How can I improve my credit score??

Question

I have several medical accounts on my cresit report. I have always heard that medical bills do not hurt your credit. I am attempting to pay these off. I have paid off several of the smaller accounts. These still remain on my credit, they are now listed as closed. My question is...What can I do to raise my score. I have really been trying but my score actually has not gotten any better. Why? Also, is it better to pay the biggest account first, or send small payments to all accounts??

Answer 1

I work at a credit reporting agency. First things first: Here are the things that negitively impact your credit score:
1. Collections, Charge off's, Foreclosures, Tax Liens and/or Judgements
2. Deliquent Accounts and Late Dates
3. Any balance on a revolving credit account (revolving accounts are things like Credit cards, charge accounts) that have balances of 50% or more of the high credit limit.
4. Inquiries

Note: Medical collections do impact your score slightly but not very much. If the medical collection has been turned into a judgement, the judgement will impact your score a great deal)

I see about 50-100 credit reports a day and the people with the highest score ususally have 4-5 accounts. One or two being installment loans like a car or mortagge and 2-3 revolving accounts that have low balances. In order to get a good score you need to have current good standing accounts so people who adv you to pay off all credit cards and never use them are COMPLETELY WRONG!! Its always good to have a credit card with small limit and keep the balance below 50% of that limit and pay off every month.

Tips for cleaning up credit:
1. Pay all collections, Charge off's, judgements (I would pay one off at a time instead of sending payments. Collections dont show late dates and dont show when your last payment was made. Its not the balance on the collection that effects you its the collection its self.
2. Get all credit card balances under 50% of the high credit limit (start with credit cards that are overlimit). Close the ones you dont use or dont need. Do keep at least 1 or two cards open but keep the balances low and try to pay off each month.
3. Call the credit bureaus to put in disputes on all accounts once they are paid. Some collectors will not report it is as paid.
Experian: 800-831-5614 Equifax: 800-685-1111 Transunion: 800-916-8800.

Accounts will stay on your credit for 10 years as of the last date of activity. Make sure that ALL accounts are reporting right. All the accounts that are closed should show Account Closed and all balances should be correct. If they arent, contact the Bureaus above to correct. Inquiries effect the score slightly and will stay on for 2 years. Dont just randomly apply for credit at places.

The score model used to determine scores is different for what your applying for credit. A mortgage score is the most strict and will always be lower than your consumer score. A consumer score is the score you get when you pull your own credit. A ghreat site for free credit reports is www.freeannualcreditreport.com. You get one free credit report from each bureau a year. After that, I would use the Bureaus websites to pull and manage your credit. Its usually cheaper than any other site.

Hope this helped some. Good Luck and Congrats on taking the first steps to get your credit back up!!!

In reference to what Erika said: Its true to some degree. Usually only account reporting within the last 2 years effect your score. Not the opened date but the date last reported.

What I would do: Make two columns on a piece of paper. In one column list your accounts that have reported within the last 2 years (this date will show up on all credit reports) starting with collections, then credit cards that have balances more than 50% of limit. In the second column list all accounts that havent reported since 03. Take care of the first list then start with the second list.

One more thing: You have to have good credit to outweigh the bad credit. If all you have is collections then your score wont get any better as you pay them off. You need to get a small credit card to build some good credit to really improve your score.

Personally, I hate the scoring system the bureaus use. I see people everyday that have good credit but low scores. Unfortunatly, your score can mean the difference between having a mortgage payment of 1,000 a month or 2,000 a month.

Answer 2

Amanda, the math says to pay off the bigg bills first. have you ever tried to eat an elephant? No, well start small with a chicken so you can win.
No body runs a marathon their first day week or even month and wins . Start with the smallest first pay it off while making min pay on others.
it will feel good! now second smallest and do the same.
as for the 'I LOVE debt slavery score' read 'the millionaire next door' and visit daveramsey.com to learn what the banks hope you never learn. Debt is Slavery.
the CON job you are getting is debt is needed -BS.
get 2 more jobs, pay off your bills, save up real money, invest in your future not the credit slave masters.

Answer 3

From what I have heard recently, it is not possible to improve your credit SCORE by paying off old debt--though it may improve your chances of getting new credit if the creditors actually look at the contents of the report and not just the score. The best way to improve your score is to pay your bills on time and just wait it out--time eventually heals all wounds, even those on a credit report.

Good luck!

Answer 4

It is always better to pay off the larger balances first. If they look at your account and see that you owe $9,000 , it is a lot worse than seeing a $2,500 balance. Make sure you always pay on time, and always more than the minimum payment!

Answer 5

Step-by-Step Credit Repair Guide to inprove credit score
http://www.debt-loan-refinance-mortgage-credit.com/category/Step-by-Step-Credit-Repair-Guide.html

Answer 6

Visit the credit repair guys at www.720ficoscore.com they can have things removed and offer you options that you might otherwise pass up.

Answer 7

Good info on improving scores, http://www.choicefinance.net/improve_credit.htm