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PAID OFF DEBT, NOW WHAT??

Member

PAID OFF DEBT, NOW WHAT??

Hello,

 

I recently (over the past 6 months) have paid off all my debt - by settling accounts that were in collection - I had four credit cards (two major, two store cc) that I was not able to pay and those went into collection and I did the ultimate no-no and ignored them for approximately two/three years :/  

 

I also paid off an old phone bill that was on my report and as far as I know, I have paid off (or "settled in full") all my debts.

 

It has only been about a month since I paid off everything and I have not yet looked at my credit report again (since I already received my free CR this year...) but, the question is.... now what?  How do I re-establish my credit to a good score? I know that just paying off these debts by settling is not going to magically make my credit score better, so what steps do I need to take in order to really fix my credit now?

 

Thanks in advance for your help!

13 REPLIES
Moderator Emeritus

Re: PAID OFF DEBT, NOW WHAT??

Congrats on satisfying all your old debts, but as you said, just paying them doesn't make the baddies go away.  You will need to send GW letters.  I'll put a link below for you to do some research and formulate your gameplan.  Let us know if you need any help.  Good Luck.

 

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/GW-letter-Q-amp-A-Examples-and-GW-Success-Sto...

 

 

 

 

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Member

Re: PAID OFF DEBT, NOW WHAT??

Thank you SO much for that information ! I will get right on those.

 

Would you suggest that I try applying for a secured credit card (for bad credit) to help with re-establishing my credit?

 

In your best estimation, what time-frame am I looking at to really turn my credit back around?

 

Thanks for all your help!!

Moderator Emeritus

Re: PAID OFF DEBT, NOW WHAT??

Yes, I do suggest building new credit while cleaning your CRs.  That's part of the rebuilding process.  As far as how long it takes, YMMV, everyone is different but with hard work you could see significant increases in 6 months to a year.

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Member

Re: PAID OFF DEBT, NOW WHAT??

Great, Thank you.

 

One last question (sorry) but any chance you could point me in the right direction as to which secured credit card(s) would be most suitable?

 

I have been researching this a lot, but I just don't want to get into a bad situation after all this hard work so far... 

 

Any information would be helpful.

 

THANK YOU!

Valued Member

Re: PAID OFF DEBT, NOW WHAT??

Congratuations Seravae!  What a relief it must be to have everything paid off.  Check out the "Finding savings & credity card" section of myFICO.  




Starting Score: TU 500's EQ 560 Summer of 2012
Current Score: Lender pull EQ 625 EX 651 TU 654
Goal Score: 700 Club!


Take the FICO Fitness Challenge
Contributor

Re: PAID OFF DEBT, NOW WHAT??

I will go with capitalone  secured credit card. 

 

Valued Contributor

Re: PAID OFF DEBT, NOW WHAT??

I'd stick with the major banks on a secured card or a local credit union.
Scores: about 700 across the board
Total CL: $275k
Highlighted
Member

Re: PAID OFF DEBT, NOW WHAT??

Just got approved for a Capital One Secured Mastercard Today !!

 

Things are beginning to turn around.... Excited to be going in the right direction finally !! Smiley Happy

 

Thank you all for your help and support, and have a wonderful Thanksgiving!

Established Contributor

Congrats on the approval and satisfying your debts! Get t...

Congrats on the approval and satisfying your debts! Get those GW's going!



Starting Score: EQ: 383 2/2011
Current Score: TU: 644 EQ: 648 EX: 6?? 2/2015
Goal Score: 700


Take the FICO Fitness Challenge