Credit Problems: Credit score question?

Question

My credit is terrible all of a sudden because I did not repay my student loans in time because I was still IN SCHOOL. So now I have a poor rating, a delinquincy on that and on another credit card which was brought to a collection company and am now paying them every month and will be gone in 8 months. I have 8 open credit card accounts and my student loans are now on forbearance. 4 cards are paid off and I was thinking about paying in full the rest of the amount owed on all four cards which equals about $4,000. How long will it take for my score to start going up if I payed it off today, had no debt whatsoever(besides my car) and closed 5 of my newer credit card accounts?

Answer 1

Well, creditors look for open lines of credit with a history. 12- 24 months usually. I suggest paying off what you can in collections.
Keep three lines of credit open. Keep them undoer 30% of the credit limit. This should raise your score in the next 30-60 days.

Answer 2

Generally, you get and maintain good credit by using credit responsibly - using it in moderation and paying it off as promised. Closing some newer accounts may help, but older account probably should be left open.

It will probably take about 2-3 years before your credit is good - after about that long, your negative items will still appear on your credit report but will be given much less weight than your more recent good credit behaviors.

By the way, just paying off everything and never using credit doesn't equal good credit.

Your student loan bit makes no sense because student loans are not repayable while you're in school - so you either screwed up or were attending some kind of iffy school that didn't count. Or there are facts not mentioned that make this make sense somehow.

Student loans are about the easiest creditors to deal with - if you can't pay, call them up, tell them you're in school, you have no money, whatever, they'll work something out. You didn't do that, it seems, until too late, and are now paying the price.

Answer 3

Don't close any accounts, just don't use them. The experts say that this shows a higher percentage of your outstanding loan balances on fewer credit cards. So that if you have $10,000 in debt on 10 cards, that is $1,000 per card. Not a bad as $10,000 on 5 cards with $2,000 per card.

Shred the cards you are not going to use. Pay off that which you can afford to pay off, and have something for emergencies. Or pay them off and use for the cards for emergencies.

Your scores will rise probably in 3 months to a year. Depends on how often the cards report to the credit bureaus.

It is also better to have a record on the cards that you have paid off showing no balances. If you close them, then it's the same difference in your pocket, but that doesn't show up on a credit report.

Answer 4

Normally closing cards lowers the score because it lowers your available credit making the
debt / available credit ratio worse .

But you have a complex situation ,
So visit a credit counselor to find real answers .
Maybe your credit union can refer you to one ?

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Answer 5

in case you have collections the likelyhood of having a C/C isn't stable. My propose is to pay your expenses ON TIME!!!! and supply it time. It ususally takes 7 years for products like collections to flow away.