Any tips on repairing your credit?

Question

I have damaged credit. I would like to take steps toward repairing it. If I pay all balances how can FURTHER improve my chances of being financed?

Answer 1

Firstly - you should not have been so stupid as to run up your debt.

Secondly - just pay off your bills on time and you should be OK.

Answer 2

First of all stop using credit and start using cash. Pay off any accumulated credit card debts as quickly as you can because unless there are errors on your credit report, they stay there for 7 years so start TODAY to make the present more impressive than the past. A past due bill this month will hurt you more than a past due bill three years ago. Don't cancel your cards... leave the history of credit just make it a better history. The credit scores are based on a number of factors: history, payments on time, credit used to credit available, ratio of credit card debt to installment loan debt, etc. Your credit report is important for many reasons... employment, insurance, housing, interest rates, etc. Start today with a new attitude. Don't worry about future financing. If you can get out of debt and stay out of debt, you'll have a debt proof life for your future. Fifty years ago there were no credit cards and people made it through life. There were no cell phones, cable, designer clothes, fancy sports cars and other consumer goods that people use tomorrow's income on. Live within your means and your credit will repair itself.

Answer 3

Your credit score is based mostly on:

1. Length of credit history
2. Payment history.
3. Ratio of credit used to available credit.
4. Number of credit inquiries you authorized.

If you cancel your card, you'll be hurting your credit ratio. (#3).

You want to deliberately keep your oldest credit card open, even if you never use it.

You want to always pay the minimums of each loan on time every month.

You want to keep your available credit high, but actually only have balances equalinig 25% or less.

You want to keep your credit inquiries to a minimum. Try for no more than 3 or 4 per year for any type of loans.

You do these things and your credit score will quickly soar into the 700s.

Answer 4

Debt consolidation is a great way to help your credit. This allows you to pay one payment per month instead of multiple larger payments per month. If that is not an option for you, try paying more than the minimum balance on all your bills. If you are able to do that you will soon have credit cards paid off. In order to gain good credit, try purchasing something that you have to make payments on; be sure to make all the payments on time.

Answer 5

What kind of balances are you paying? Are they open accounts or collections and charge-offs?

If they are collections and charge-off you need to know what the date of last report was. Accounts that have not reported for 2 years or more are better to be left alone because you will be penalized for paying them off (it will activate the report date to current date) and will drop your scores.

If you have open accounts (revolving) pay them down to 30%.

Adding new credit lines and keeping a minimum balance will help as well improve your scores. In some cases you are better of to focus on the open accounts then the old collections or charge offs.

Answer 6

paying the balances would be great. However I would still use the credit, just pay it off at the end of the month. Credit agencies still like to see you use the credit, responsibly

Answer 7

You are not stupid and debt consolidation is not the way to go either. Many feel that credit repair is a worthwhile service.