i have a credit score around 511and lots collections how can i improve my score i have two credit cards in?

Question

good standing two two month old.

Answer 1

Don't spend too much. Use a credit card on a 10$ value and pay it off on time! Keep doing that for like 3 to 4 months and your score will increase.

Answer 2

If I'm reading this correctly, you have two credit cards and a lot of debts that have gone to collection agencies?

Changing your credit score will not happen overnight. You will have to make a plan and stick to it. It has taken me years to get my credit score back up, about 6 years actually.

I would suggest that you educate yourself on how the credit reporting companies determine your credit score. There are two measures they use, your CREDIT SCORE and your FICO score.
These are what other companies, like a department store, looks at before giving you a store card.

The two main credit reporting companies in Canada are EQUIFAX and TRANSUNION. You can go to their websites and get a lot of information about credit scores. There is a third company in the States but I don't recall what it is called.

You may have heard about the 6 year rule (7 in some cases). This is where, 6 years after the incident, the information is taken off your credit report. For example, if you've paid a bill late and have an R3 on your report. The important thing to remember is that, IF YOU KEEP PAYNG BILLS LATE, THEY WILL KEEP REPORTING IT. So, the bills paid late in 1999 are no longer on your report, but all the late payments from 2000-20006 are still on your report.

This is where a long-term plan comes in. I would realistically aim for 6 years. I know it sounds like a long time but, 6 years will pass by whether you set up a financial plan or not. In six years, you can be six years older and have a good credit score, or you can be six years older and still be in the same position you are now.

If you need help coming up with a plan, look in the phone book for DEBT COUNCILING services. Most major cities usually have organizations that offer this service for free. They will be able to help you with the details.

The books you read on this will tell you to cut your living expenses, which is true, however, everyone's life is different, what is a cost-cutting measure for me may not be practical for you. I don't own a car, maybe you need one for work.

I hope this is helpful and gets you headed in the right direction.

Answer 3

You have to pay off the collection accounts while using the cards simultaneously. Don't max out your credit cards, and pay on time, DO NOT MISS A PAYMENT.

1. Make a schedule to pay off collections.
2. Call each company according to your schedule; see what the options are; some cards allow you to settle for a percentage of the balance and still report as paid in full.
3. Use the credit that you have regularly, but sparingly and make payments on time. If you carry a small balance this actually helps your credit score.
4. Also dispute anything on your credit that doesn't look right.

Answer 4

The biggest factors in credit score are paying on time, debt as a percent of total credit limit, and age of accounts. You should also not have more than 2 credit cards. Having department store credit cards hurts your credit score.

Note: Opening up more accounts will decrease your debt as a percent of total credit limit, but will severely decrease the average age of your accounts.

It is becoming more and more important to have a good credit score. The latest trend is in the insurance industry, where most companies will charge you more , and rightfully so, if you have a bad credit score.

Intuitively, this makes sense: if you can't pay your bills on time then you probably aren't too responsible with your belongings (car or house) either.

Many argue, that this is discrimination against the poor, because poor people tend to have bad credit, but every company's statistical analysis proves that those with bad credit do have more claims! I highly doubt being poor causes car accidents.

Answer 5

Cut up your credit cards, all of them, and throw them away. They are evil ! When you need to purchase something use your check card /debit card from your checking account (no interest rates), or save up the money for it.

Don't purchase on impulse. Americans are brainwashed into believing that when best buy has a sale on a cool new digital camera, or the latest MP3 player, we HAVE to have it. This is BS. Only buy what you absolutely need to survive. Write up a very strict budget and stick to it. Put any extra money you have at the end of the month toward paying the unsecured credit card balance down, then when you pay that off, put that extra money into a savings account, or into an investment account, like a 401K, or an IRA. Social security will probably go away soon, so you are going to need as much money as possible from your retirement accounts.

When you pay off the balance, report it to equifax, and they will take it off of your credit report. If the account is in collections, that will make your credit score lower, which turns out to be a trap, because then you are only eligible for higher interest rates, which usually causes most people to get sunk deeper into debt.

Do anything it takes to pay off any outstanding, unsecured debt as soon as possible, even if you have to work two jobs, and when you do pay it all off, don't get any more credit cards, EVER !!!! Credit card companies want one thing, and one thing only, YOUR SOUL !

Answer 6

1) Pay some if not all the collections in full.
2) Once you start getting car loans and such it will really go up.
3) Don't get too many credit cards.
4) Time. Keep being responsible with those 2 cards and you'll notice in about 6 months, your score will improve.

Answer 7

First pay off all the collections.

You have to use in a small way whatever credit you can still get. So buy a couple of small things with your card and pay it off. It wouldn't even hurt to make a payment that isn't the full amount (that actually helps your score) as long as you aren't late. You will be able to get a car loan in the near future, if (and only if) you need a car that will help, so you should do the loan even if you don't need it.

Answer 8

I know that if you happen to apply for a lot of credit cards, just to see what you can get, that that affects your credit score. Pay everything on time--I have everything automatically deducted from my bank account so I"m not late. Finally, don't live beyond your means. There are professionals out there who can help you a) consolidate your debt and b) figure out how to get your budget in order. Good luck!

Answer 9

There are lots of ways to accomplish what you want but only 1 best way. If you have lots of time and persistence, you can take a stab at it yourself. I believe, however, that your credit is at least on the same level of importance as taxes (which most people have professionally completed). I know of a non-profit company that does all the leg work for you and hopes to improve your score 90 points in 90 days.