by Jim Bransby

I will describe a system I used to turn my dismal credit report into AAA credit in 6 months. My problem was that I had no credit. I was out of the country for 7 years and when I returned to the US, I promptly applied for a credit card, was rejected and was told that no history was worse than bad credit. I was ready to buy a house and car and needed all three reporting agencies to confirm I was and excellent risk.

It can take some people forever to build up a credit history, especially when you donat have a credit history to start with. But with a little knowledge and a little work, I was able to build up an excellent credit history in a short amount of time. I needed to buy a house and a car, and in order to do that, you need good credit. So, I was on a mission.

I began by calling come of my friends in the credit field, by searching the internet, even by reading books on the subject of lending. Using the knowledge I uncovered, I started to build my plan to bring my credit from nothing to the top 80% of debtors.

For starters, in order to establish credit, you need to have someone extend you credit. Itas a bit of a catch-22, but you can get it with a price. You can start with a low-limit credit card, but youall have to use the card and rack up interest charges for your purchased to acount.a You need to show lenders that not only do you pay your bills on time, but you allow interest to accrue so the lenders can actually make money. If you pay your balance off immediately, lenders wonat positively report you, because youare not making them any money.

To start, youall need to research the banks and credit unions in your area, and see who can help. Make sure you sign up with institutions that offer free checking – most banks do nowadays. To begin my credit building, I opened a checking account with one of the credit unions I found, and deposited $10,000. Once that was done, I asked the credit union to extend me a personal loan of $8,000, borrowed against the $10,000 I had just deposited. This froze the $10,000 so that I couldnat use it, but it would be released once the loan was paid back.

Then, I took the $8,000, and opened another checking account and another credit union. This time, I asked for a personal loan of $7,000, secured against my $8,000. Once again, they were happy to help me when I explained I was trying to build up my credit. I did this twice more at two other banks, until the last account held a $6,000 deposit, and I was left with $5,000 of borrowed money in hand.

I started to get worried when I added it all up, and realized that I owed four different institutions $26,000 combined. I started to think about what I had gotten myself into, how hard it was going to be to keep track of my monthly payments, and that it was all going to come crashing down and destroy my credit forever. I decided to use online banking to handle the monthly payments, and it turns out that it was incredibly simple. The loans were all paid off within 8 months, and I created a record of being able to pay of large amounts of money each month.

After all was said and done, it cost me about $1725 in interest out of my original amount when all of the loans were paid back. The banks and the credit unions all got their money for their participation in my plan, but I ended up victorious, with a stellar credit rating, and four credit cards, two of which carry limits of $25,000 each.

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