Tips for Raising my FICO

[Anonymous]

Im 25 and I have quickly learned how important credit is so bare with me because Im NEW to this and may ask some simple questions but seems like this is the place for good advise. 

So I looked on my credit report and I have about 4K in debts about 2.5K is collections, the other being my car loan. My credit score is a 560 (ouch) and I have some question to Raise this score because I am recently married and have the income to buy a home but not the credit.

I have the money to pay off the car loan (1400.00), should I pay this off or keep making the payment?

I came into some money so should I pay off the collection accounts?

If I pay them off will they be removed from my credit?

Some of the Accounts show a $0 balance, Is there a way to get these removed?

I was thinking about applying for a secure credit card (one requiring a deposit)

If I get this credit card Ive heard to use it, and not to use it??? Ive heard to use it and only put a little on it, make the minimum payment and than two weeks later pay it off and do that every other month and that will help your score.  Ive also heard to get a credit card and not use it and that will improve your score. Also I heard when you use it it actually lowers your score. What would you do?

Ive heard that opt'ing out can improve credit scores? is this true?

And Finally, what are your opinions on debt consolidation companies? Anyone know of any agencies that are worth the additional cost?

Thank you for your advise in advance and look forward your responces!

[fused]

Hi and Welcome to the forums! Please begin by reading the credit scoring 101 thread in my siggy.

[Junejer]

Hi Matt, welcome to the forums. Please read Credit Scoring 101 if you haven't already done so.

Before PFD to a CA, you should usually DV first. Before DV, know the SOL of your state, as well as the state that the debt occurred. Read this for a more thorough understanding.

So, I am going to try to answer your questions one by one.

I have the money to pay off the car loan (1400.00), should I pay this off or keep making the payment?
I would keep the car payment in place at this time.

I came into some money so should I pay off the collection accounts?
See my advice above--DV first.

If I pay them off will they be removed from my credit?
Not without a PFD, but DV first.

Some of the Accounts show a $0 balance, Is there a way to get these removed?
GW letters

I was thinking about applying for a secure credit card (one requiring a deposit)
Not a bad idea


If I get this credit card Ive heard to use it, and not to use it??? Ive heard to use it and only put a little on it, make the minimum payment and than two weeks later pay it off and do that every other month and that will help your score. Almost, but not quite. Use it till your heart's content, but before the statement cuts, you have to pay it down to 1-9% util and then PIF by the due date to avoid interest charges. Ive also heard to get a credit card and not use it and that will improve your score. Wrong. FICO will think that you are afraid of your credit and ding you for it. Also I heard when you use it it actually lowers your score. Wrong again. This only happens when you have too high a util reporting to the CRAs. What would you do? Follow the advice that I am giving or something in the ballpark of it.



Ive heard that opt'ing out can improve credit scores? is this true? No.



And Finally, what are your opinions on debt consolidation companies? Anyone know of any agencies that are worth the additional cost? They violate our terms of service to discuss these types of companies.



Thank you for your advise in advance and look forward your responces!
You're welcome

[Anonymous]

Collections hurt your scores big time!    You need to look at your CR and see who is reporting.  If the OC is reporting a CO  with a Bal $      then they own the account.

You can have an OC and a CA  reporting the same account at the same time!   You need to know who owns the account.    If an OC is reporting a CO with a Bal $000     then they sold the account.

Who is reporting and what is the DOFD?    What is your SOL?

As to deleting from your CR.....NO   just because you pay a creditor may contimue to report for 7-7.5 years from DOFD  unless you paid using a PFD.

You should always DV before thinking about a PFD.

Many OCs  will not delete.

Take your time before doing anything. Ask questions as many questins as you need. But do not hurry or you might make a mistake.

Take 1 creditor and CA at a time.