Fixing Credit Score

[Anonymous]

Hi!  I'm new to this board and just signed up tonight.  Looks like you guys have some great information to share and I am in need of some.  Recently came into some money and am trying to repair my credit score in a bad way.  I needed a new car so I put a huge chunk of money down on it and financed the rest so I could have some positive on my report to help raise my score.  I have 2 collections on my report that I have paid off and have paid off the remainder owed on my last vehicle.  I'm getting some rather conflicting information from different people.  I was told that if my last car was paid off and I paid off a few of my "pricier" debts that it would help improve my debt to income ratio and make my credit better.  I was also told by a realtor friend that once you pay those accounts off it'll reopen them and my score will lower.  My goal is to have a decent score to be able to purchase a house at some point.  I know the new car financed will help as long as the payments are on time, but what about the rest?  I was also advised to get a pre-paid credit card that reports to the credit bureau's and pay it off monthly and that should help raise the score as well.  You guys definately seem to know what you're talking about here...what is YOUR advice? Any advice to help me in the right direction would be helpful!

Thanks so much!

[fused]

Welcome to the forums!

A few questions for you. Do you know your FICO scores (the scores you can purchase at this site)? I assume you don't have any open credit cards on your credit reports?

[Anonymous]

No open credit cards at all.  No past due ones either.  Anything that's on my report are small things.  As I said I already paid off my major past due's in full.  I currently do not know my scores either.  I know they would have to be around the 500's.  Just hoping that anything I paid off or plan on paying off won't hurt the score and make it go down any lower.  Hindsight is definately 20/20!

[haulingthescoreup]

Welcome to the forums!

You'll need some revolving credit (CC's, lines of credit) to get your scores moving again.

Don't do as many do --you don't need a ton of starter/ re-starter cards. Two will do you, combined with the patience to let them create a string of clean history.

Revolving credit brings more FICO score points, because it's riskier. It's easier to screw up a CC than an auto loan, at least for most folks.

But it's best to clean up your reports before you go out shopping for credit, because otherwise, the offers that you do get will be pretty much crap.

If you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums.

[newstart2010]

I would recommend pulling all three of your reports, (don't worry about the scores for right now unless you are just curious.  Its more about the derogs right now) and posting without your personal info all of the bad accounts (paid and unpaid) in the rebuilding your credit forum.  That way we can go through them one by one and tell you what to do for each.  make sure you include the ones you already paid off and what their statuses read as so you can learn how to possibly get them fixed as well.

Your realtor friend should not make broad statements like that.  Its not always true.  It depends on what the account status is after getting it paid, if it stays on the report, etc.  Also, do not dispute anything with the credit reporting agencies just to see if it will come off.  this can get you into hotwater.  First work all the normal avenues and see if you can legally and perm. get everything abd removed from the credit.