Credit Score?

Question

My credit score is 515 because of maxed out credit cards. I'm trying to pay them off. Any good ideas on how to raise my credit score after I'm out of debt? Any ideas how of get out of debt?

I'm 23 now will be 24 next year. My parents let me get a credit card at 16/17 and never explained it to me. I want to buy a house when I'm 30 years old.

Answer 1

Put yourself on a strict budget. Get rid of all the extras -- cell phone, eating out, new clothes, premium cable and internet. Take every penny you can squeeze out of that budget and put if on the highest interest rate credit card, while making minimum payments on the rest. When the highest interest rate credit card is paid off, move to the next one till they are all paid in full.

You might consider other sources for cash -- garage sale, collect alum cans, get a second job.

When you finally get all those credit cards paid off, only charge what you can afford to pay in full evey month. Just keeping your credit card balances at less than 30% of your available limit will make a big increase in your score.

Answer 2

Never miss a payment. You'll never pay them off if you make only the minimum payment. Pay as much as you can afford each month. Pay off the higher interest debt first. (Stop buying on credit.) Also, every time you apply for credit, it lowers your score a few points. When you've paid everything off take out a personal loan for $500 and pay it back within 60 days. That will help build your score back up. Good luck!

BTW, there is no credit reporting before the age of 18 and you are not legally required to pay back debt incurred before that age. But you have to raise this issue shortly after you turn 18 (or the age of majority in your state). It's too late for you now.

Answer 3

If you pay all of your bills ontime and reduce your debt, you should be able to raise your credit score. You can visit freecreditreport.com once a year to find out what your creditors are saying about you. As far as I know it is the only site out there that is legit and free. It will not however compute your score for free. Since you already know your score, it would be a waste of money to pay to find out your score.

To lower your debt, you should stop using your credit cards all together until you get them all paid off in full. To pay it off you could try the following:
1. Until you get your debt paid off, pay for everything without using your credit card. If you do not have enough cash, do not buy it.

2. Commit yourself to pay off a certain dollar amount on each card every month. If you only pay the minimum you will never pay it off. Make sure you pay enough to cover the interest charges plus part of your balance everytime you make a payment.

3. If you get a tax refund or bonus, put the entire amount towards your credit cards.

If your interest rates are outrageous you could try one of the following. Make sure you are still doing everything in your power to payoff your debt.

1. If you own a home, you could contact your mortgage lender to find out if they can offer you a home equity loan. You can use it to pay off all of your cards. Usually the rates on these types of loans are close to the prime rate.

2. Many credit card companies run special rates on balance transfers. Some will even give you a year at a really low rate. If you take this route, transfer your balances and close your old cards. Do not make a habit of this, but use this as a one time solution.

3. You could call your credit card companies and see if they are willing to negotiate on your current interest rates.

Good luck!

Answer 4

Credit score is only necessary if you plan to increase the credit that already have available. What are you planning on buying after you pay off your credit cards that will put you right back into debt again?

Answer 5

Spend less than you make.

Your I love debt score(credit score) is driven by a couple things.

Payment history, length of credit history, percentage of revolving debt that is being used.

Answer 6

BEfore you worry about how to increase your credit score, please be honest with yourself and try to figure out how you were able to MAX out all of your cards....was it an emergency (no brakes on the car, water heater went out) or was it lack of responsibility (I need to go to vegas, I need those jeans, I cant live without a new HD TV)
Until you seperate your needs from you wants
you will never get completely out of debt

Answer 7

your credit score sucks. that's about the lowest Ive heard. and I've been in mortgage banking for 14 years. i would suggest pay it off, ON TIME, and leave it alone. no more credit till your old enough to know what it is.
don't feel bad, your parents should have taught you this. its kind of like the "sex talk" that no one gets until it's to late.