I need help repairing my credit - Where do I begin??

[Anonymous]

To start off - I am new to this forum and need all the help I can get at repairing my credit score. Almost 2 years ago I fell behind on paying my credit card which got maxed out at $5500 - About 10 months ago I was able to charge the account off paying $4000 in total. At the same time I paid off both of my car loans, 1 which had 12 months left and a balance of $2000 and the other that had 36 months and $3500. I have no credit cards at this point, no revovling credit and no loans. I rent and have been at the same place for over 5 years. I ran the my Fico scores today with Equifax 613, Transunion 600 and Experian 608. Which is a plus as back in May my overall score was 590. I am really wanting to buy a house but I was declined back in May because my score was to low. I need  help on how to improve it but don't know where to begin.

Please help. Thanks

[jsucool76]

Welcome to the Forums! 

When you say you ran the myfico scores, did you get them from here? because experian no longer sells their scores anymore, so the only ones you can buy are EQ and TU. I just wanna make sure you got REAL ficos first, and if you got EQ and TU here you're on the right track. 

If you have any extra cash, I would suggest opening up a secured card with cap1 (or if you happen to bank with a bank that offers a (decent) secured card, go for them. Cap1 won't graduate, but it has a reasonable AF and reports as a non-secured card. You'll be able to add more money to it as you go on too, so you're not stuck with a low credit limit if you don't have too much to put down right now. 

Secured cards are the best tool in a rebuilders arsenal because most people have no trouble getting approved for one, and if you treat them right they can really help your scores!

Good Luck!!

[Anonymous]

That's great that you were able to pay off all of your debt, but you may be doing more harm than good.  You need a reasonable credit to debt ratio in order to keep a good credit score and build a positive credit history.  Most people think paying every single loan and credit card off at one time is a good thing.  But the proper way to use credit is to actually use it but not more than what you can afford to pay off monthly.  So say your credit card has a line of $5000.  You should be using $1000-$2500 or so of that line a month and then PAY IT OFF!!  Every month.  Having more than one credit card is great because you can rotate them and always have a credit to debt ratio going---but not such a huge ratio that you can't pay it off every month. 

I agree with one commentor who said to get a secure credit card.  You can put an affordable credit line on it (one that you know you can afford to pay off each month) and use it to your advantage to build your credit.

I also advise getting your free credit reports each year from each of the 3 bureaus so you can keep an eye on your credit and that it's not being used by someone other than you.  The bureaus have some reputable credit monitoring services as well or you can go solo and invest in one that's independent like Identity Guard.  These services make sure that you're protected from having your identity stolen and ruining all the hard work you've done building your credit up.