You can improve your credit score by having an open major credit card. On this credit card you should try and keep the monthly balance around 10% of your available credit line. If you have an available credit line of $2,000 then you want to keep your monthly balance at $200. This will show the credit bureaus two positive things:
1. Your credit is being used.
2. Your ratio of available credit to debt is high.
This means you have available credit that is not being used. The credit bureaus place a large emphasis on your available credit to debt when they calculate your credit score.
By showing you have credit that is not being used; your score will get a bump. This method is most effective with a revolving line of unsecured credit.
If you have trouble getting approved for new lines of credit, then consider being added as an authorized user. Find a friend or relative with good credit and ask them to add you as an authorized user to their credit card account.
This is called piggyback credit. There have been policy changes to discredit authorized users from receiving the benefits on the credit report.
However because of the size of the credit bureaus and how difficult it is to change credit scoring between all three credit bureaus this change will take time to implement. It is estimated that authorized user's will still receive a benefit for the next 6-8 years.
You will have all the information from this credit card account report on your credit too. If the account goes delinquent it can hurt your score, just like it can help your score. So choose your friend or relative carefully.
It is very easy to be added as an authorized user. The account holder calls the credit card issuer and says they want to add you as an authorized user. It can all be done over the phone.
You then will have a copy of the credit card with your name on it mailed to your house. I recommend returning the credit card to the account holder.
The accounts' details are then reported on the original account holders' credit and yours. This way you receive the benefits of on time payments and available credit.
As I said, this will only be effective for a limited time. So take advantage while it still is effective and stop paying the high cost of low credit.
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