Help repairing credit, what do I do now?

Question

I am 23-yrs. old and I am desperately trying to repair my credit. I have paid down all my collection accounts except for two medical bills totaling $1800.00. These two accounts are 4-years old. However, I have recently obtained an auto loan and a secured credit card as of April 2006. I pay both before the due date and I pay the complete balance on my secured credit card. My credit score has moved from 580 to 620.

I also have student loan accounts that are in deferment. In all I have only 4 open accounts in good standing. What do I do now? I was wondering should I apply for a department store charge card to gain another open account or should I try to pay my medical bills in collections? I know that they have already harmed my score but I don't have the $1800.00.
Would I be able to get a department store card w/ a 620 score. I would appreciate any help I can get. I am graduating from grad school soon and I'd like to have a more favorable score for large purchases.

Answer 1

If it is in collections you don't owe the dept. They have been wrote off and the doc. was pd for it and then they was pd again when the collection agency brought the dept. Write a letter to the agency and tell them that is not your dept. You owe the Doc. not the collection agency. I worked collection for 4yrs and you don't owe them anything. Get it removed from your credit all together. Know the law. Contact the 3 credit agencies and get it removed from your credit. or call 1800.601.3401 Ask for Paula and tell her Alicia gave you the # and by all means DO NOT GET ANY MORE CREDIT CARDS.

Answer 2

I would not apply for any new credit. Credit inquiries (as well as turn-downs) actually impact your credit score as well. Also, having open lines of credit can actually be a detriment when applying for a loan. Lots of people don't know that, but banks (and credit card companies) look at how much available credit you have as a liability. Basically, you could go out and charge a bunch of stuff and not have the income to pay it off.

Pay off your medical bills as soon as you can, and make sure they notify the credit reporting bureaus that they are paid off. Anything that goes more than 3 months past due is a huge black mark on your credit score.

Repairing credit takes some time... if you keep all of your accounts in good standing, and pay off your medical bills and do not open any new lines of credit your score should keep going up.

Other tips--- do not max out your cards. Carry no more than 50% of the credit limit as a balance. That helps as well-- it shows you'r enot overextending yourself. And, keep a close watch on your report to make sure when things are paid off they get noted.

Best of luck! It sounds like you're taking HUGE steps forward.

Answer 3

You are already on the right track to rebuilding your credit. Acquiring more debt (getting another credit card) right now is probably NOT in your best interest. Continue making timely payments on your open accounts. In terms of your credit score, paying off those medical bills will not have much of an impact unless the creditor agrees to list it as an open and current account. They may be willing to and it doesn't hurt to request it. Other than that, keep everything like it is for at least another year, paying on time.

Negative items fall off your bureau automatically after 7 to 10 years. Get more information from the credit bureaus. For links and contact to all 3 major bureas, check this link: http://www.restartyourcredit.com/know_the_score.html

Answer 4

You now have to much dept. Pay off all your accounts first the medical. Call the agency handling those accounts and set up a payment schedule, even $10.00 a month for now.Then start with your student loans. If you keep getting charge cards you will get yourself into a lot of financial trouble. If you can pay your car payment you did at one time have extra money a month you could have put on these other bills.

Answer 5

My advice might not be exactly what you hope to hear. Here it is....DON"T WORRY ABOUT BUILDING YOUR CREDIT. Worry about paying off all of your debt as quickly as possible. If you have any credit cards, leave them open with a zero balance but don't use them. Cancelling your cards can hurt your credit score. Leaving them open will show creditors your debt history. I guartantee that if you quit opening up new credit cards and start paying down your student loans and other debts, and start living on cash and not spend more than you make, your credit score WILL SKYROCKET. It happens automatically. Using debt poorly or having too many inquiries for opening credit card accounts, etc. lowers your score. Hope this helps.

Answer 6

I believe you need to pay the medical bills or any delinquent charges. If you can't pay the whole thing, call them and ask if you can discuss a payment plan. It's going to take time. Just building good history on other credit doesn't take away the bad marks. You have to pay that stuff off. Then after a few years you can get a lawer and have the information removed from your report.

Answer 7

Dont try to go for those department store cards. The more you apply, the more you hurt yourself. Continue doing what you are doing. It will take time. You should monitor your credit. The only site I trust with my credit report is www.annualcreditreport.com
You can choose one of three companies and it is absolutely free, secure, no strings. I heard it off some christian radio station or something.

Answer 8

NEVER and I mean NEVER open new credit accounts to repair an already bad credit rating. You should focus on paying off all of your debts, including those that have already negatively effected your credit rating. Paying off those debts that have already been sent to collection won't negate the fact that you fell behind on payments, but it will dramatically improve your rating back to near where it was before getting behind.

Answer 9

The best way to have good credit is not to have bad credit!
Pay all you bills You do not have to pay the full 1800, set up a payment plan and stick with it. It takes years to build good credit.

Answer 10

Instead of adding debt, I suggest you pay down your debt. You can negotiate payment terms on your medical bills and begin a payment plan. This will increase your credit score.