What should I do to improve my credit score?

Question

Here are the exact circumstances:

Everything is current and payments have been on time for more than two years.

I have one car loan with a balance of around 12K.

I have one CC with a balance of 4K (maxed out) and another one with a balance of 1K (maxed out).

I have 5 "derogatory accounts" on my report (they were 30 days or more overdue at one point in time), but are either paid off or current.

I have no collection accounts or public records.

I've already paid off 2 car loans.

My credit score is 590.

I want to get it to at least 680 within the next 3-6 months.

Is that even possible and what should I do???

Net income (income after taxes) is about 10K a month (it's only been like this for about 2.5 months).

To anyone who spams YA with "you are not a FICO score" or "credit is evil", please spare me.

ELLTEA - you didn't read the whole question. the late payments happened over 2 years ago. the income started a few months ago.

Answer 1

Your maxed out credit cards are probably your biggest blemish. You should absolutely use no more than half your credit limit on a card, even just a tenth.

Two may be too few credit cards to have. Three to four is optimal. Maybe find a good balance transfer deal and spread your balances out. Of course the inquiries necessary to get those cards will dock you a little temporarily, and you need to be eligible for the increase in credit, which you may not be with a 590 score. Or, if you're able to pay off the loans, do so (though I assume if you could, you would have already).

Some places when you get your score will give you the top reasons why your score is not higher. That may help you.

But if you have income of 10k a month I'm wondering what you could possibly need credit for! Are you buying a mansion in San Francisco? Or did you mean 10k a year?

Answer 2

Any credit card that is over 50% of the available credit line should be paid down to under half of your total credit line. Your credit score is lowered when your available balance is over 50% of your total credit line.

Answer 3

Pay off the credit cards and continue to pay them in full every month. Part of your score is based on your debt to credit line ratio. Those maxed out cards are killing your score.

Paying your credit cards in full every month should result in increased credit limits which will also help increase your score.

Answer 4

lets get this right you owe a total of 17K an you make 10K a month an had late payments on 5 accounts, well it dont make any sense to me payoff your bills