HELP! How do I improve my score?

[Anonymous]

So my current situation is I have no open credit, except about 6 student loans that are all currently deffered, but was in default about two years ago.  I have one bad debt that is in collections, and one cc that is currently closed because it is over the limit, but I pay on it monthly on time.  I am scared to try and open any new accounts because they say it hurts your score to have someone pull your credit.  My EQ fax score seems to go down when a new account is added, i.e. a new student loan was recently added, I have never been late and it is currently deferred, but my score went down 3 points when this was added.  I am so confused and I don't have any money to pay one of the credit repair agencies to help me, but I just need some ideas of what exactly I need to do to get my scores up.  They are all currently in the low 500's in fact EQ:541   TU:555       EX:565.  Please if anyone can help me I would appreciate it.

[laz98]

since your scores are already low, an inquiry from opening a new account won't hurt or matter that much.  your scores will still be low.

i would suggest trying to open a secured card, to start building up your credit.  

[haulingthescoreup]

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bgood2me wrote:
So my current situation is I have no open credit, except about 6 student loans that are all currently deffered, but was in default about two years ago.  I have one bad debt that is in collections, and one cc that is currently closed because it is over the limit, but I pay on it monthly on time.  I am scared to try and open any new accounts because they say it hurts your score to have someone pull your credit.  My EQ fax score seems to go down when a new account is added, i.e. a new student loan was recently added, I have never been late and it is currently deferred, but my score went down 3 points when this was added.  I am so confused and I don't have any money to pay one of the credit repair agencies to help me, but I just need some ideas of what exactly I need to do to get my scores up.  They are all currently in the low 500's in fact EQ:541   TU:555       EX:565.  Please if anyone can help me I would appreciate it.

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Hi, welcome to the forums!

One of your big problems now is insufficient revolving credit. It's true that having another SL post isn't going to help you, because you already have one (6, in fact.) You also have a maxed-out CC.

Do the loans show on your reports in some way that they were once in default? If not, then your current barrier to better scores is that CC.

I know things are tight, but I hope that you are paying off that card at a much higher rate than the monthly minimum payments. You'll be enslaved to that thing almost forever if you're only making minimums. What was the CL, and how much do you owe?

I'm thinking that your best bet is to find a local credit union and work with them. Credit unions tend to be much more flexible than the big boys, and you should be able to get a card (which might be secured) once the amount you owe on the closed card is less than half of its credit limit,

One problem that you might encounter in paying it off is that they will continue to drop the CL to just a little above what you owe. This is called "chasing the balance", and it's maddening, because it will make that card look nearly maxed-out all the time. If they do this, you'll pretty much have to pay it off before getting another one, I think.

Right now, I think it's more important for you to work on your debt before you worry about your credit. Once that is knocked off, your scores will be much better, and you'll be able to work on the credit. But I do hope that during this process, you also get savings going, and never have more charged on a credit card or cards than you have money in the bank to cover the balances(s.)

In the meantime, please first read the myFICO PDF file called "Understanding Your FICO Score", and then read Credit Scoring 101, at least the first main post. Both are linked in my siggy below.

It will work a whole lot better if you do these as your "homework", and get a basic understanding of credit, and then ask specific questions about your situation. Good luck!

[Anonymous]

 I have one bad debt that is in collections, and one cc that is currently closed because it is over the limit, but I pay on it monthly on time.

BGood,

I'll try to give you some objective advice.

First thing is to get that charged off account paid in full.  It needs to show "PAID CHARGE OFF" in the remarks section.  Having a charge off with a balance hurts you alot more than a charge off that doesn't have a balance and is paid.  Moreover, it shows alot of good faith to pay that account.

Second thing is to keep paying down the closed cc account until you reach 50% of your (old) credit line.  Then call the creditor and ask them to reopen the account, but only do this after you've paid that charge off.

There's nothing you can do about legitimate previous delinquencies, so just keep on truckin'.

I think to just keep that one cc account and focus on paying down your student loans and reducing those balances.  DO NOT ACQUIRE any new debt before all of those student loans are paid off, except a car for transportation (allowed).

Leggo