Bad Or No Credit? How to get started (or restarted)!

It has been a while since I have written about credit. It is a subject I know a good deal about from personal experience. I am pretty familiar with the US credit reporting and lending system and have used that knowledge to my advantage many times.

Today I am going to focus on building or rebuilding credit. Since we are in the midst of a recession there are more folks out there that have to start over. With banks and credit card companies becoming more and more strict on who gets approved we have to be more creative in order to get started.

There are a few options for those trying to build a credit track record. Even in today's tough credit world you can still find these. Here are my suggestions:

• CD Secured Loan - This has been around for a while. It is the least risk to a bank and low cost for the borrow. You open a CD and use it as collateral for a loan of the same amount. Usually $1,000 or more. A great way to build a good track record for loans.
• Secured Credit Card - These have also been around a while. They usually come with high fees so it pays to shop around. You deposit collateral money into an account and that amount is your credit limit. A great way to rebuild bad credit.
  
• Social Lending - This is relatively new and a bit more difficult. It can also be costly in terms of interest. You are borrowing from other people through sites such as prosper.com. Rates can be as high as 35% but is a good last resort option.

No matter which path you choose building or rebuilding credit is no easy task. It takes time, patience, money, and discipline. Evaluate your past mistakes if you have bad credit. Read blogs and columns online about mistakes to avoid of you are starting fresh with no credit. Our credit reflects on us as people whether we like it or not. Let's put our best foot forward!