How to obtain a first class credit rating.
If you have no cash at all, as ever, life can be difficult, and you
will need some cash to prime the pump, between $1000 and
$2,000. Look amongst your possessions for what you can sell by
classified ads in your local newspaper, carboot sale etc and
turn those assets in cash.
Go to your nearest bank and open a high interest savings
account with, say, $1000. Remember, you are not asking the
bank for credit or current account facilities that might lead to
them making a loss on you by default: you are putting down
hard cash - no risk to them.
After a week or two, apply to the bank for a personal loan
using your savings account $1000 as security. Once again, the
bank is taking no risk, so that a loan of $1000 should be
forthcoming. Once granted, you should take this loan of $1000 in
cash. Keep the repayments of the loan to a minimum by going
for as long a period as you can get, say, 2 years. This should
cost you less than $2 per day to satisfy the regular repayment
plan.
With the $1000 cash in hand from the first bank loan, go to
another bank and do exactly the same as you did with the first
bank: open a high interest savings account, then after a week
or two apply for a personal loan using your savings account of
$1000 as security for a personal loan of $1000. Keep going
through this procedure until you have half a dozen banks
holding your savings account as security for a personal loan.
With the final bank, the cash from the personal loan can used
to help repayments on these six loans.
Repay these loans as fast as you can and on repayment of each
loan, the savings account used as security will then be available
for your use.
What has this excercise cost you at the end of the day?
Remember, your savings account at each bank is earning
interest, so the cost to you will be the interest earned minus the
interest charged on the personal loans, and the original $1000
you started with will return to your pocket.
The next stage of this project is to go to the original first bank
and arrange another loan of say, $1000, this time secured on
your home. If you rent your property the bank may want some
form of security, in which case use the savings account with the
same amount you wish to borrow deposted in it. The bank just
might make you the loan without any security; after all you
have just proved to them that you can handle and satisfy a
loan.
Do the same with the other five banks in the original set-up,
repay the loans as soon as possible, and you will have on your
credit rating the information that you have had 12 different
loans, all of which have been repaid in a satisfactory manner,
and repaid well before time. This shows prospective lenders
that you have a first class credit history. This whole excercise
could take you 6 months to achieve; as little as 2 months if you
have no previous bad debts or County Court Judgements
(CCJ's) recorded against your credit record. If you do have
CCJ's, see our guide on how to remove CCJ's.
Having established a good credit rating and good relationship
with the banks, apply for their credit cards. To begin with, the
credit limits will be low, but by borrowing money off them and
repaying it, up to the given limit of your credit card each
month, you will be able to request that they up your limit. As
you can see, this excercise is similar to your original plan:
borrow small amounts of money, pay it back fully and on time.
The credit card company can then see that you are able to
handle the borrowing of money and will increase your credit
limit.
Over a period of time you could find yourself with credit limits
of up to $10,000 on each credit card: these money borrowing
excercises will speed up the process. Do protect your hard
earned credit rating. Some people may think this whole
program is a lot of effort just to aquire a basic credit rating,
in which case only the first half of the excercise should be
considered. By going through the whole excercise to enhance
your credit rating will allow you to enter the next stage of the
overall strategy, to be able to borrow tens of thousands of
dollars from your credit cards or banks. Why would you need to
do this? To be able to get your hands on large amounts of
short-term cash to help you make serious money in a
program to increase your personal wealth.
See our guide "Borrow $20, 20, 30,000 with your credit cards"
