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Bad credit score? Here's how to fix it

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How can you find out to which bureaus the card is reported?

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Ask the bank or the credit union. They should be able to tell you where they report. That's one of the features (of a secured card), and that's what most people do it for, so they're used to that question.

But there might be some unscrupulous ones who will try to get your money and imply that they're going to report them and they don't. You do want to be aware of that. Or they may just report to one of three bureaus, in which case, if it's a great deal you're getting, that's OK. But ideally you want it to be with all three, because down the road, when you're going to be applying elsewhere, you don't know which bureau the future creditor is going to use. It would be a shame to have a couple years of history now with this one bureau, and you need a car and there's a good rate being offered and unfortunately they pull the bureau that your card isn't being reported to.

At what point would someone establishing credit be creating too many inquiries?

Inquiries are going to weigh more heavily, but it depends on the overall profile of the report that's being scored. For example, an inquiry is going to matter more on somebody that has a very short and minimal credit history vs. somebody that's got a long and robust history.

For example, a student with a student loan on his credit report, if he gets a few inquiries, that's going to affect his score more negatively than maybe that person's parents, who've got years and years of credit history, a good mix of that stuff. Once you do get that secured account and then you start going to all of the big banks and the national department stores, and the oil companies and that kind of thing, you start generating all these inquiries, and that's going to have a negative effect on your score. Not as bad as missing payments on that account or maxing out that one account -- those will trash your score, to use a technical term.

Inquiries have a minimal effect, but they are something to be aware of. The question of what's a good number of cards to have, ideally, while this varies, it's definitely good to have more than one, and I would say for somebody that's starting out, less than five.

What's going to be most important again is not even being 30 days late. Don't be a minute late because you have no track record and everything you do is going to be under a magnifying glass. You want that to be spotless in terms of your payments and also in terms of your credit card utilization. If you just have that one secured card with a $500 limit and your income is such that you charge up $500 and pay it off every month, that's not a problem. But if they pull your score and you have a $500 balance on a $500 limit and that's the only account you have, your score is going to take a hit. There's where it's going to be good to have more than one account. At that point, nobody's going to give you a huge limit. It's probably good to have two or three and spread the debt around a little bit or use one one month and use (another) one the next.

You can have just as good a score if you have three accounts and your utilization overall is 25 percent as having that one account with your overall utilization at 25 percent, everything else being equal. It's more important to have one account paid on time with low balances than to work too hard at getting multiple ones.

In getting those additional (credit cards), you want to do your homework and make sure you're going to qualify -- if possible, even ask them what kind of score they require. They're not always going to tell you and they're not always going to know, but if you can get that information, you might save the trouble if you're not there. There are Web sites out there where people talk about what credit card lenders require and what bureaus they pull and that type of thing.

Next: What matters with foreclosures is how long since it took place.
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