Jan
06
How long to improve credit score?
Posted ByMy husband and I are trying to purchase a house. He has a decent salary and we can afford it. I pulled our credit yesterday to see that his credit score is a 585?! We have had all of our major debt paid off for 12 months now. There is one credit card with a nearly maxed out balance (but still only $1000) and a medical bill in collection for $60. Our new plan is to pay down the credit card to $300 over the next two or three months and take care of the $60 debt. How long will it take for his score to improve? We’d like to wait for it to get better before we apply for a loan. Any other credit score raising tips would be appreciated!
6 Comments
January 6th, 2010 at 5:16 pm
I’m not a credit expert but I’m sure it’s the bill in collection that has done that. Pay that off asap.
January 6th, 2010 at 5:47 pm
Paying down the credit card is definitely a good thing to do. Ideally you should get all of your credit cards under 30% of the total available credit.
But the thing that is causing you more problems is the collection account. When talking to the company about the medical bill. Be sure to negociate with them to have them actually remove the item before you pay it. Only when they send the agrement to you in writting you should pay it. Once they have the payment, and they remove it you should see a boost in your score. As the score only takes into account what is currently on your report, so once it is off the effect is immediate.
Not knowing what major debt you took care of and how much of a negative that is having it is hard to say how much it will improve when you take care of these two issues.
January 6th, 2010 at 6:01 pm
I think you can built a good credit if you get a credit card with someone who has an excellent credit history. For example, if your father has a good credit history then he can request a credit card for you through his company and that way his credit score will be added to yours. It will also improve your credit score.
Anyways, here are some ways you can improve your credit score…
Review your credit report for any errors and correct glitches that may not be accurate (but are still hurting your current score). You can obtain a free copy of your credit report by visiting http://www.CreditReport.com.
Refrain from opening a lot of new accounts over a short period of time, especially if your credit history is on the shorter side to begin with.
Pay your bills on time.
Don’t open any credit lines you probably won’t use. For example, don’t open a lot of store credit cards just to get the initial 10 percent discount.
Instead of moving credit card balances to lower rate cards, try to pay them off. Transferring balances can change the ratio of your total credit card balances to your total available credit lines, hurting your credit score.
Open a few new credit accounts, use them responsibly, and make your payments on time.
Try to use your credit cards less. Even better, pay them off every month. The bigger the space between your total credit limits and the balance you carry, the better. Try to keep your balance below 25 percent (for example, $2,500 if your credit limit is $10,000).
Contrary to what you may have heard, don’t close old, paid-off accounts. Credit companies used to advise people to close old credit cards they were no longer using. But closing these cards shortens your credit report and makes you seem less credit-worthy.
Avoid bankruptcy. Declaring bankruptcy is one of the worst things you can do for your credit score. It may seem like the easy way out in the short term, but over time it will cost you tons in the way of high interest rates.
Good luck!
January 6th, 2010 at 7:00 pm
Between the collection bill and the credit card nearly maxed out, those are problems. The score should go up in about a year. Make sure that when you pay the collections bill, you send the big three copies of your bill being paid off. Usually most places take a year to remove those things from your credit. ALso make sure that your utility bills are paid ont ime as well. Those do determine (a bit) how you are rated. During this time, do not open or close any accounts. Period. DO not apply for any credit offers no matter how tempting it seems. Each time you apply for any one of these your score can do down between three and five points. Once you pick your mortgaeg place, that is it. DO not keep shopping. Brokers will pull your credit and thus you loose a few more points. Three to five don’t seem liek much, but htey add up quickly.
Good luck
January 6th, 2010 at 7:03 pm
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January 6th, 2010 at 8:00 pm
The following 5 critical factors affect your credit score in a major way. By knowing these you can keep a check on them and make your credit score a healthy one.
1. Re-payment history
This factor carries the highest weight in your credit report. How steadfast are you in repaying your loans, makes your credit report shine. Experts claim that this factor alone accounts for 35% of points in your credit score. So, if you falter on repayment front it is sure to be reflected poorly on your credit score.
2. Outstanding debt
The next comes your debt burden. How much you owe is a factor that according to experts carries about 30% weight in your credit score. This is
30% is based upon outstanding debt. To get a better score it is advised that you keep your outstanding debt to a minimum.
3. Length of your established credit history
The time for which you have a credit history also matters. The longer your established credit history the more credit reporting agencies believe in you. This could be simply because of the fact that they have more data to analyze your financial position. Experts give it a 15% weight in determining your credit score.
4. The state of your financial accounts
How much money do you have in your bank account, your income levels, your house, car, your assets etc. comes the next. A healthy bank account reflects a healthy credit score. Experts find that credit reporting agencies give this factor 10% weight while determining your credit score. Read more from: http://www.credit-card-gallery.com/article/204,5_critical_factors_affecting_your_credit_score