Paid off credit card debt!! now what??? real credit pros answer only!?

Question

I have paid off all my credit card debt... but when I got in debt I had lost my job so on and so forth(this all happened 2005) and they all went into collections so I can no longer use them. how do I repair my credit and build my credit score and how soon after paying my debt off is it reported to the credit bureau's and how many points does my score rise?

Answer 1

1) Maintain a good creidt history form now on.
2) Establish a form of credit (even a high interest one) so that you can establish a good history fom now on.
3) Do not go overboard!

You may need to get an Orchard card or something that is a not so good credit card with a high interest rate and a yearly fee. But if you use it just a little and pay to $0 every month, you will be building good credit. The key is to not extend yourself again. One thing to do is like put a blockbuster membership on it that bills you for $10 a month. This little bit every month will show good history.

You cannot NOT have credit cards, since lacking a revolvong credit account is a big negative on your credit score. Some car loans can be had with bad credit, and they are a good way to establish long period credit if you need it.

You may still qualify for a mortgage as long as ALL your outstanding debts are paid off and you can prove it in a line for line review of your credit report. Countrywide does these sub-optimal loans alot. Be prepared for a higher than normal interest rate. The nice thing is that rates are high now and will likely come down in the future. So right when you are gaining good credit you will have the ability to refinance your home to a much better rate.

Answer 2

You can try writing a nice letter to the collections department of each company requesting removal from your credit report; it does work with some. You can also attempt to contact the collections company's that took over the debt and see if they have any suggestions, or if you can do anything to clean up your report. You are not likely to get any positive responses, and I've found writing to be much more effective than calling, especially with the collection hounds.

You can challenge the negative data on your report directly with each credit reporting agency. The trouble with this is if they verify the debt, it stays on your report.

The good news is that over time your score begins to rise as these delinquincies get older. They can legally stay on your report for 7 years.

As to credit score, many factors go into computing this score, such as debt to income ratio, delinquent payments, how recent, how much debt you have, public records, etc. I would suggest talking with your bank to see if they can set you up with a secured credit card (generally attached to a separate account which you can't touch). It cost you 2-3% to do this but will increase your credit score faster.

If you decide to hire a credit clean up company, hire an actual attorney and get information and recommendations from others. The online sites are all pretty much scams. They have you over the wall so to speak, as legally they don't have to do anything before the 7 years is up. They are required to update your report with the zero balance paid in full. Make sure they have done that. When you apply for credit, don't try to hide what you know is in your report. Come forward with the negative data, be honest about it and the circumstances *before* your report is run. Many companies are very receptive to this.

Prepare to pay higher interest for a year or so. If you need a large purchase (like a car), take the crummy interest and make the payments for a year. Then attempt to refinance through your bank for a better rate.

I filed for BK in 1994 and though I paid it in full, am only now starting to get close to premium rates. I've gone through all of this myself. You're bank will be your best friend while reestablishing yourself, so if you don't have a longstanding relationship with a bank, find one. Credit Unions are especially helpful in my experience.

Kind Regards-

Answer 3

It won't neccesarily make a huge jump-- if any. You are paying on collections, which are really tricky-- they stay on your credit even if they do mark them as 'paid'.

Try initiating an investigation and claiming that they told you they'd remove the collections when paid. Believe it or not, it works, most of the time. Only deleting the accounts will make a significant rise.

That said, you need to get some new accounts going-- even small, secured credit cards will help. I know someone who paid off every bad card but didn't go get 'new' credit-- and his score didn't move for years, until he finally went and got some cards and started a new, good payment history.

Answer 4

If you have a checking account, keep a positive balance in it. If not - go get one. Next - Just because you've paid your debt, it doesn't mean it's reporting correctly with the agencies. There are 3 - transunion, experian, and equifax. Some creditors take up to 60 days for it to hit these agencies, and even then, not all will report accurately. The best thing to do in my opinion, is to get a free copy of your credit report, or even pay for it, since it's not terribly expensive - go to www.myfico.com - or www.freecreditreport.com. Tkae this report, and ask your banker to assist you with how to read it if needed. They can also give you personal recommendations as to what to do next to fix it. It's not a terribly difficult process, but it's not fast either. Be patient, and know you can repair your credit if you are patient, consistent, and work with the agencies and creditors to make sure it is being reported accurately as well. Once the credit cards are all taken care of, I recommend using ONE card... charging on it, and paying it off immediately... to re-establish good credit. Also, as you can afford to do it - I would recommend an auto loan... Just make sure your payments are always on time! Good luck!

Answer 5

No one knows how much your credit score will go up.
1 ) get all 3 copies of credit report.
2) write to all creditors asking them to remove the account
3) Wait 2 weeks and call creditors if you haven't heard from them, if they refuse your request, write letter to credit bureaus and dispute EVERYTHING, if it was a lot only dispute 4 things per letter , send 1 letter every 6 days til everything on your report has been disputed. WAIT TIL U HEAR BACK FROM THEM, YOUR CREDITORS ONLY HAVE 30 DAYS TO RESPOND OR IT WILL BE REMOVED. I PROMISE SOMEONE WON'T RESPOND.
4)LASTLY--- When the bureaus report back to you that certain accounts have been verified, then you send them a copy of your paid in full letters, or copy of receipt. They'll update them.

Never send original, and keep your receipts for a very long time. It takes time but ut will work.
Aslo go to www.myimaginecard.card everyone gets approved

Answer 6

You need to get a secured card.charge your food,gas,and your living expenses.Pay it off every month.In about three months one of the major credit card companies will give you a unsecured.your credit score will improve with this plan.Do not get over three cards.Good luck Dave

Answer 7

I have the answer, but I am not a real credit pro so, me solly, no can tell you.

Darryl S.

Answer 8

Now you will die, not being in debt is unacceptable, it is the American way!

Answer 9

Hi, here's some great reading, might take you a while though:
http://credit-cards.ebookorama.com
http://finance.ebookorama.com
http://credit.ebookorama.com
http://credit-repair.ebookorama.com
if you get any luck please don't forget about me lol, hope it helped you, thanks!