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My credit score is 578, I want to raise it... a few questions.. HELP!?
Sadly, it takes FOREVER to get bad things removed from credit reports, and I learned this the hard way. I have a repo, a few charge-offs, etc. I was accepted for a car loan last year and have been paying it on time, and have a couple other small accounts that I'm paying on time, and this has made my score go up a little.
I owe about 6-8 thousand dollars to different random places. (I was stupid in college and paid tuition on credit cards and couldnt afford to be living the way I did.)
I only have about 200-300 a month I can put toward past debt, and I just don't know where to start or even how to get in touch with the places I owe money to. Do I pay off my repo first, my old credit card first, a little to each place, etc? Also, I had bad advice a few years ago and closed some credit card accounts after I paid them off instead of keeping them open, and this looks bad too. Is there a way to get this off my credit report?
It also said that the fact that I don't have an open major credit card is hurting my score too. Should I try to get one and just cut it up? Is it even possible to get a major credit card with a low score like 578? And if so, how do I do it?
I have so many questions. I have been misinformed many times... help me please. I know employers look at credit scores, and I don't want mine affecting potential jobs in a negative way. Its so embarrasing.
Well first of all, stop listening to those who gave you bad advice.
Here is a link to the FTC that will explain to you how to get out of debt and improve your credit at no cost to you. You will get the right answers there.
You can also learn more about how FICO works at this site
I can give you some quick answers. How old are those old debts? you just might want to wait for them to drop from your credit report. This will happen 7 1/2 years from date of last missed payment in accordance with Running of Reporting Period - Section 605 [15 U.S.C. § 1681c]
This does NOT apply to judgments though only credit card debts and repo's.
If they are fairly new debts, try and work out a payment plan to get those back on track and keep them current. Pay more to the one with the highest APR first.
Those closed accounts have less of an affect then the delinquent ones. Creditors give less weight to old accounts closed by the creditor.
Remember, only time will raise your score and if you do get another credit card (whether it is secured of revolving) never use more then 30% of your credit limit and if you can't pay it off in full, pay what you can to keep it under 30% of your debt utilization.
Source(s):5 years ago
What you need to start with is called a secured credit card. Because your score is low, you won't qualify as a regular applicant. Apply with Capital One for a few hundred and just use it sparingly for real things ie) groceries, gas, etc... and pay in FULL and on TIME, this will start up a positive repayment history.
You want to start attacking which ever debt has the highest interest rate. The repo, do you still have a balance even though they took back the car? If you have credit cards with small balances, say less than $500, just pay them off and get them out of the way. Do NOT close the accounts, you need the length of the account history to boost your score. You need to negotiate a repayment plan with your auto lender, that's killing your score big time. Stick to it and be transparent with them.
As long as the repo is on your credit reports, it's unlikely a bank would give a secured credit card. A credit score changes about every 12 months. If you made 12 months on time, that should help boost your credit. You can run your free online credit reports from annualcreditreport.co for all 3 credit agencies or you can call Trans Union toll free @ 1-877-322-8228 for all 3 free reports. You should receive them within 2 to 3 weeks. If you despite the delinquent accounts, they have 30 days to respond or it comes off
Source(s)by stan c - 5 years ago