what will raise my credit score faster, repaying old debts or getting a credit card and paying it on time?

Question

my fabulous credit score is a "whopping 544" and i am trying to repair my credit quickly. any suggestions?

Answer 1

pay all debts before creating new ones. pay all credit cards on time, leaving no balance.

Answer 2

First off $2000 is not a "tremendous amount", at least not to the bank who issued the credit card. You say it is bad dept but you didn't explain why you feel it is bad. Paying it off will usually help raise your credit score but not dramatically. You may say you will never ever have another credit card but most likely you will buy a car or a house or some other item that will require a credit check so it's best to get your credit rating built back up. Also a high credit rating means lower interest loans so its worth having good credit. This is not difficult but does take time. I'd pay off my debts if possible, keep my credit cards and use them but keep paying them off. It just takes self control. Within a few years your credit will have a fairly high rating.

Answer 3

It used to be that paying old debts would lower your score. This is not necessarily the case anymore due to some updates at Fair Isaac on the credit score model.

I would start with the more recent ones. Getting a credit card could be a problem with a 544 credit score.

Answer 4

Repay the old debts and do not get any more credit right now. That is the worst thing you could do in your situation. Your credit score will go higher and higher with those payments. Make sure that your payments are posted on your account. Easy and free way of doing this. Go to a high end department store Like Saks or Macy's and apply for a card. They will turn you down if you have a history of late payments of any kind. When you get the letter of denial, send it to all three bureaus and see what they have listed. If you already have a copy of all three reports, work on the worst ones and get them cleaned up first. When they are all paid off and cleaned up, just get one credit card and keep that one paid on time and your credit score will get higher and higher..

Answer 5

Any money that you pay for something, if it shows up on your credit, will raise the score. So, if you have a lot of debt, paying that money will raise it a lot. Starting a new card making payments will only do a little, because it's not much money. It's basically your debt to income ratio that makes your credit score. You can't do much about your late payment history. That can't be repaired except for waiting for them for years to dissappear.

Answer 6

Paying off the debt. Having lots of cards is also calculated into your credit score. Even if those cards aren't carrying a balance. Ideally, you want to have few cards with high limits with little or no carried debt.

Answer 7

you might not be able to get a credit card with bad debt.... not a good at a a civilized rate anyway.
payoff old debt - you will never have better credit until you do.
people-myself included though all things fell off after 7-10 years....well it doesnt....it only comes off after 7 years after you pay it.... i found that out when buying a house.
also applying for credit can actually lower your credit rating.
every time the report is ran shows up also and for what reason.
get a copy from all 3 credit bureaus....experian,trans union, and equifax - they are not the same...crazy huh.
pay off all bad debt.

Answer 8

The best thing to do is to maintain all monthly payments on your cards, but focus on making a higher payment on one card every month until that card is paid down, then move on to the next.
A better way; always pay more than the minimum amount due on the card. That helps to raise your score dramatically over time.

Answer 9

What will improve my debt situation? Getting rid of my debt, or getting myself some more debt? But what if it is high interest debt that I'm adding that will be more difficult to pay off and will likely lead to a LOWER credit score?

Obviously pay down your debt.

Answer 10

Pay off your debts. And pay them on time.

You could ask a friend or relative with excellent credit to add you as an AUTHORIZED user on their credit card WITHOUT actually giving you the card. It will raise your score and not affect theirs in any way.

I did this for my brother after Hurricane Katrina and it raised his.

My Transunion score is 812.

Best wishes,

pup

Answer 11

you should pay off your old debt. Getting a new credit card, even if you do not use it, will hurt your score if you are already behind becasue it will be assumed you will not be able to pay on the new card if you do use it.