My credit score is just above the mid 550’s. I made some mistakes with credit cards, and they have gone to collection companies (6 cards). I am in the process of negotiating each of them down and paying them off, but my score will not go up by this since these accounts were written off. What is the best and quickest way to improve my credit score? Best thing is, my car will be paid off in about 7 payments…
There is no quick way to repair your credit. You need at least 24 months of consistent, on-time payment history to start overcoming those charged off accounts.
If your car payments have been on time, that will help your score but paying off the loan won’t give you any kind of large score increase. Installment loans build your credit as the payments are made.
If you have any current, open credit card accounts, use the card for small purchases and pay in full every month. If you don’t have an opened account, you can try to get a secured account — you pay a deposit which is held as collateral against the line of credit.
Once the cards are written off and you complete your car payments, your score will begin to rise again. Keep at it.
Really there is no quick fix for fixing credit, there are companies that say they can remove all bad credit, but I found out from experience this really doesn’t help. Pay off all your debit, but don’t close the accounts, this will actually hurt you becuase you gain credit from length of cards. Once they are all paid off make small purchases and pay them of entirely. Only purchasing small things that you already ahve mney for, such as gas or grocerys. The best fix for credit is time, so once you have paid off you credit cards your credit will slowly rise. DO NOT APPLY FOR MORE CREDIT! The more times you apply for credit the more your credit score drops, also it drops more when you get declined! If you get it all paid off and jsut wait a year can make a good difference
Credit Repair
From the Source (but please read the whole thing):
The Federal Trade Commission (FTC) says do yourself a favor and save some money, too. Don’t believe these claims:
“Credit problems? No problem!”
“We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”
“We can erase your bad credit — 100% guaranteed.”
“Create a new credit identity — legally.”
they’re very likely signs of a scam. Indeed, attorneys at the nation’s consumer protection agency say they’ve never seen a legitimate credit repair operation making those claims. The fact is there’s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.
No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost.
When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. To calculate the seven-year reporting period, start from the date the event took place. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance.
*** The Credit Repair Organizations Act ***
Credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. And before signing, know that a credit repair company cannot:
– make false claims about their services
– charge you until they have completed the promised services
– perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees.
Before you sign a contract, be sure it specifies:
– the payment terms for services, including the total cost
– a detailed description of the services the company will perform
– how long it will take to achieve the result
– any guarantees the company offer
– the company’s name and business address