Ok, I have tons of questions regarding my credit..
1. I currently have a low credit score of 632…I would like to first know what is the best way to increase this score?
2. I do have an item in collection that is ,068.00 and I am in the process of paying this off… after this is paid off, does anyone know what my credit score will be after that, for example will this increase or decrease my score?
3. Also, I have heard that collections stay on credit reports for up to seven years?? Is this correct or is there a way that after a collection is paid off, it can immediately be removed from your credit report?
4. After my credit has been paid off I would like to apply for 2 credit cards.. not to get in debt..I would like to have very low credit limit and use these just as a means to increase my credit score- is this a smart move??
5. I also have student loans that are on my credit report, however these are consolidated, will this hurt my credit??
Qusetion 1 see question 2 & 4.
Question 2 payy off as soon as possible.
Question 3 No ther is no way to remove collections except time. 7-years is correct.
Question 4 very good idea as long as you pay them in full and on time every month.
Question 5 no.
pay of the collection fast and dont apply for too many credit cards cuz then it will make it more worse on your credit score. i went from no credit to excellent credit with 3 different car loans
I can definitely answer question # 2 for you. I learned from a collection representative that if you pay off the amount in full and it is paid off then your credit score will increase from 75 to 100 points. But if you go for the settlement that is offered and you pay it off then the score will go up 45 to 75 points. Hope that helps you!!!
First, Pay off your debt ASAP. Ask for payoff letter from the company for your records.
Second, Report payoff to Credit Reporting Agenicies. Follow up with in a month.
Third, Collections do stay on your credit for 7 yrs. Bankraptsies for 10yrs.
Fourth, Get a secured loan at the bank. for amount at $2000-$3000. Pay off in 6 month. If you don’t have cash to deposit at the bank for CD, apply for secured credit card or just a Department Store credit card.Or just buy used car or any car if you need one.Open 2 more credit cards and maintain balance at least 1/3 of the limit.
As long as you pay your student loans you’re fine.
Good Luck.
Opt for a debt consolidation loan: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.
Use unsecured loans: If the equity in your home is not adequate or you do not own a home, go for an unsecured personal loan. These loans are more difficult to get, but once you are approved, you will benefit from the lower rate of interest with this type of consolidation loan.
Minimize the loan period: Nobody wants to spend their major part of life paying off the debt. Hence try to reduce the total debt. If you cannot, consolidate your loans. This is one of the ways of developing financial security. The other part of financial security is to handle your finances responsibly. Reduce the total amount of debt, pay more than the minimum each month and reduce the loan period are the best ways to get out of debt quickly.