance of that basic fact is now your biggest enemy. By thinking you were not wasting money, you managed to waste time....not a smart offset.

Ryan M

First off, there is no "fastest" way to build credit. Credit is built through YEARS of responsible credit usage. Also, are argument for why you never had credit before is fatally flawed. There are no fees or interest for having a credit card and paying off the balance each month. Your ignorance of that basic fact is now your biggest enemy. By thinking you were not wasting money, you managed to waste time....not a smart offset.

Ryan M

get a secured credit card through your bank ( you have to pay a deposit, amount depends on your credit line) and use it.. make payment on time and after 6 months, get an unsecured credit card. start from there, if you use it and pay on time, you will build your credit!

Sarah

forget all the suggestions of secured card people with no concept of money get those and the fees are for suckers. Banks love people like you because you have something they want which is money. I would just go my branch speak with the manager tell him you want a 5K card and let him review your finances and your chances of being approved are extremely high. I approved people like you quite often when I was in banking. as a last resort and it is cheap (there really is no way to build excellent credit without paying some interest) you could start with Best cheapest way to establish credit is a secured bank loan pay off over 7 months and repeat until you can get an unsecured one. By the time none secured one is paid you will get a real card with a decent limit no issues. The reason you must pay off over 7 months is any loan under 6 months gets no score from FICO. If you can get a bank that does coupon loans these are awesome because the day you get your coupon book you turn in at least 7 coupons and pay all but a few dollars so the only interest you pay is on the small amount and no payments are due but are recorded as monthly payments. Most banks and all credit unions no longer do true coupon loans because people like me did this but when I decided to start credit I went from none to my first real CC with 10K limit in about 18 months and it only cost me about $30 or so in interest

Calvin C

forget all the suggestions of secured card people with no concept of money get those and the fees are for suckers. Banks love people like you because you have something they want which is money. I would just go my branch speak with the manager tell him you want a 5K card and let him review your finances and your chances of being approved are extremely high. I approved people like you quite often when I was in banking. as a last resort and it is cheap (there really is no way to build excellent credit without paying some interest) you could start with Best cheapest way to establish credit is a secured bank loan pay off over 7 months and repeat until you can get an unsecured one. By the time none secured one is paid you will get a real card with a decent limit no issues. The reason you must pay off over 7 months is any loan under 6 months gets no score from FICO. If you can get a bank that does coupon loans these are awesome because the day you get your coupon book you turn in at least 7 coupons and pay all but a few dollars so the only interest you pay is on the small amount and no payments are due but are recorded as monthly payments. Most banks and all credit unions no longer do true coupon loans because people like me did this but when I decided to start credit I went from none to my first real CC with 10K limit in about 18 months and it only cost me about $30 or so in interest

Calvin C

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