Repariing my credit scores. What is the 1st step in repairing my credit score? I just pulled my report. Seeking advice.
Repariing my credit scores. What is the 1st step in repairing my credit score? I just pulled my report. Seeking advice.
0 Answers
maryjon4845 wrote on :
I agree with others that say to pay off and close as many of the small credit cards that you possibly can. You need to call and actually have them closed because paying them off doesn’t close the account. My daughter did this and her credit score increased drastically.
nidradeb wrote on :
I’m vigilant about this too and there is sage advice here:
Don’t close the accounts
Consider a debt consolidation loan to pay off balances as a lower interest – funny enough it will likely increase your score and you’ll be paying less interest on revolving debt.
Pay regularly and on time. I set up auto payments and transfers through my online banking system. This prevents me from ever getting a late charge and I ‘pre-plan’ my spending. I know I have to pay off debt first before spending on anything else. Late payments will kill your score.
As your payment history improves, and your scores go up, call the credit card companies and see if you are getting the lowest available interest rate (i will almost guarantee that you are not – and as your score improves, your interest rates will go down.)
Good luck!
Nancy Murray wrote on :
Aside from not closing your accounts with zero balances, on time payments of more than the minimum helps to repair your credit. Attack the balance with the highest interest first while still making constant payments on the others.
candace wrote on :
HI — I think actually it’s your debt to credit ratio rather than open cards. That is a real killer and what I struggle with also. I understand that you should not owe more than 70% of your available credit. The way you repair is pay off and make your payments on time, and your score will recover. It’s not easy — like losing weight — takes will power and self control. And it also doesn’t happen overnight.
MaryBenson wrote on :
I worked as a mortgage broker for 12 years, and talked to the credit bureaus many times about clients’ questions. For one thing, while “too many cards” look bad, it also looks bad if you close all of your unused accounts. Here is why: let’s say you have $12,000 in available credit, and $5,000 in balances. And let’s say you close the cards that $6,000 in credit you aren’t using, to keep yourself from being tempted. You would think that would be logical.
However, your rating suffers when you do this. Here is how the logic goes: you have $12,000 you could be using, and you are only using $5,000 (leaving $7,000 in available credit you aren’t using–what good self-control!). You close the unused accounts, and now you only have $6,000 available, of which you have used $5,000. You look like–and are rated as if–you are someone who maxes the cards out. A better course of action for the unused cards is to put them in a baggie filled with water and freeze them. By the time you can thaw them out, you will have thought better of the impulse purchase.
The “ideal” credit profile–not to thin and not too thick–is to have 3-5 open accounts that are used at least once a year. I advised my clients to charge 1 tank of gas, go home and pay it off online the same week, or at least subtract it from your checkbook balance, and pay it off in full. It will keep an account active and also keep you from having a balance that creeps higher.
The other rule of thumb is to look and dispute any errors, if you find them.
Resolve to pay down the balances using this strategy: make the minimum payment on each card each month, and work on the lowest balance to try to get it paid off over a period of months. When it is paid off, take the money you were paying on that card and pour it onto your next lowest balance, and so on.
Many of my clients shot themselves in the foot by saying, “I am not using any cards at all anymore!” and then found they couldn’t buy a car or a house because they had no credit. Oddly, having the self-control to only buy what you can pay cash for is seen as being too unpredictable by the credit rating agencies. They want to see you buying things, and paying them off. So swearing off the credit system altogether can hobble you in the long run.
Other specific questions? I’d be happy to share what I know. You aren’t alone in your situation–especially now, you have a lot of very good company who got caught by the this downturn.
Geri Greene wrote on :
Here is a list of agencies approved by the Department of Justice:
http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm
There might be someone in that list to contact for addictional advice. I know I am aware that in order to change residences I need to improve my credit score, so am writing to “me” when I write this to you. Feel free to share if you find more that is useful.
Geri Greene wrote on :
There are public agencies that can advise you on repairing your credit. Check their ratings with the Better Business Bureau. As I understand it, there is no fee, or a very low fee for the counseling. DO NOT SIGN UP WITH SOME OF THE COMPANIES THAT WILL TAKE YOUR PAYMENTS AND THEN PAY CREDITORS
Geri Greene wrote on :
My fingers clicked keys that posted the answer before it was complete. One-co-worker contracted with a firm that obligated her to pay them, and they would pay creditors. They did not pay the creditors in a timely manner and it put her in further debt and late payments. United Way or your BBB might be a good source of locating a company. AARP also offers this type of service, as I understand it. I am looking for further info for both of us, and will post if I find the recommended resource in my area. I’m beginning to look at mine also and see how I can improve my scores. Bless us both!
Geri Greene wrote on :
You likely know Suze Orman, David Bach
[ http://www.finishrich.com/free_resources/fr_home.php ] and David Ramsey are all financial experts who offer many free resources on their websites.
Trythemon wrote on :
First thing is to see how many credit cards you have if there are any without a balance on them, then contact them and close the accounts. Too many cards look bad.
If you have a card with a dfault on it, try to pay that off first and then close that account. It may not be the financialy sensibel thing to do as far as Interest is concerned, but if you have a missed a payment or have been late with a payment on a card, you need to get that off your report as quickly as possible. I am sure there will be other people along with other ideas
Susann
http://www.highheel-shoes.co
Nancy Norris wrote on :
Please DO NOT close your accounts.I got this from Susie Orman who seems to be ok! You want to keep small balances,pay then monthly,thats what they want to see.