How can i raise my credit score if i have 6 accounts in collections and i am paying on a student loan?
Monday, August 30th, 2010 at
10:33 am
…it seems like going through a debt settlement, or consolidation, or negotiation is something I can do on my own, i’m just not sure if this will raise my credit score if all my accounts are 2 years past due and I have no current open accounts. I can’t even get approved for an unsecured credit card to boost my credit score. Please Help!
Tagged with: accounts • collections • Credit • Loan • paying • raise • score • Student
Filed under: Debt Consolidation Loans Unsecured
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Quit worrying about some arbitrary number. Pay your bills and everything else will fall in line. Of course your score will go up if you pay off delinquent debt. If you don’t, it will continue to go down.
The first thing you want to do is settle those accounts in collections. Credit repair is definitely something you can do on your own. Once you have taken care of old debts, and made sure that your credit report is only showing valid information, you can start building a solid credit history.
I have put a link in the sources section to a web site called CreditInfoCenter.com. If offers all types of great advice on credit. Check it out.
Also, you can actually build a solid credit history without the use of debt. If you are currently paying recurring monthly bills like rent, utilities, cable, Internet, insurance, and cell phone you can create an account at PRBC.com. PRBC is an alternate credit bureau that allows you to build a profile of all your bills. When you are ready you can order a verification ($15-$20 per account) where your payment history is verified. Your good payment history can then be used to build a PRBC credit report, which you can request lenders look at as a sign you pay your bills on time.
Here is how to increase your credit score :
1. Pay your bills on time. Your payment history is a major factor (35% of your FICO score) in determining your credit score. If you pay your bills late, or had an account referred to collections, your credit score will take a major hit.
2. Sign up for online banking and make sure your regular recurring bills are paid automatically. This way you will not forget a payment that will wind up reducing your credit score.
3. Increase your credit limit. Another large factor is the amount of your debt in relation to your credit limit. If you have a card with a $10,000 credit limit and your balance is $9,000, this will not help to improve your score. To make the debt/credit limit ratio look better, you can try to call your credit card company and request an increase in your credit limit. Don’t use the extra credit though! That defeats the whole purpose and puts you further in debt!
4. Don’t apply for many cards at once. This will not improve your credit score because this is a characteristic of high credit risk groups.
It looks like you’ll have to go through debt consolidation as well. Read here further :http://nextcreditera.com/index.php
You can improve your credit score with knowledge, some time, some effort and not a lot of money. Start by learning the credit laws in the United States. The big one that will help you is that credititems. If they can’t prove it’s correct or don’t respond in time, the items must be removed.
Okay what I am giving you is GOLD…
Don’t just over look this read it apply it.
TWO TYPES OF CREDIT FILES
Business and Personal
Basically there are two types of credit files. There is the personal credit file and then there is the business credit file. Your personal credit file is separated from those with the same or similar names by several factors, including a driver’s license number, birth date, or spouse’s name. Although these are three important identifying marks, the number one identifying mark on your credit report is your social security number. Since there is no one else in the United States with your number, your file is easily identified. The chances are very small that the social security office in your area will issue a second number just because somewhere down the road you messed up your credit. However, it is impossible that a second personal file would be created.
The second kind of credit file is the business credit file. Business credit files are identified by the business name and by a computer generated and assigned identification number. Your business file is listed with credit bureaus like Dun and Bradstreet and Stanley and Porous, etc. A Company credit record can be built and used just like a personal one. The idea is to take a hobby or trade that you possess, and start a new small business for which you can create a name and a new credit file. There are hundreds of small businesses that can be run from your home. These small businesses have the potential to generate high part-time or full time earnings. I suggest visiting your nearest bookstore or library to obtain a book on the numerous business opportunities available.
Once you have established a business name and idea your next step is to build a credit history for it. This is done using basically the same techniques that you would use for building your personal credit record. It does not matter how bad your personal credit record is. The business will be judged on its own record. I just recently had a student obtain an American Express card through her small business, which is only nine months old even though her personal record is riddled with bad credit. As you will see, the key is to maintain a stable payment history with all credit accounts. She built her business credit record using the techniques, which follow.
Once you have created a new business and established a name for it, the next step is to obtain a “DBA” (Doing Business As) from your local records building. You will need this D.B.A. to open a business checking and savings account. There is a small fee charged for filing your D.B.A. with the records department. It is in the amount of usually $5.00 to $10.00 dollars. After obtaining your D.B.A. your next step is to apply for a retail sales tax permit. This permit entitles you to two special things. It allows you to collect sales tax on all items you sell and it also allows you to purchase items for resale less the tax. Once they are later resold, you will then collect the tax on them. Does this make sense? Once you have completed these steps you are now ready to begin the credit building process. Follow the steps described in the next three sections using your business in place of building a personal file. Of course, the dollar amounts on the “three bank maneuver” should be as high as possible. Also when obtaining your secured bank credit card again, use as high a deposit as possible. The idea is to work towards the middle four figure area. The bottom would be $4,000.00 and the top would be $7,000.00.
On the credit report there is no distinguishable difference between four thousand and seven thousand, therefore we will use four thousand as the target amount. Thus, why use seven thousand dollars when you can get the same results for four thousand dollars. All of the following steps can be “fast forwarded” to be added to your file within 45 days. For example, when building your personal file you would not want to pay off your three bank loans before a minimum of 90 days. They should also be held for six months. Where as a business loan can be paid off within 30 days and it still looks great on your file. Do not contact the credit bureau to report your credit accounts until you have established at least the three banks and secured a credit card.
Dun & Bradstreet
Business Credit Services (Dun & Bradstreet)
CONTACTING DUN AND BRADSTREET FOR CURRENT INFORMATION
TO OPEN YOUR DUN AND BRADSTREET ACCOUNT, SIMPLY CALL INFORMATION FOR THE OFFICE NEAREST YOU. THEY WILL TAKE ALL YOUR INFORMATION BY PHONE AND GIVE YOU YOUR DUNN NUMBER. THIS IS THE NUMBER YOU USE WHEN APPLYING FOR CREDIT. USE THIS NUMBER IN PLACE OF THE S.S.# BUT MARK “D&B” NEXT TO SOCIAL SECURIT NUMBER, SO THEY WILL KNOW THIS IS BUSINESS RELATED.
Please do not listen to most of the information here. If you have many old collection accounts and pay them off, it will not help your credit score! Unless these accounts are still listed as ‘rev’ then paying them off can only hurt your credit score for the most part. Paying old accounts will re-age them and they will look like they are recent accounts because the dla (date of last activity) will be updated to the month and year you paid off the collection. The only thing that can really help your credit now is time and/or trying to get the collections removed from your credit report.
Hi,
I used “Credit Solution” to settle my debt and improve my credit score.They managed to reduce my debt up to 58%.It’s legitimate.I came across this company on NBC News Special Edition.Check it out here:
http://flingk.com/14iscxm7