The first thing you should do before applying for a loan is go to AnnualCreditReport.com and get your credit report from all three credit bureaus to make sure that there is no inaccurate information that could be damaging your credit score. Everyone is entitled to a free credit report from each bureau every 12 months. You want to be sure to check all three because, although it is a good sign that one of them is accurate, there can be discrepancies so don’t assume that they will be the same.

The next thing you should do is maximize the positive information that is consistently being reported to the credit bureaus (and therefore on your credit report). If there is negative information on your credit report, unfortunately it is not under your control to remove it. Negative information will be removed from your credit report automatically 7-10 years after it was first reported. If this is your situation, it is even more important to increase the flow of positive information in order to dilute the negative.

Your credit score is calculated from a lot of different credit data in your credit report, so there is no formula that guarantees your score will go up in any specified period of time. The factors that affect your credit score include things like your payment history, the length of your credit history, the amount of debt you have, and the percentage of credit you use in relation to the amount of credit that is available to you.

Before you can start working on improving the information that affects your credit score, you need to make sure that no new negative information is being reported on your credit report. For example, you don’t want to have an open credit card account on which the lender, on a monthly basis, continues to report you as being delinquent. It’s fine if you have existing negative information on your credit report, but it is important that you cut off any additional negative information from coming in before you can start improving your score.

Yes.  You don’t have to have a credit card to have bad credit. If you have or have had a student loan, auto loan or mortgage that you have been late making payments or defaulted on, then your credit score would have been negatively affected.  Likewise if you have had a credit card in the past that you managed irresponsibly then there could be damage on your credit report for up to seven years from the date that any of your old accounts were opened.  Additionally, if you have any accounts in collections (e.g. medical or utility bills), your credit would have suffered.  Lastly, if you have declared bankruptcy in the last 10 years, then your credit is probably pretty bad.

If none of these things apply for you and your are still unable to get a loan, then you probably have no credit, in which case you may want to apply for a secured credit card.  With a secured credit card, a deposit starting at $200, acts as collateral against your loan, and you can start building/improving your credit history with very little risk to you or your lender.

Your new credit card will show up on your credit report roughly a month after you receive the card in the mail.  This first record of your new account on your credit report will mark the end of your first billing cycle.  Each credit card company reports according to its own schedule, therefore there is no set industry standard date for reporting.  Usually, most credit card companies report to the credit bureaus within a couple days of the close of your billing cycle, which falls roughly on the same date every month.  For example, if your billing cycle ended on the 15th of each month, your credit card issuer might report to the bureaus on the 16th or the 17th of each month.  Given that you haven’t received your first statement, you can call your new credit card issuer to find out when your billing cycle begins and ends.

When you fill out a credit card application the credit card issuer will check all three major credit bureaus – TransUnion, Experian and Equifax.  Your credit report should be very similar or the exactly the same across all three bureaus.  If it is not, you may want to check for inaccuracies.

Before deciding to approve or deny your application any credit card company will look very closely at the timeliness of your payments across all of your revolving accounts, the length of your relationships with your lenders and the percentage of the credit that’s been extended to you that you are using at the time of application.

No.  It won’t ruin your credit, and unless you are 30 days or more late, the late payment will not even show up on your credit report.  That being said, this is a very bad habit to get into, so make sure you don’t do it again.  Even if you are just one day late, your credit card company will assess a late fee on your account.  If you are more than 30 days late, your credit card company will report you to the credit bureaus and this one late payment will stay on your credit report for seven years, even though it will only have a marginal impact on your actual credit score after the first couple of years.  The bottom line is that you should everything you can to pay your credit card bill on time EVERY time.

No.  Making your credit card payments by the due date is what will affect your credit score.  There are no benefits associated with making early payments.  However, making your payment well before the due date on your credit card statement is a great habit to practice.  Waiting until the last minute to make your payment can sometimes cause it to be marked as late.  This can be attributed to the time it takes to process your payment as well as other factors.
The three things that most impact your credit score and that are most important to keep in mind are timeliness of your payments, the length of your relationships with your lenders and the percentage of the credit that’s been extended to you that you are using at any given time.

No, not at all.  Debit cards, sometimes referred to as bank cards, are as widely accepted as credit cards, and transactionally, they work the same way.  However, a debit card is linked to your personal bank account, and as soon as you make a purchase with a debit card the money is immediately withdrawn from the account associated with it.  Because of this, there is no bill at the end of the month for the purchases made with a debit card – just an itemized statement.  Debit cards were created for convenience, but they have no more an effect on your credit than would writing a check.

Alternatively, when you make a purchase with a credit card, you are simply lowering your amount of available credit, and you will receive a bill at the end of the month for which you are responsible.

There is no standard number that your credit score will go up each month if you have a secured credit card or line of credit of any other kind.  There are a wide number of factors that determine your credit score and these factors are all based on your behavior and not on what type of or how many credit cards your have.  Plus your credit score is calculated based on your overall credit history, not just the activity on one account.
A secured credit card works just like any other credit card, expect for the deposit that’s required to open the account.  If you are opening a secured card account because you have no credit or bad credit, then you should see an improvement in your credit score, provided that you manage your secured account responsibly by paying your bill on time each month and being careful not to go over your credit limit.
Following these rules will lead to an improvement in your credit score.  However, if you mismanage a secured credit card account by going over the limit and/or not paying your bills on time, then your credit score will drop, just as it would if you did this with a traditional credit card.

If you don’t pay your credit card bill for a particular month, you become delinquent on your account, and will be assessed a late fee, even if you are just one day late.  If you miss a second payment (which will put you at 30 days delinquent), you be assessed another late fee.  Additionally, at this point your credit card issuer will report you as being late to the three major credit bureaus, which will begin to negatively impact your credit score and affect your ability to get approved for other credit cards and/or loans.  After your late status is initially reported, your credit card issuer will continue to report your delinquency to the credit bureaus, once a month, until you bring your account back to current.