During my college years, I did alot of stupid and irresponsible things and trashed my credit record like there was no tomorrow. My car got repossessed (I bought the car out three weeks later, see how stupid that was?), and I got three delinquent credit card accounts that got terminated (one was on a settlement). I regret what I did. so ever since I graduated, I never made one late payment on my two new credit cards, and I never even kept a balance on them. However, since my credit history is still in the toilet, it was really hard for me to get new credit cards and loans. I will have enough money to pay for the down payment for a house in a year. However, I am really worried that I will not be able to get a mortgage loan. So, how do I improve my credit fast, so in one year, I will be able to buy a house? Thanks.
Well back in 98' when i got out of college my Credit Score was JACKED UP! I think it was 610 with 3 charged off from stupid things in collge and gambling debts. Well anyway got my first CC in 99' with a limited balance of $500. but as I slowly used it and paid it off. I used my car title as a colateral on a loan, then paid it off. Received new CC with higher limited, used it and paid it off. Well 6yrs later my credit score is 752 as of today but I still have some CC balance
unfortunately the #1 thing thats factored into your credit rating is time. If this was within 2 or 3 years ago, I hate to say it but it might be kind of hard to get that mortgage without someone to cosign for you. It's impossible to raise your credit significantly in one year unless you totally become debt free. Go check out MBNA's privacy assist program. They have a credit score analyzer that tells you what yoru score will be if you do such and such scenario. Wil give you an idea of what you can accomplish in 12 months.
You're not going to rebuild your credit in one year. That's just not possible. Anyone that says you can is trying to scam you. Seriously, watch out for those kinds of offers. Your credit will get even worse and you will lose even more money. Rebuilding your credit takes time. There's no way around it. If you haven't paid off all your old balances, do that first. Then, get 1 credit card and pay it IN FULL every month. Pay that bad boy off the same day you get the bill. Do this for a few years and your credit will slowly start to improve. Also, get a copy of your credit report. Avoid "free credit report dot com" as it enrolls you into some kind of membership that has monthly fees. It's a ripoff. I would go to True Credit and choose the one time fee option. They will send you your credit report from all 3 agencies and also your credit score. You can even print it online right after you pay the fee. Once you have that, you can start to clean it up. Close any accounts that are still open. Pay off any old balances that show up. This is just a starting point. Everything else will take time. There's no getting around it. There are no shortcuts. Good luck!
You could try protesting some of the bad items on your credit report. They have 30 days to reply. If they don't reply within the 30 days, they have to take it off your credit report. Sometimes, they can't get in touch with the company that gave you a bad rating, and they will take it off. I wrote them letters for 2 years until mine was completely clean.
That's what I did. Equifax has a thing on their site that allows you to send a formal dispute through them. I had 3 negative things on my credit report, and got 2 of them dropped completely. 1995 was when I started to screw up my credit, but after awhile...a LONG while...it will get better. You just have to start paying things off on time, and it's kind of like a snowball effect. Then, eventually you'll get invited to enroll for a credit card that will either have a higher interest rate or require a security deposit. Sometimes, it's just necessary. Think of it as your "punishment" Anyways, I just bought a new house before Christmas and was able to finance a car for my fiancee. Dreams really do come true!!
I trashed my credit but good in 2000, and I rebuilt it from 450 to around 750 on all three credit bureaus right now. Here's how I did it. First off, I got a credit card that I had to put a 'deposit' down on. It sucks, but it's what I had to do. I paid every utility bill that I could with the CC, and in turn, paid the CC with the money I would have used to pay the utility bills. That built up a little credit. Then I got a pre-approved CC with some yearly fees. I bit the bullet and did that too (around $80), and paid some bills with that. Around this time I did some experimenting and found out that you can get your utility companies to fax a letter of credit (as long as you've paid them on time for at least a year or so) to the three credit bureaus. This helped as well. I called every company that I dealt with, including time-warner, and had them fax something in. I also got a few 'settlement' offers from some collection agencies, where I paid around half to 'settle' my outstanding debt. In hindsight, I wish I would have paid them off in full, because your credit record shows 'settled' which isn't as good as 'paid' to credit-issuers, but it's better than bad debt. So if you have a mammoth outstanding debt, you may want to go this way if you can't afford to pay them off in full and can't wait for seven years for the bad debt to drop off your report. Both of these things helped, and I soon got some 'pre-approved' CC offers without any fees or deposits (but still with high interest). I started jumping on them left and right, using them once, and then filing them away after I paid them. My experience shows that you don't have to use the CC all the time, just once to show that you have it. Part of your CC score is based on your credit vs debt, so if you have 8 CCs x 500 credit, that's $4000 in credit, and if you have 0 debt on them, that looks pretty good. So a two years ago, I decided to try to finance a car. I was one of those types that always paid cash for a car, but I wanted something a bit nicer, and it was time to finance. I had heard great things about Credit Unions, and luckily, I had access to one through my work. Unlike banks, Credit Unions actually try to help you. I opened an account at the same time that I applied for a loan, and got it no problem. I also got a nice low-interest CC through them as well. If you have access to a Credit Union, open an account right away and start building a good history with them. Chances are they have a mortgage department as well. Now I get low-interest pre-approved CC offers every day. It took a few years, but it was worth it. I also got approved for a nice mortgage last year without any extra headaches. A few other things. One thing I've done to help my wife's credit immensely (hers was as bad as mine) is add her as an authorized user. She doesn't have the CCs, but all of the good credit is reported to her credit report. It doesn't effect my credit at all, but really helps her. So if you have a relative that has good credit, just ask them to put you on as an authorized user. Explain to them that you don't have to have the CC, you just get the good reports. I even put my newborn son on four of my CCs so he can have good credit when he's ready. You can also have too many credit cards. I have around 18 now (including gas cards), which is actually hurting my credit a little. I'm in the process of pruning down the older ones to around 10. From my experience, 15 is about the max you want to get. I guess I got pre-approval happy . I also found that companies with in-house credit departments are easier to get credit with. A few years back, when my credit still wasn't good, I was able to get lines of credit with Conn's and Diamond Shamrock (Valero), which both do credit in-house as opposed to just signing on with a big CC issuing bank. They're also both based in Texas . I've read that bad credit 'clinics' are kind of a scam. They charge to spam CC companies with whom you have debt with requests, and like glad_ken said, if they don't reply, the bad credit has to be taken off your report by law. So in the end, like all of these other techniques, you can do it yourself. Once you get the ball rolling with getting CCs, they should come in pretty frequently and it will be all down-hill from there. One other thing- if you are being hassled by a collection agency for a debt that is older than seven years and is off your credit report, do not even talk to them. By law, they can't do anything to you (they already fuxored your credit for seven years), but if you start negotiating, it goes back on your report. Bally's has been after me for 13 years, and i just ignore them now. Just remember, credit is your friend. Lack of discipline is your enemy. Anyone who says that credit is bad doesn't know what they are talking about and you should quit listening to their advice about it right now, even if it's your great grandpa who lost everything in the Great Depression. Everyone who has made it rich in Real Estate and many other investments can tell you that they paid little or no cash up front - they were all done with credit. That's not a late-night infomercial scam, it's fact. Hope this helps, J
Wow, thanks for the advice. Just let you guys know, I did pay off all three of my credit cards about a year ago. Now, I only have 1 credit card and I've never been late. I am completely debt free. However, my score is still about 625, and somehow in the past two months, I've never received any CC offers. I really want to get this thing fixed.
620 ain't bad.. I would try to get some letters of credit faxed in, get on some CCs as an authorized user, and try to get a CC with a deposit (so-called 'secured' card). It may cost you a little work and money, but you're almost there with that score.
curious what is good credit and what is really good credit? I think when I bought the house last year my rating was something like 725 or 735.
Go to this site for answers to all of your questions. It's the clutchcity of credit repair. http://www.creditboards.com/forums/
Well, it's different according to the Bureaus. For Experian, 830 is the max, for TransUnion, 925(not really sure) is max. But I am envious of your 735 though. I will get there some day, hopefully soon.
Next time you see a Credit Card offer for 0% on balance transfers for about 18 months, open it. See what you have to do to keep it at 0%, apply. Move all your high-interest card balances over. Be disciplined to pay for that new 0% card in those 18 months. Pay it all. Close all the other credit cards. Just have 1 credit card and pay that off. That should fix you up in 18 months and bring your credit score higher. This is what my wife made me do, since I had done the same thing you did while in college. I had a very, very low credit score and I couldn't ever get a car loan or any type of loan under 13% until I fixed all that shiznit.
Don't pay all of it off completely, let a little carry over (~10 bucks) and pay some interest on that. It shows your ability to manage crushing expenses. A google search or even phoning a government expert for free consultation should answer most of your questions.
if you have a score of 610, then thats not too terribly horrible if you can get yourself to 620 (which you possibly acheive by knocking down your balance to credit limit rations on all your open credit accounts), then you would qualify for a top rate mortgate as long as you a) Have good income and b) (most importantly) have a good monthly income/debt ratio
Actually, that might hurt him even more. 1) Closing all your credit accounts at once makes it look like you got yourself in trouble and can't handle them (while this doesn't hurt the score necessarily, this would definitely catch the eye of an underwriter) 2) Having multiple credit accounts showing open on a report is not a bad thing as long as they have a good balance to credit limit ratio. If he were to put all his eggs in one basket so to speak, then that can drop his score (not sure of the #, but if your credit balance exceeds 75% - 80% of your credit limit, it will drop your score)
