Credit Improvement (USA)

Off-Topic / Lounge
1

Credit Improvement (USA)

So my credit score hovers around 605. I currently have 4 items in collections (below $1800 in total). What are some steps to bring my score up. My goal is 775 of course, but I can be happy with a 700.

2

Get a credit card and only put one tank of gas on it a month. end of month pay it off in full before the due date. repeat. Do not use it for anything else ever. dont let it get over half of the available balance and dont buy new gear with it lol. Pay off the collections as fast as possible and you will be in a good spot within a few months.

ps im just a guy on the internet so take this advice with a grain of salt.

3

I fucking love salt. I wish my credit card expenses never went over half the limit. Rental car companies put a 200 dollar hold on it constantly plus the cost of the rental! bastards!

4

Haha I know the deal, I had a rental company in mexico charge me the entire bill up front plus a hold. Fucking bastards what was I gonna do get back on the plane lol.

5

You’re credit score goes up when you have money on your cards.. Making a $20 purchase and paying it off right away won’t give you much increase in your score. If you have a card for let’s say a $1000 limit, I’d always keep like $200 owed on it and pay a bit over the minimum on it monthly. If you have one card, just stick with that. No need to bounce around and spend $30 on one, and $25 on another.. That can actually end up hurting you. If you have multiple cards, pay them off and pick one, maybe two and strictly use those. Also, don’t cancel old cards either. You’re better off leaving them at zero balance. You can also look for a secured credit card, those will help your score rise but they require a deposit upfront which may be daunting, but after a while of good use you can apply for a regular credit card and get your deposit back.

Hope this helps

6
  1. Pay off the items in collection
  2. Continue paying off debts (car loans, credit cards, etc) ON TIME
  3. Get an account on freecreditreport.com or something similar, although I’d actually recommend experian.com and paying the monthly bill ($30) for a while. It will give you recommendations on what to do to bring your score up and planners on things like…if over the next six months I pay this much towards credit card debt, what does that do to my score, etc.
  4. If you have a credit card currently, pay it down to nothing or next to nothing, then use it to charge some monthly stuff like gas and groceries. Pay off most or all of it on time.
  5. If you don’t have a credit card currently - getting one with a credit card with a lower limit and charging some monthly stuff to it like gas and some groceries may or may not hurt. Any hard credit checks - the kind that are done when applying for credit, knocks your credit score for up to a year or two. But, if you don’t have a way of paying off creditors and showing you can make the necessary payments on time, you may want to do this and justify the temporary knock. If you do get a new credit card, pay off most or all of it on time. (Credit card companies only report your balances to credit bureaus a couple times a month - you have no idea when they’re going to do it, so if you’re using it minimally, odds are you’re going to show a balance when the bureaus check)
  6. Closing old credit cards that don’t carry a balance and that you don’t use may help, or it may hurt.
  7. Look into debt/equity ratios and get your debt to equity ratio in the positive range.

I just bought a house, so I’m well versed in credit scores, what affects them and how to get your score as high as possible before looking for a mortgage.

7

What that guy said about gas:wink: