If you're renting and put down a security deposit, ask for some of it back. There are two main reasons why landlords retain a security deposit - to protect against damage and to protect against non-payment of rent. If your score was lower, the landlord probably asked for a larger deposit. Now that you've improved your score, ask if you can have some of the money back. This works better with individual landlords rather than management companies because of the red tape. (while you're at it, you can always try to negotiate your rent)
Shop around for insurance. Take a few minutes (fifteen is all it takes according to Geico!) to shop around for your car insurance because credit plays a role in determining your premiums. You might find savings just by shopping around after an increase in your score. You won't be able to get your current insurance to lower your premiums until the next renewal but most insurance policies do not penalize you for switching.
Try credit piggybacking. Bankrate published an article on credit piggybacking and described how it worked. Someone with a good credit score, our credit score seller, would add someone with a bad credit score, our credit score buyer, as an authorized user on their credit card. The buyer wouldn't get the card or get access to the line of credit, they benefited by having that account appear on their report. Cost? Bankrate cited around $200 per user. FICO considered negating the effects of piggybacking with their FICO 08 score but backed off, so piggybacking can still improve your score and you can still make money off it. (there are risks to this, the buyer will know the bank, how much credit is available, and other details but not the card number)
Here's one technique that won't work now but might make a comeback - keep this in your back pocket. Years ago, you could play the balance arbitrage game of taking out a 0% APY balance transfer and depositing it into a online bank account. Many credit cards didn't charge you a fee for the balance transfer so you were basically borrowing at 0% and earning 5% interest on the savings. Nowadays, savings interest rates are lower and balance transfers carry fees, making it a losing proposition. While we don't yet know if this is the end of the 0% balance transfer era, it's still good to know this strategy in case it makes a roaring comeback.
Do you know of any other ways to cash in on good credit? Have you sold an authorized user spot in a piggybacking scheme? Did you get in on the balance transfer arbitrage craze a few years ago?
Jim writes about personal finance at Bargaineering.com.
(Photo: frankieleon)
]]>Before that, it's all zip code and credit history.
]]>my mom put me on her credit card when I was 16 and on an out-of-country trip, she just wanted me to have a way to buy a plane ticket home if everything went awry. When i got back she took her card back but kept me on the account until i was about 22. She charged up big balances and paid them off in full, on time every month for YEARS. It helped my credit score immensely, but if it weren't my mom it wouldn't be worth it. The risks are simply too great.
]]>@imationlh: And it should be outlawed as I pound that point over and over again on credit and insurance forums. If insurance is required by law to have, using credit to price it should be banned. Housing is a basic human right, and landlords should be banned from using scores too. But whatever, as the stomach turns.
]]>Why not check your credit reports? www.annualcreditreport.com . Check with your cousins address.
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You can get a US checking account with no credit just fine, bad credit is a different story.
]]>(Sorry for shouting.)
But if you do this, you might end up with Allstate, and Allstate sucks. The reason their rates are so low is that they deny legitimate claims. That's also why they're known as the worst insurance company in America.
Don't just go by low premiums, go by how they will treat you when you have a claim. If you pay your low premium for years only to be denied coverage or low-balled when you have a claim, you're just throwing your money away. Pay a little higher premium and enjoy peace of mind - that's what insurance is for. If you're with Allstate, switch now to a more reputable insurer.
]]>I put the $1200 in a 1 year CD earning 2%, so I'll make 2%. If I'd used my CC rewards card I would only have gotten 1%, so this is definitely worth it.
]]>I had thought that it was already discounted from the FICO scoring which is why I then got a bunch of checking accounts while in China (2 from local banks, one from a UK bank, and one from the local Citibank branch) in case I can't open any when I get back to the US due to credit checks (my report is pretty much blank). So is it?
]]>Agreed. Being an AU on a spouse/other relative's account is fine, but what's being alluded to here is very dodgy indeed. Seriously - I can't believe Consumerist would be advocating this at all. It's such a very, very bad idea, and is the whole reason why authorized user accounts very nearly ended up being discounted from FICO scoring altogether. Plus... I thought that AU accounts would only count now if you share the same last name or address as the main accountholder?
]]>Anybody who has spent any amount of energy in their life protecting their credit should NOT piggyback... you're just looking for regret.
]]>Also, insurance companies have their own database for tracking you. Let's say you got in an accident 5 years ago. Although, it's been wiped from your public DMV record by now, the CLUE database still has it on record.
So if you were to switch insurance companies, the new insurance company would most likely query the CLUE database rather than the DMV records. So yeah, you're kinda screwed and wind up paying the higher premium anyways.
]]>If you have a credit card since, say, 2001 and you add an authorized person with short credit history today, credit report of that person will reflect that joint account was open 2001 (not in 2009). So you've just made the length of that person's credit history 8 years. Credit score skyrockets at this point.
This trick greatly helps newcomers to the country (if you can trust them).
It's funny - my wife's much credit history is much longer than she's actually been in US.
]]>How about a thread "How to Cash in on Your BAD Credit"?
It can actually save you more money than good credit, I know!
]]>@wcnghj: I don't agree with piggybacking if you are "acquaintances" or roommates, even close friends. My SO and I have been together for 6 1/2 years, and it sucks that we can't usually go into a financial venture together (like buying the house).
Doing the piggybacking has immensely helped us. But it only works in CERTAIN situations.
]]>Piggybacking is STUPID, from a relative for free, yes, it's fine.
]]>I piggybacked after my divorce, my SO and I opened 1 credit card in January '08, and two more in July '08- My credit score jumped from 580's to 625 in less than a year. I bought a brand new van in January '09, him as the primary and myself as the secondary (so the title/insurance were in my name). We got 10.49% interest in January, and I just refinanced my vehicle at 5.89% at my local credit union.
We originally tried to get the loan thru the credit union, since they offered us 6.49%, but they would only approve us for $21,500. Here it is, 9 months later, and I put extra money on the principal, PERFECT payment history for 5 years on car loans, and they refi'ed same day.
It DOES work. But I also paid off anything small remaining on my credit, plus besides my initial loan inquiries in January, I hadn't applied for credit for over a year. Combine piggybacking with credit repair and stop trying to open credit lines, it does WONDERS. I'm waiting for things to fall off next year, and I estimate i'll have a 700 credit score when that happens.
awesome.
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