How to improve credit

[[La...]]

Im 26, have a short credit history, about 5 years. I have 1 credit card to try to help build credit but got several late payments this year and last due to having to quit my job from this withdrawal stuff. Its a small amount and I am using what little money I have left to keep up small payments. I had student loans that became late also but have since paid them off. At the time I knew nothing really about credit scores or how they work and thought I could improve the score dramatically by paying them off. I also have an account in collections from a medical bill. I have not been very responsible with money I have to admit. I want to change that now. Does anyone have suggestions for what I can do to improve my score and how long it would take to get it to a respectable level? It is in low 500s. I read about getting a small short term loan and paying it right back, but will applying for that loan hurt my score? I am trying to think of the future so Im wondering if it is possible to get an apartment with a score that low or in low 600s

[[be...]]

First you are young and I bet my credit score wasn't that great at your age, tho I did pay my bills with ease. Paying off your student loan was a great step. It's hard to get a loan, depending on how much it is, unless you have collateral, like a home. If you have a car and are paying it off that that's good too. You do not want collection calls. Try your best to pay them off. And any other bills. They go right to your credit reports. In the 500s in not that good, but it is better than 300s. I guess the main problem is these stupid benzos. If you get lucky and heal fast you should be able to get a good job and pay everything off. What you have in your favor is your age. Use that to your advantage. Unfortunately, the less money you have the higher the interest rate. So when you are able just take out a small loan and pay it back before it is due. Then build from there. And pls avoid private equity loans as they are a rip off and you might end up paying an interest rate of 300%. They are getting worse as they have a very strong lobbying group and are in like flint with Capitol Hill, who make the laws. You'll get there. You have plenty of time. I don't have so much but then my credit score is very good as last I checked it was 798. Wishing you the best. And you can always marry a rich old fart who is ready to die.

 

Betsy 

[[Vm...]]

First, pay off whatever debt you owe, or at least most of it. After that, there is an excellent website called creditkarma.com. You can view your credit score for free and also apply for secured credit cards. With secured credit cards, you either can use your bank account as a collateral or put down deposit/payment onto the card with high interest. I recently got a discover secured card. The minimum payment down was $200 but the interest rate is pretty high, I believe around 22%. Before even considering a secured card, try paying off most of your debt first. Credit Karma is cool though because you can monitor your credit score and it gives you a lot of resources how to build your credit. Good luck to you!

[[La...]]

Thanks for the suggestions guys,

 

Vmalone, I am signed up at credit karma. I'm a little confused learning the ins and outs of what effects your score in what ways. For instance, I made a payment for my credit card and my score lowered by 22 pts. No idea why because there has been no other changes. Also, I read about becoming an authorized user on a parents account to help build history, but some sites say it wont effect the score much at all, and others say it will. Do you know anything about this?

[[Se...]]

Laura,

 

Reddit has a wonderful part of its forum called "Personal Finance" that is a great place to start.  I found a thread for young people (US) chock full of great advice:

 

 

Just remember, withdrawal is not permanent.  There was a study a few years ago of BenzoBuddies done by a wonderful US based researcher and she found that most people are healed by 18 months (no symptoms).  You are giving yourself a great gift here to come off these drugs at your age.

 

Remember, you are authoring your future one good decision at a time.  Just keep figuring out the "next best step" and keep reaching out for advice.  You'll be able to figure out your career path when you are well and hopefully that will involve going back to school to study something you'll love.

 

Major props for figuring this out at your age and not in your 40s, 50s or beyond.  You ARE going to get your life back, your health back and your hope.  It may be hard now but lean on the people who love you and just take it one day at a time.

 

I'm a lot older than you and I've learned an amazing amount from Reddit's financial forums.

 

 

Ali

[[Fl...]]

Creditkarma is a good resource for watching trends but keep in mind that the proprietary score it gives you is NOT a FICO score. It is their own scoring model and that isn't what is used by most lenders.

 

I had serious credit issues starting from when the economy crashed back in 2008 and I was ready to get started rebuilding my credit after my bankruptcy back in 2010 but unfortunately that was right before I came off of clonazepam and all of that got shelved during my recovery. I did keep an eye on my credit via creditkarma though and recently decided it was time to do something about getting that back on track so I applied for an unsecured card through creditkarma and was approved. I haven't even used the card yet but it's a pretty big slap in the face to go from being able to write checks for tens or even hundreds of thousands of dollars to being broke and credit-less (on top of being very, very sick) so I am thankful that I was able to take the first step toward getting that part of my life in order.

[[La...]]

FloridaGuy,

 

  sorry to ask so many questions but I am new to figuring the whole credit thing out. Does your score take a hit when you get a new card? I read that inquiries for credit lower it, and that when you get a new one, it shortens the credit history and that also lowers it. Do you just have to take the hit and then wait for it to recover that hit by using the card and paying off on time? this stuff is confusing sometimes  My only card is restricted because of  late payments so I'm guessing that means that when I pay it off, they will just close the account and I will need to get a different card?

[[be...]]

FG:

 

What is a FICO score and how do you find your own?

[[Fl...]]

FloridaGuy,

 

  sorry to ask so many questions but I am new to figuring the whole credit thing out. Does your score take a hit when you get a new card? I read that inquiries for credit lower it, and that when you get a new one, it shortens the credit history and that also lowers it. Do you just have to take the hit and then wait for it to recover that hit by using the card and paying off on time? this stuff is confusing sometimes  My only card is restricted because of  late payments so I'm guessing that means that when I pay it off, they will just close the account and I will need to get a different card?

 

Don't overthink it. Getting a new card might temporarily lower your score but it probably won't be by much and it should recover quickly. Credit scoring is mostly a common sense thing. The big things that affect your score are late payments, collections and such. Hard inquiries (you applying for new credit) do count against your score, soft inquiries (like if you pull your own report) do not count against you.

 

One really good thing creditkarma is good for is learning about your credit and what affects it so I would definitely recommend signing up and spending some time poking around over there.

 

FG:

 

What is a FICO score and how do you find your own?

 

FICO is the main scoring model used by lenders.  It is basically a summary of your credit worthiness, or at least an interpretation of it. I think you can sign up at Discover to get your score for free.

[[La...]]

I see. As far as collections, I read you can send them a letter agreeing to pay in full if they will remove the account from your credit report?  Maybe you can also call them, not sure, but I read that as long as you dont acknowledge that the debt is yours, it wont start over the clock on when it falls off your report. If I could get that account taken off hopefully that would have some impact

[[be...]]

FG:

 

I did read my score and overall it was considered excellent. But I don't know why I got bad reports from changing my finances to other places. I changed to different banks because I had potential online scammers trying to use my credit cards. I'm worried about how this may effect getting a loan for a place I plan to buy within the next 6 months.

 

Thanks, FG........

[[Se...]]

I see. As far as collections, I read you can send them a letter agreeing to pay in full if they will remove the account from your credit report?  Maybe you can also call them, not sure, but I read that as long as you dont acknowledge that the debt is yours, it wont start over the clock on when it falls off your report. If I could get that account taken off hopefully that would have some impact

 

Laura,

 

I really encourage you to write a post on Reddit with your questions.  They'll give you really good advice there.  Looking into past debt can trigger it being kept on your record, there are specific caveats or considerations.  I don't remember all the details but the Personal Finance subreddit is excellent and they have lots of great advice threads there you can read up in detail.

 

 

Ali

[[Fl...]]

I see. As far as collections, I read you can send them a letter agreeing to pay in full if they will remove the account from your credit report?  Maybe you can also call them, not sure, but I read that as long as you dont acknowledge that the debt is yours, it wont start over the clock on when it falls off your report. If I could get that account taken off hopefully that would have some impact

 

Not sure about the time for dropping off but you can negotiate all kinds of stuff with some creditors, including a reduced payment to settle the account.

 

But I don't know why I got bad reports from changing my finances to other places. I changed to different banks because I had potential online scammers trying to use my credit cards.

 

Creditors like stability. Canceling credit cards, applying for new credit etc shows instability and when you cancel accounts it counts against your length of accounts metric. The scoring companies and lenders have no way to know if it was for a "good" or "bad" reason so it doesn't surprise me.

[[Ce...]]

I see. As far as collections, I read you can send them a letter agreeing to pay in full if they will remove the account from your credit report?  Maybe you can also call them, not sure, but I read that as long as you dont acknowledge that the debt is yours, it wont start over the clock on when it falls off your report. If I could get that account taken off hopefully that would have some impact

 

Not sure about the time for dropping off but you can negotiate all kinds of stuff with some creditors, including a reduced payment to settle the account.

 

But I don't know why I got bad reports from changing my finances to other places. I changed to different banks because I had potential online scammers trying to use my credit cards.

 

Creditors like stability. Canceling credit cards, applying for new credit etc shows instability and when you cancel accounts it counts against your length of accounts metric. The scoring companies and lenders have no way to know if it was for a "good" or "bad" reason so it doesn't surprise me.

[[be...]]

 

 

Creditors like stability. Canceling credit cards, applying for new credit etc shows instability and when you cancel accounts it counts against your length of accounts metric. The scoring companies and lenders have no way to know if it was for a "good" or "bad" reason so it doesn't surprise me.

 

That sucks as I just wanted not to end up with a back account with no money in it.

[[Fl...]]

That sucks as I just wanted not to end up with a back account with no money in it.

 

These aren't like late payments, collections, bankruptcy etc. (the really bad stuff). I wouldn't sweat these things too much.

[[be...]]

That sucks as I just wanted not to end up with a back account with no money in it.

 

These aren't like late payments, collections, bankruptcy etc. (the really bad stuff). I wouldn't sweat these things too much.

 

No, nothing like that. My average score was 793...............

[[Fl...]]

No, nothing like that. My average score was 793...............

 

I don't think I had a score that high in my entire life and I have bought and sold millions of dollars worth of real estate (which is part of the reason why I never had a score that high. Considering that FICO scores only go up to 850 you are certainly in the very top percentile.

[[be...]]

No, nothing like that. My average score was 793...............

 

I don't think I had a score that high in my entire life and I have bought and sold millions of dollars worth of real estate (which is part of the reason why I never had a score that high. Considering that FICO scores only go up to 850 you are certainly in the very top percentile.

 

Hi FG: I just double checked as I have benzo brain. My average score is a bit higher~~799. Yippee!!!!

[[Fl...]]

Hi FG: I just double checked as I have benzo brain. My average score is a bit higher~~799. Yippee!!!!

 

Congrats. That's what I would consider to be almost perfect credit.

[[be...]]

Hi FG: I just double checked as I have benzo brain. My average score is a bit higher~~799. Yippee!!!!

 

Congrats. That's what I would consider to be almost perfect credit.