Credit score increase?

Question

I want to increase my credit score, but am confused as to how it works. I have 2 judgments against me when I used to live in another state. I have collections, mostly medical. I have 2 credit cards that have been charged off. I have no open lines of credit except student loans. Should I pay the charged off amounts, or forget about them and get 2 secured credit cards to increase my score. What should be my 1st step?

Answer 1

You need to consider how old are these derogatory accounts?

Are they nearing the 7-year drop off date? If so why pay them, simply wait and they will drop off your credit report on their own.

The other thing you need to consider is the statute of limitations on your debt. I have posted a link so you can look your State up. Credit cards are considered open accounts.

If the S.O.L. has passed, there really is nothing anyone can do. They can still sue you but all you have to do is show the court that the S.O.L. has expired and the case will be dismissed.

And for the record, judgments stay on your credit report for 7-years on until the S.O.L. has expired whichever is longer.

Some people that answer these questions must work for collection companies.

Anyway, the secured credit card idea is a good one, just use them for everyday things, be careful never to exceed 30% of your balance and pay them off in full before the due date. After 12-months of doing this you will be able to get decent credit cards and be well on your way to re-establishing your credit.



http://www.bcsalliance.com/index.html

Answer 2

Deal with the judgments first. They are good for 10 years and can b renewed. They are not going away.

Then start settling your other bad debt. Start with the newest ones and work back. Depending how old, you may be able to settle for less than the full amount -- the older the debt, the less the settlement. But don't expect to drag out the setttlement in small payments. Lump sum gets the best settlements.

Once you've cleaned up all the negatives, you can get a secured credit card. Only charge what you can pay off each month. After establishing a on time payment history,you can appy for a regular credit card.

Answer 3

Repairing the credit score is not that difficult provided you take these 5 simple steps into consideration.

1. Check your credit report regularly

This is a must to ensure that you know your current credit score, and what is ailing it. If there are any inconsistencies in your credit report get them corrected. Keeping bills of all the transactions you make can be very handy and helpful in correcting any errors in your credit report.

2. Get rid of those extra credit cards

The temptations to own a new credit card are so numerous in modern times that many of us end up with a purse-full of them without any real need. They stay there and cause a lot of problems in repayment. The confusion that comes with too many credit cards can easy lead to a missed payment and resulting penalties. Frequent defaults will reflect poorly on your credit score. So, keep only the necessary and discard the rest.

3. Repay on time

Every credit card transaction is a loan that has to be repaid on time with interest. Don't ever miss out on any repayment. If you are not able to make full payments, make half, or even the monthly minimum, but don't default. This will keep you in the good books of credit card company and help your credit score. If you are not able to pay anything to the credit card company, don't shy away from them, call them, explain your problem and work out things so that a negative report doesn't land up with the credit reporting agencies. Read more from: http://www.credit-card-gallery.com/article/239,Credit_score_repair_in_5_simple_steps

Answer 4

Paying charged off accounts only marginally improves the score, the deal is to get the entire negative tradeline deleted from your credit report. If the cc has been sold to a collections agency even better because they are more likely to agree a pay for delete agreement than the original creditor would.

Remember the more recent the trade line the more impact it has on your score. I have no information about the durations of judgements and how that works but here is a link that actually got reffered to me on this site.

www.creditinfocenter.com

Honestly this is the one stop shop for all and any of your credit problems. If you dont feel like churning through the site you can sign up to participate in their forums(trust me they are helpful). For example yesterday i was reading about secured loans to build credit and you can set up the loans such that instead of paying interest, you gain interest(dont be too excited its not usually more than 1% but it beats the hell out of paying 18% on a subprime card) while building credit.

Answer 5

You need to clear up ALL the negative information before you should even THINK about applying for credit agiain.

Start with your smallest debt, and work up from there. Get a second job, eat nothing but rice and beans, no eating out, no going out, get on a serious debt reduction plan and pay your stuff off.

Answer 6

Find very useful info and tips on getting and managing credit cards on http://creditcardmanager.credithelperhome.com

Answer 7

pay the two charged off cedit cards!!!