I have a 500 score and am now stable enough to rebuild. What steps can i take? I'd appreciate help from anyone that knows what they're talking about. Thank you so much.
2007-08-06 12:45:40 · 5 answers · asked by robert a 1 in Business & Finance ➔ Credit
Make sure you start paying ALL your bills on time. If your expenses exceed your income, find ways to reduce expenses or consider getting a part time job, or find ways to make extra money. If you do this, then as time passes, your credit score will gradually rise to a reasonable level.
It takes about 7 years for negative items to disappear from your credit report. But as time passes, those items affect you less and less, raising your score. 7 years may seem like a long time, but if you can maintain a nearly flawless record for that amount of time, you'll be set. Heck, even after two or three years, you'll be able to qualify for much more than you do now.
2007-08-06 12:59:05 · answer #1 · answered by SoulDawg 4 UGA 6 · 0⤊ 0⤋
Only one thing will build up your credit score, and that is paying off an obligation over time.
While it is always a smart financial move to pay cash, or pay off your credit cards in full as soon as you get your statement, that actually does not make your credit score go up.
A car loan, or a mortgage is a HUGE boost to your credit score, because typically people cannot pay that obligation off in full the first month, and you demonstrate creditworthiness by paying some every month.
As to the time required, well my credit score is in the high 700s. It would be in the 800s, but I have not had credit for a long enough time. (BTW, I got my first credit card 23 years ago)
If you choose to pay off your credit cards in full every month, it will not have a tremendous impact on your credit score. What I have recommended in that past is to take several months to pay off a credit card debt. If you need something, take 3-5 months to pay it off. The interest will not be terrible, a few dollars.
Money is a tool that you can use to build the things you need and want, and like all tools, there is a cost associated with purchasing and using them. In this situation, you might incur some interest expenses, but the boost to your credit rating will pay off in the end.
Best of luck
2007-08-06 20:01:04 · answer #2 · answered by cbmttek 5 · 0⤊ 1⤋
You can take your next income tax return and place it in a certificate of deposit and then take a loan against it. Make the payments (you can only borrow 80%) dont pay it right off, creditors want to see that you making payments. This is one way you can astablish credit. Once you have some, dont go hog wile opening credit cards. Just one or two. Charge something small and make a few payments on it. Paying interest in the begining is good when your trying to rebuild. Also have a checking account and saving account.
2007-08-06 19:51:12 · answer #3 · answered by M v 4 · 0⤊ 1⤋
BEFORE you undertake to rebuild your credit score, go to:
DaveRamsey.com
Mr. Ramsey is a multi-millionaire with a WORSE than 500 credit score. He advocates doing what Americans did for decades, which is ...
Are you ready for this?
It sounds crazy, I know ...
SAVING until they can afford the item then paying for it with cash. Gasp!
See his website, seriously. Check out his books. You'll be FAR better off financially following Dave's advice than pursuing some arbitrary credit score.
2007-08-06 19:51:22 · answer #4 · answered by Just_One_Man's_Opinion 5 · 1⤊ 0⤋
i was in a lot of debt and I my credit score was poor but I recently joined a program that raised my credit score by 159 points. i still have a ways to go to have excellent credit but I'm sure not where i use to be thank goodness I have more information posted on my blog go to
work4ufromhome.blogspot.com
and look under the post Things that have helped me along the way
2007-08-06 19:53:37 · answer #5 · answered by Anonymous · 0⤊ 1⤋