Debt Free

I posted on June 26^th about using the piggybacking technique to quickly raise your credit score. There are other effective techniques you can use to give your FICO score a quick shot in the arm. One such technique that most people aren't aware of is the practice of using sub-prime merchandise charge cards. These credit cards are issued by merchants to credit challenged people. There are two catches here and one huge benefit for the consumer looking to raise their credit score.

First, the catches to the use of these cards –

#1 - It only allows you to purchase merchandise from the vendor who issued the card.

#2 – You have to pay a fairly large deposit on the merchandise you purchase using these cards. It's usually a catalog or website, and the prices can be somewhat less than competitive. Another problem is that some of the companies that issue these cards tend to fall on the wrong side of the tracks. You should choose carefully. It's essential to check them out carefully before applying. Don't worry about actually getting the card however, because when they say you absolutely can not be turned down, they're not kidding. If you can fill out the app, you'll get the card.

Ah, but the benefit can be huge. The cards are looked at by the credit agencies as is any other revolving account. In addition, their limits tend to be rather large. So, for the purposes of calculating your credit score you have, a revolving credit account with a relatively high limit. That raises your aggregate credit limit while only raising your outstanding limit a small amount. If your credit utilization score is too high, this will help bring it back in line. In addition, it will show up as a revolving account with a “paid as agreed” notation on your credit report. The key is to use it only for the purposes of raising your credit score, not as a card with which to by things. If you've had problems in the past with restraint, this may not be the strategy for you.

This is another strategy, that can fairly quickly raise your credit score, but, as happened with the piggybacking technique, it could one day be eliminated. There are signs that some of the credit reporting agencies are looking at not including the effects of this type of credit the way they do now.

For some more “underground” credit improvement techniques, see the Credit Secrets Bible. It will help you get a better understanding of how credit really works and some great ways to improve your score that can save you thousands of dollars on mortgages and other major purchases by getting you lower interest rates on the loans.