Questions And Answers On How To Build A Good Credit Score

By admin | July 31, 2011

Chris asks…

How can you raise your credit score if you are constantly denied when applying for credit?

I was told that in order to raise a poor credit score, you need to pay things on time and get new credit to work with. I’ve been paying my car payment on time (which has ultimately raised my score a few points-almost into the good score range-600′s) However, I do have about $2,000.00 left in the bad credit part of my credit score, which marjorily is medical bills and one other thing-a bad cell phone bill. I am trying to pay off each one little by little, but I really need my score to start going up faster! I have to buy a new car soon, which I will have a co-signer with not much better credit then me. However, we can afford the car. I also tried applying for a credit card that said when I was applying, that specific card was geared towards people that want to build up a lower credit score and I still got denied!! How in the hell can I raise my score if this keeps happening? I can’t wait forever to get my life back on track when I’m trying my hardest to fix what I didn’t have much to do with in the first place (bad cred from a HUGE surgery I couldn’t pay and was gipped into).
What else can be done?
Let me say I have never filed bankruptcy and I was just approved for an apartment.
I have no outstanding credit cards or balances in the bad credit section either. They were all paid off over 2 years ago.
I wasn’t asking to get a credit card so I can dig myself into a deeper hole. I was asking because this is how I was told I can raise my credit. By making small purchases (I already planned on making) and paying them off with the cash I would have used. Thus showing a good repor with the crediting agencies.

admin answers:

Raising ones score is not simple. Those bad debts are keeping your score down. Even if paid or not, they are reported for 7 1/2 years under the FCRA Running of Reporting Period – Section 605 [15 U.S.C. § 1681c]

Even if you are now paid off on your credit cards or even keeping payments on time for the past 2 years, your score was damaged and only time will improve your score. Lenders often pay less attention to old debts and are more concerned about the past few years to see if you are able to improve your ability to handle credit.

You should go the the FTC web site and learn about improving you credit score. Also check out the information at FICO. Here are there links

http://www.myfico.com/Default.aspx

http://www.ftc.gov/bcp/menus/consumer/credit/reports.shtm

Hope this helps answer your question

Rachel asks…

How to improve my low credit score?

I’m stuck between a rock and a hard place. When I was younger, I thought the answer was to have numerous credit cards. I of course was not responsible and ended up with a lot of debt. I had learned my lesson and paid off all my debt at least 8 years ago.
I would like to re-establish my credit, but unfortunately, I get denied credit cards due to my low credit score. I have been told I need a higher credit score in order to be approved. Now that I am older, married, and have a family, I would like to someday own our own home. Before I can do that, I really need to fix my credit score.

I am stuck in a catch 22. In order to raise my credit, I need to establish more good credit. But no one will give me a credit card due to my low score. All I have is a low score. My debt has been paid off for a very long time. I have a debit mastercard, but that does not help my credit score.

What can I do to start building good credit so I can get a credit card and re-establish?

I’ve tried researching online, but I get so many websites that are bogus. Any help would be appreciated. thank you.
I have a steady job. I’ve been working at my current job for Five years (still there).

I have no late bills

I have no open credit cards as the old ones were canceled and paid off.
they were all stopped since I didn’t pay them off for a long time and went to collections :/ if only I was smarter then and realized the consequences of how it would affect my adult life.

admin answers:

You can repair your own credit!

Every year you are entitled to one free copy of your credit report from each of the major bureaus. You should order your free report from http://www.annualcreditreport.com and check for inaccuracies.

Dispute the inaccuracies directly with the credit bureau, and according to the Fair Credit Reporting Act they have to verify the item. If the reporting company doesn’t respond in 30 days, or sufficiently prove the item should be there, it will be removed, which should raise your credit score.

If the item comes back verified, you’ll have a chance to contact the reporting party and try to negotiate a settlement or payment.

You should consider attempting debt validation directly with the creditor at this stage. This will require that they provide you with legal proof that the debt is valid, within the statute of limitations, and actually belonging to you, within 30 days.

For items you did not dispute, you can be proactive and contact the debtor listed on your credit report. Look into requesting a “Pay For Delete” where you’ll settle for a percentage, or pay the whole debt and they’ll remove the listing from your credit report.

“Pay For Delete” is very important, because if you just pay the debt the creditor can continue to list it as a delinquent account, which will keep hurting your score.

Lastly, look into ways to build “positive” credit to keep your credit history fresh and growing.

And remember, everything a credit repair agency or lawyer can do to repair your credit, you can do yourself. Find a good credit repair guide, and get to work!

I used the one at http://howtofixyourcreditscore.info and it really worked for me. It came with sample letters I could use to make arrangements and file disputes.

The best part is, it also taught me how credit scores work, and what I can do to raise my score. It really saved my credit.

Lynn asks…

When is a good time/age to open a credit card?

I’m 20 but all my friends already got credit cards since they first entered college (18) and they’ve been telling me it’s better to build up your credit score while young. I don’t really get how that works though because my best friend doesn’t even work/have a job and yet she has a credit card?? Will she earn good credit even if she doesn’t use the card? I worked for a semester but am gonna take this current semester off- however, I’m just curious, when would be a good time to open a credit card? I’m looking at either the nordstrom or starbucks one since they give good rewards. Any advice?
since I’m not going to work this semester, is it even a good idea to open a card?

admin answers:

If you are not working it is not a good idea to open a credit card. Credit cards just make it way too easy to buy things that you couldn’t otherwise afford. If you don’t have a job (income) don’t get a credit card. Don’t fall into the credit trap, you will be paying for the rest of your life.

Mike asks…

how long does it take for your credit score to improve?

Hello i incurred a default on 2 of my 3 credit cards. Luckily i still have one remaining card as i am using this to build my credit score. I havee set up a direct debit on this account so no further payments will be missed. I also applied for a cashplus builder account where you pay £4.95 per month for the use of this top up card and after 12 months they report to the credit agentcies that you successfully paid off a loan.
I was wondering how likely it is for me to get a better credit score and how long it is likely to take if i stick to my current plan.

Thank you!!!! x

admin answers:

It does take a while. The best thing to do is to talk straight to the company, NOT the creditors, about the debt. Ask if they can change it as a default on your credit report or to a write off or enroll yourself in a debt management program such as careonecreditcounseling.com