Better Credit Score?

Question

How would I go about getting my credit score up? Ten years ago I used Consumers Credit Counseling to help pay off my credit card debit. It was HIGH. I paid it off in 2 years. I still have ramifications from that period in my life, even though I paid it off. I didn't file bankrupty ,as a car dealer told meI would have been better off doing. How long can this haunt me.? I have 3 credit cards all with below 700$ limits and one car loan. I am never late and if I use the credit card I pay it off when the bill arrives, but still the past haunts me. HELP!!!

Answer 1

The credit score – as mysterious as a gypsy palm reading? Kind of, yea. Sometimes I’m surprised that some credit scores are better than it appears they should be and others are worse. Why? I have no idea. This system is not perfect and nobody knows exactly how it works (strange but true). I have a lot of information on this topic for you, so I’m going to split it up into two articles. The first will address how credit scores are derived, what affects them and the range of scores from good to bad. The second article will cover steps to take to improve a poor credit score.

There are some key factors that are used in determining your basic score;

1) Your payment histories – recent late payments hurt a lot. The older a late payment is the less impact on your score.

2) Number of accounts that have balances. If you have a dozen charge cards with balances consolidate them down to 3 or 4. There is no reason to have Macy’s, Nordstrom, GAP, Sears, Kohl’s, Mervyns, etc and owe $89 to each of them! Use your Visa card – they all take it!

3) Proportion of balances to credit limit. This means don’t max out your credit cards. When your credit cards are at there limit it is a big red flag. It’s best to never use more than half of the available balance on a charge card.

4) Length of time accounts have been opened. Old accounts with long payment histories are really great for a credit score. This is the reason why you should NOT close charge accounts that you are not using. Just shred the card and stop using it. This way the account remains active and continues to have a positive impact on your score.

5) Credit inquiries. An inquiry shows up when someone checks your credit report. Lot’s of inquiries indicate you may be trying to open a lot of new credit which is a red flag. If you get a new credit card every six months to get the low intro rate your credit score will suffer because of constant inquiries and the number of accounts which have been opened in the recent past.

6) Collection Accounts and Public Records. If you owe a creditor and you’re not paying they will send the account to a collection agency. This shows up on your credit report – bad. When you get a bill from the doctor’s office that your insurance did not cover do yourself a favor and pay it. Then you can try to get the insurance to reimburse you if they were wrong. Otherwise the doctor’s office will waste no time going to collection. Medical collection accounts are so common it’s ridiculous. Public records include Judgments, Tax Liens, Bankruptcy’s, Etc, all bad and should be avoided at all costs to keep your credit score in the positive range.



What is the positive range? Well, credit scores run from 300 (worst) to 850 (best). Generally speaking, anything under 500 is horrible. From 500 to 575 is very bad and 575 to 620 is bad. Then from 620 to 680 is OK and 680 to 720 is good. If you are over 720 you have excellent credit and you’ll get better rates on everything from credit cards to home loans and even insurance! Your credit score influences the cost of many important things in your life and should be taken very seriously. Next time we’ll talk about how to keep your score high or to get it higher.

Answer 2

It sound like you are on the right path. The credit counseling issue should fall off shortly. Do not close the 3 credit cards that you mentioned. Part of the score algorithm is how long an account has been open. The longer you have the cards the better your score will become. You may, in fact, ask for an increase in the credit limit on the cards. In my opinion this will help as well.

Answer 3

Go to AnnualCreditReport.com and get fee copies of your credit report from each credit bureau. Check for errors and dispute them.

Since you paid off all the negatives more than 8 years ago, dispute any that are still showing as being past the 7 year reporting period.

They should all be off your credit report and if you have been paying those current cards in full every month, you credit history should be good.

Answer 4

You need to see what is on your credit reports because something from 10 years ago should not be influencing your credit score now. Those negatives drop off after 7 years from default.

Note they might still be collectible depending on your state's rules and regs but should not show up on the credit report unless you have judgments against you.

Answer 5

It's poor. You will likely have difficulty getting credit under any kind of favourable terms, and are most likely a target by these credit schemes that target people with bad credit.

Answer 6

Each time you apply for credit you use up some of your "points" making your profile look bad.

Decrease the amount of credit related items to go for.

For further advice go to fsa.co.uk you local citizens advice or get back in touch with Consumer Credit Counseling Service for professional help.

Answer 7

Try to pay off all the loans you currently have ASAP so you have zero debts. It's probably going to take a little time but creditors will see that you are making timely payments. If you can maybe get a few loans and use that money to pay them back immediately. That will positively affect your credit.

Answer 8

NOTHING that happened 10 years ago should still be on your credit report that is hurting you.

The ONLY accounts that should be still on your credit report after 10 years are positive accounts.

Get all 3 of your credit reports and review them. Then, begin repairing your credit. But, be careful, read about and learn how to do it before jumping into it.

Answer 9

I help people improve their credit and credit score for a living. It sounds to me, as limited information about you that I have, you are on the right path. (I pray for more customers with your attitude and discipline!) The posted answers about cleaning your credit, on your own, are correct. However, should you like to discuss further what can be done, feel free to email me.

Answer 10

http://www.mioaklandcounty.com/blog/2007/01/26/how-to-get-a-great-credit-score-part-1/