How To Build Good Credit and Clean Up Bad Credit

by Millie Kay G. on Debt, Credit and Loans

Although cleaning up bad credit can sound like a difficult task, it’s really just a series of steps.  Lots of companies claim that they can fix your bad credit, but you’ll have more control if you do it yourself.  Follow along and learn some tips for building good credit.



build good credit
Image from heraldsun.com

To start off, you’ll need to have a clear idea of what your credit report looks like now.  If you haven’t already done so this year, head over to AnnualCreditReport.com to request your free credit reports from Equifax, Experian, and TransUnion, the three major credit bureaus.  But if you want to see your FICO credit score as well, you’ll need to pay for it (check myFICO for this) unless you pull some strings (e.g. work with your financial institution to allow you access to your scores). Note that free credit scores exist, but they are typically proprietary in nature and are non-FICO scores. If you need to order your credit scores, here are some places where you can pick them up:

Credit Score
Where To Buy
Cost
Range
FICO Score (TransUnion) myFICO $15.95 $12.76 (sale) 300 – 850
FICO Score (Equifax) myFICO $15.95 $12.76 (sale) 300 – 850
FICO Score (Equifax) Equifax Score Power $15.95 300 – 850
Experian Plus Experian $15 300 – 850
VantageScore Experian $5.95 501 – 990
(letter grade: A – F)
Credit Karma Score Credit Karma FREE 300 – 900

*Products marked “sale” already have an attached promo code so if you order through our links, you’ll receive the discounted price as specified.

For more information about monitoring your credit, check out our article called Equifax Credit Report and Score, where we review Equifax’s products. Also have a look at the article called Credit Monitoring Services, where we discuss services that help you regularly review, manage and monitor your credit information.

How To Build Good Credit and Clean Up Bad Credit

Here’s how to rebuild your credit in 7 steps:



1. Clean Up Errors on Your Credit Report

Once you have your reports, scan over the personal information, such as your address and employer info.  If everything looks okay, then take a close look at your accounts.  Are they listed with the proper information, and does it correctly reflect the payments you’ve made?  Be sure to compare the three reports, because a creditor might report to one bureau and skip the other two.



In the event that you run across any errors or see traces of identity fraud, take steps to file a dispute with the credit bureau.  Correcting your credit report can help clean up your credit.




2. Use Secured Credit Cards
One way to rebuild a good track record with credit is to sign up for a secured credit card.  Your bank or credit union might be willing to issue you a card with a limit, based on the amount you deposit.  Let’s say the bank asks for a deposit of $700; the secured card that they issue will thus have a limit of $700.  By using the card and making payments on it, you can show a steady history.

 Besides your bank, you can also apply directly for these secured cards, as another option:

3. Take On A Reasonable Amount Of Debt

If you’re able to sign up for a department store card or some type of installment loan, you might be able to build good credit.  These cards and loans can help you establish credit and develop your credit history.


4. Build Up Your Savings
Opening a high yield savings account at a bank or credit union is also a great move.  For some people, having an emergency fund in a savings account like the one offered by HSBC Advance can stave off the problems that lead to too much credit use.  For instance, $1,000 in savings would pay off my last medical bill, and it wouldn’t cost me 15% interest in the way a credit card would.



5. Repay Your Creditors

One of the most important strategies for cleaning up bad credit is simply to repay your creditors.  If you’re behind on payments, it might be beneficial to call your creditors and ask for help.  They may be able to accommodate you with a payment schedule that can fit your current budget.  It’s imperative that you make your payments on time since you’re trying to establish that you’re responsible enough to take care of your debts.  Also, try to pay more than the minimum if you can, because the less you pay, the longer you stay in debt.



If you’re using free online calendars or personal planners like Google Calendar or Remember the Milk, you can set up reminders to help you make those payments; I have set up alerts and reminders that are sent to me as text messages or via email, so I get them anywhere and at any time.  Alternatively, you can try signing up for automatic payments — this has helped me pay my bills on time.



6. Look Into Credit Counseling
Establishing a budget can help you manage and repay your debts, but if you can’t stick to your budget, then you may want to consider credit counseling.  The National Foundation for Credit Counseling can help you locate a counselor in your area.



7. Stay Clear of Credit Repair Scams

While credit counseling can be beneficial, it’s best to be wary of credit repair scams.  In particular, you shouldn’t pay large fees upfront to a credit repair agency, and you should know your rights when it comes to repairing your credit.



Finally, ConsumersUnion.org points out that ultimately, you’re the only one who can change your credit.  Fix errors on your credit reports, make regular payments on time, and use your credit cards and loans wisely — and you’ll eventually clean up your credit over time.

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{ 63 comments… read them below or add one }

1 JULIE August 21, 2009 at 10:51 am

I had secure credit card 2 years ago and made 2 late payment and then paid it off, then the bank closed it. I have paid off my bad credit now i need to build my credit score. I just applied for another secure credit card with my new bank and it was accepted. what can i do now to build it up…
help me please!!!

2 SVB August 21, 2009 at 12:07 pm

Julie,
You’ll have to keep watching your payments and make sure you pay your bills on time. Sign up for automatic bill pay at your bank so you don’t forget to meet your payment obligations. And monitor your credit regularly so that you know what affects it both positively and negatively. The credit industry is much much stricter now than it used to be so it has become much more important to manage your credit well. Even people with good credit have noticed how their scores have been lowered due to how the credit industry measures your activities these days. So be mindful of how you pay your bills!

3 Nichole September 1, 2009 at 5:21 pm

I have around $7000 in debt reporting on my credit report. I have obtained a copy of my credit report and have corrected all errors. Now im left with a score of 500 and need to get it up because i plan to buy a home in the next couple of years. Ive heard that paying off debt that has already hit your cedit report does not do good for your score. I have some debt that will come off in 2011 do i still pay it, will it help my score? will making payment arrangements help or is it better to pay in full? Can any of it be remove if i pay it off?

4 SVB September 2, 2009 at 10:58 am

Nichole,
It depends on the type of debt that $7,000 is. is it in collection? Because as you said it will be coming off in 2011.

if you’re going to buy a home after 2011 it may be prudent to consider if it’s worth tackling your fund in the debt that’s in collection first or any other potential financial responsibility.

If you can clarify your situation, then maybe others can also chime in and help.

Paying off debt that has already hit your credit report does help, but again, you need to clarify what type of debt this is.

5 nicky September 15, 2009 at 10:30 pm

I Have like $5000 in debt and all of them are in collections. I am paying them off now and will be done the end of this year. I have collection debts of 2 credit cards, and am breaking a lease for an apartment penalty, and also 2 banks that got closed due to unpaid overdrafts.

Will i be able to buy a house right after that or would i have to build my credit back up first?

And what are some ideas of bringing it up asap?

6 The Smarter Wallet September 16, 2009 at 2:40 pm

@Nicky,
You’ll need to check your credit report and score to see where you stand. Check your credit history and see just what the lenders are seeing so that you can get an idea of how long you’ll need to work on your credit to get it back in good standing (in case it needs to be improved). If you don’t know your credit score and what your credit report looks like, then you’re just flying blind.

Maybe take a look at your FICO score through Equifax. I write about it here. Or you can visit a lender and find out if they’ll check your reports for you (and give you the information). Note that any visit to the lender and any application for a loan may cause them to do a pull on your credit which could cause your score to fall even further. It’s better to check your reports on your own prior to making a loan application so that you don’t ding your credit unnecessarily.

It appears that you are doing things to affect your credit standing negatively. I am not a lender so I cannot tell you if you’ll be able to qualify for a mortgage but IMO, you may have trouble getting a large loan under your conditions. Unfortunately, your prospects may be impacted because you’ve got closed accounts and are in collections.

The article above tells you what you can do to help improve your credit standing.

7 Rose September 18, 2009 at 8:20 pm

I want to know how should I built my credit scores as I just got my Employment card, as I will get ‘green card” soon. It means I am not a US citizen yet. Please advise, what should I do to built my credit score? So I can buy a house soon. As my husband doesn’t have a good score. I want to built my score to buy a house in the future.
Thanks a lot,

8 Heidi October 9, 2009 at 9:51 pm

I need to build my credit score. I have reviewed my credit reports and challenged several items, which have been removed. I had two items in collections that I hadn’t been aware of prior to pulling my report. I paid those in full, and had one removed as it should not have been in collections. I have two current accounts (one revolving/one installment) which are both in good standing, no late payments have been made, ever. I reduced the balance on my revolving account so that it’s less than 30% of my limit at all times. I do have a judgement on my report (paid) for medical. That’s legitimate, and there isn’t anything I can do about that. I have thought about opening a secured card, but every card I read the terms, the options seem so burdensome for fees, that I just don’t feel that’s something I want to do. I have very little current debt, just a very affordable car payment and one card. I just don’t know what else to do to get my score up…I know I need more credit – I don’t have enough available, but my score isn’t high enough for a reasonable card. I’m currently preapproved for a mortgage, but the month to month variations in my score is making it a close thing. How can I raise it without paying $150 in up front fees for a secured card? (I have no problem with the deposit for the card, just the fees!) Please help!

9 Santacruz October 29, 2009 at 8:27 am

Sometimes, it’s hard to get a credit report. I was broke for about 5 years and it took 2 years to get back my credit. I improved my situation by reducing my debt and paying my bills on time. I got rid of my highest interest rate loans one by one.

10 Credit Master November 4, 2009 at 8:43 am

When you’re working to build or rebuild your credit history, how you use credit is everything. It’s important that you build the right credit habits to build and maintain a good credit score.

Unfortunately, credit cards don’t come with manuals for wise use. You may have already learned the hard way about the devastating effects of credit misuse, but it’s never too late to start over.

11 Cee November 17, 2009 at 3:08 am

I think it’s ridiculous that they make you pay to see the score, because they know it’s the only thing most people want to see when they go for their “free” credit report. I know I have never missed a payment, and I know the status of all my (student) loans. I just want to see how my “new credit” is building. The scores are there for a reason: so companies don’t need to look at the other information. I want to know what my number is as it’ll affect what type of car I can purchase upon graduation, what type of house I will buy in the nearer-rather-than-further future.

12 Sev November 17, 2009 at 6:01 pm

I’m in a very confusing situation. I reviewed all three of my credit reports and on all three, it says that a particular account is in good standing or I’m paying as agreed. However, when I called to close the account after three years of not receiving a statement or card, I was told I owe money. Then I was told that the account was sent to collections. This was unbeknownst to me because I had been paying on the account. Then I was told that the account was charged off but the codes in their system are wrong. And last but not least, I was told that collections returned the account to the creditor because of possible fraudulent use. Now I don’t know what to do. I was told I have to sit and wait until they mail some forms to me. Why did it take a phone call from me to ask about the account for them to begin the dispute process when they should have told me 3 years ago that they may have detected fraud.

13 The Smarter Wallet November 17, 2009 at 7:15 pm

@Sev,
I am not a financial advisor, so I am not really qualified to give out professional advice. Anyway, I can try to help by giving you my thoughts.

I wouldn’t panic until I have all the info in order. Contact your creditor or credit card company and find out what their problem is. Did you call their billing department? I would give them a call and find out what it’s all about. If they are sending you mail, then wait for it so it can be explained to you.

If you’re still having problems with the card company, and you find that this is a legitimate problem then visit the FTC website here. This site may help you if there is fraud or identity theft involved.

It sounds to me that there was a misunderstanding somewhere and that you haven’t received the full picture yet. Without the full picture and full communication, it’s hard to know what to do next.

Anyway, you’ll need to dig up more info before you get overly worried. So go to the root of your concerns and reach out to your creditor and get the full story.

Best of luck
The Smarter Wallet

14 Jessica December 20, 2009 at 2:32 pm

This summer i had great credit maybe 740…but since then I’ve dropped down to a 619 cuz of a hospital bill that i’m now paying off. How do i build my credit back up..i only have one credit card and i don’t know what to do..

15 keri December 28, 2009 at 7:56 pm

I have very bad credit, i have two repos and a good bit of accounts in collections. I’ve paid a few off and in the next few months will agree on a balance on the repos and pay them off. I don’t want to make payments, I just want to be done with these accounts. I would like to purchase a house in the near future and get my life on track. Is this the right way to go? HELP!!

16 Kaye Swain January 7, 2010 at 9:29 pm

Thanks for some good tips. It’s always vital to keep your credit clear for so many reasons, including being able to buy a new home when it’s time to move. :)

17 Brandi January 8, 2010 at 12:52 pm

i have a large amount of debt that state they will fall of after this year however i still have several major items that will show on my credit report such as a school loan that i had defaulted on (it was sent to another office and have been paying on for several months) a judgment that i will be paying off immediately and several charge off credit cards several of which i have an agreement with and will be paid off this year once those are paid off i will begin to pay on the remaining few however i dont know how these will affect me will they still reflect badly on me once paid since the credit cards were charged off, once the the judgement is paid in full and how will the school loan reflect. also how can i improve my credit score i am wanting to buy a home possibly next year but i really need to get my credit score up and understand how things will reflect and what i need to do.

18 Tammy January 8, 2010 at 2:12 pm

I am trying to increase my credit score and establish good credit. I have reviewed reports form all three credit reporting agencies. After reviewing my reports, I settled all of my debts. How long should I wait after paying all of my debts to dispute derogatory accounts that have not been accurately updated?

19 Sandra January 13, 2010 at 6:39 pm

Hello,

I have 2 debts in collection right now.
I intend to pay them in the next couple months.
My question is, after those are paid off, how can I repair my credit?
I have good credit so far, and all my loans are being paid. One of my cars will be paid off in March, will it make my credit better even though I have 2 bills in collection?

Please advise.

Thanks
Sandra

20 Laurie January 16, 2010 at 8:14 pm

I just got my credit report and I’m not sure how to read them. I was thinking about consolidating all my debt into one and pay that off but I was told that will not help my credit. I got into debt because of a loss of job and trying to find a job now a days but now that I finally got back on my feet I’m about 20 grand in debt and feel like I’m being pulled under. Should I pay one at a time little by little or would consolidating be my best bet?

21 Hilary January 21, 2010 at 7:53 am

I am separated from my husband and we have a mortgage in both our names. He stopped paying it and I would never be able to afford to pay the payments; therefore we are now 60 days late on the house. I am sure it will be foreclosed on and my credit score is already impacted (and terrible, I might add).

How can I rebuild after that? What happens now?

22 VitaminA February 24, 2010 at 5:28 pm

This doesn’t say anything that helps me understand how to build up the credit after I’ve paid folks off.

I have paid 95% of my debts, have no credit cards, no auto loans and haven’t even applied for the past year or so. I’ve got less than $5K in debt, and that’s from a current student loan. I’m still in school and it’s not due to be paid for a couple years. So it’s not in negative standing.

What I think is a load of crap is that I’ve paid folks off, have zero balances on every account, have whittlled it down to 4 accounts, 2 of which are current and in good standing, and the two remaining “negative” items are collection accounts with zero balances that were left over from the ones I paid off. I don’t owe them anything. There’s nothing to negotiate with them. I can’t write a cease and desist letter, because they’re not collecting – as I don’t owe anything.

I feel good that I don’t have a ton of actual debt. But I can’t get new credit because, even with so few accounts and little debt, and no more negative balances, my score is still in the toilet. It hasn’t budged much since I started this ordeal 5 years ago…I had 10 negative accounts and managed to pay every one of them or dispute those that clearly weren’t mine.

Even with that effort to put things right, I STILL have a credit score hovering at 550. This is a load of crap. What’s the incentive to pay folks off, if you’re only going to have a negative credit score anyway? Even if you pay them off, they’ll still report you to the bureaus. And even if they they don’t report anymore, it will put you back in a place of having too little credit, even if you have student loans or other accounts in good standing.

What’s the use? This is a load of bull. There’s no way to fix it. I did my part. The creditors and credit bureaus aren’t doing theirs. I wish I could report them and give them a negative rating so they can’t get bailed out by the government or other banks anymore.

23 Corey Thornton March 5, 2010 at 5:23 pm

i need help with rebuilding my credit.

24 Brandi W March 7, 2010 at 6:20 pm

Hello, I dont have “bad credit” but i would like to see it improve, so i may buy a house in the next year. i currently just paid off all (3) of my credit card bills (never late, always paid more than min) but the balance came to be right about $2500-$3000. how long will it take to be on my credit report, and how long much will my score go up? thanks for any advice.

Brandi W

25 suri March 18, 2010 at 6:46 am

My score is 543. I need to build my credit more positive. how to I begin? Were can I apply & get approved for credit?

26 sonny March 18, 2010 at 1:56 pm

I have been slacking on paying my card bills for probably 7months. But I started paying more than the minimum payments and I have been making payments on my 3 credit cards twice a month and paying more than the regular amount both times. If I keep this up and later get one credit card and pay it off after I make large and small purchases, do you think I will boost my credit score and report since I am only 21?

27 The Smarter Wallet March 19, 2010 at 7:53 am

For those asking how to build credit — I just wrote about it in the article. The tips laid out should get you started in the right direction.

28 Pam March 23, 2010 at 8:20 pm

I am out of bankruptcy 2 years now and have had a personal loan (secured) that I paid off, a car loan (paid off) a new car loan and one credit card. I was employed then laid off for 3 months and paid my minimum for that time period, then got a new job and paid the credit card down to under 25% of the available credit. The day after I did that, the company reduced my limit to 300 above the new outstanding balance causing it to be over 50% again. They “said” that I had delinquencies and an unsecured debt ratio that was too high. I pulled my credit two weeks ago and have no such delinquencies and the ratio on the one credit card was as I stated above. What I do see is several inquiries that I did not request and cannot get the credit bureaus to eliminate those. The credit card company asked that I send the credit report — I did and they said they wouldn’t change the limit. I don’t understand what they’re doing. Any help would be appreciated.

29 mpower3o2 March 24, 2010 at 10:25 am

SO.

I have paid everything off that was on my credit. I was able to get some stuff taken off the report that was not supposed to be on there as well. Thing is, all the items that went to collections still show up but say they were paid off in settlement for less. My score did jump up pretty high, but I’m in need of building my credit up. I can’t even get a 1k credit card from my local financial institution that I’ve been with since 2003.

Any suggestions on what I should do?

30 The Smarter Wallet March 24, 2010 at 9:19 pm

Did you try the secured credit cards we suggested in the article above?

31 Robert June 25, 2010 at 7:39 am

My life in the past has not been so great and this has led me to have really bad credit. I am trying to face up to the music and fix what I have done to my credit. Do I pay what I owe, file bankruptcy or since it is already reported on my credit let it go. I need help on what to do. I want to clear my credit and start fresh for a better life.

32 KD July 10, 2010 at 1:49 pm

I thought I had a good credit ! One day I saw a good deal on new car and the same time I needed one but I don’t have much money for down payment…so when I saw 0.% APR I was like great! so I went in there and talked to a salesman and sound great ..so yea I did the text drive>>loved it >> after talked deal and everything come to the final point they had to ran my credit check…and came out that I don’t approve for 0.%APR/no down payment !! coz every bank that they asked,those bank denied me coz I never been ACTIVE for almost 3 years ! and load! I thought renting apartment ,cell phone ,internet bills were count as CREDIT! SO they ask me to put some down payment and in interest rate will be 17.99 rang!!! :O
I was shock! But nothing I could do just to walk a way and very disappointed..

I really want to build my credit back fast…so please help? ( I have good credit, but just never been in action for almost 3 years )

Please help…thank a lot.

KD :((

33 CATHY August 14, 2010 at 10:19 am

My credit score is 585. I’m in my last 10 months of my lease for my car and I’d like to lease a better car by June 2011. I have some unpaid debt. Under $5000. I’m starting to make payment arrangements. Do you think my credit will be better by June 2011?? How can I make sure it is?

34 MT September 16, 2010 at 7:26 am

Help!!!! Married and husband stopped making payments on house so it went into foreclosure, but before that happened he took out a second mortgage for $10,000 to buy a vehicle which was never purchased. My name is tied into both. I can’t take the financial irresponsibility, and he won’t give me a divorce. What options do I have if any to clear my name and credit from this financial nightmare, or am I just stuck?

35 The Smarter Wallet September 17, 2010 at 10:35 pm

@Every comment here asking about how to build good credit, I’ve outlined in my article above how to do it. Get a secured credit card or prepaid debit card and start somewhere. Be financially responsible for those cards and once you build a record, you may be able to apply for credit in the future.

@MT, unfortunately, you may be stuck with this. But I would encourage you to seek help from a financial advisor. Get expert services from a professional as your problem seems to be a rather big one!

36 Jillian October 13, 2010 at 12:24 am

This is a really great article… I’ve gotten some great ideas, and information about how to fix my credit and turn it around. I had no idea what the status of my credit was, took the time to look at all three reports, contacted all of the companies that I owed money to, and was able to fix about 90% of the problems. I was even able to turn two of the accounts into one secured and one unsecured credit card with a low balance that I can manage, and that will help my score immensely. The best thing I can recommend to anyone that is in trouble is CALL THE COMPANIES YOU OWE! If they know that you want to fix the accounts, a lot of times they will be more than happy to help, and they don’t yell at you or anything. Stay in contact with them and you will do great! I’ve got about 3 months to go until everything is paid off, and I’m looking to buy a a house pretty soon. Thanks TSW, you’ve really helped me. I referred my fiance to your article as well, and hopefully it can help him, though a lot of his stuff is medical judgments. :-) Thanks again!

37 The Smarter Wallet October 13, 2010 at 5:57 pm

@Jillian,
That’s awesome! I’m glad this article helped. Communication is key to finding resolution with your credit and your bills. You’ll be surprised how some of these companies can actually be helpful!

38 Stephane November 18, 2010 at 12:24 pm

We have been behind on all our bills lately and our credit is terrible. We have 2 car notes and 1 loan left out there to pay for another year or 2. My question is if we continue to pay these loans on time for the next year will our score go up even though we still have a doctors bills that have been turned in for collection. We can’t afford to pay all of them off. Also we were late so many times in a roll on the other loans. Just would like to know if I start paying on time now will that help my credit score.

39 tina December 26, 2010 at 5:31 pm

i am over $16,000 in debt and feel like i don’t know where to begin. Please help? Do I need to talk to an advisor or just start paying off most recent bills to the oldest or what. Should i file bankruptcy — but a lot of them are small bills. But I also have like $10,000 in student loans i am just now required to pay.

40 John Walsh December 27, 2010 at 1:41 am

If you are in debt, you should get a job. Live below your means and pay off your debts. Period. End of story. The recession is over. This is a survival of the fittest situation and you should just stop whining, get any job you can and pay off what you owe. I’ve done it. I had $25,000 in debt at one point but I did all I can to pay them all off. It took me 4+ years to do it but I did it. I took a job as a trucker — it was hard hard work that kept me away from my family but I was able to pay off my debts and now I’m saving up for our future. There’s really no excuse to be poor if you’re able-bodied and educated. If you have disabilities or have an illness, that may be another story, but most people are just too picky about what jobs to take. So it all goes to the immigrants who don’t complain at all about jobs — they are the ones who succeed, as far as I see it.

41 michelle January 16, 2011 at 3:00 am

I have bad credit. The last time i checked my score it was 487. So i am going through my report and plan to pay off some collections and bad accounts.But instead of it being paid off I want to make a settlement offer and have them remove it from my report as if it was never there. Would that help raise my score as least to 650?

42 caroline January 19, 2011 at 7:10 pm

i have bad credit. how can i erase that. how do i pay them back.

43 Araceli Gomez February 2, 2011 at 5:41 pm

Hi

I’m trying to rebuild my credit. I have paid all medical bills off and two of the three credit cards. All I have now is one more credit card bill and a branch line of credit left to pay. I’ve been paying everything on time. I need help — what else can I do? I don’t really want to get another credit card. Are their any other suggestions?

44 AM February 15, 2011 at 2:38 pm

I’m about $1000 in debt. I applied for a target checking card which connects to my bank account but for some reason when the cashier scanned my check it didn’t scan the first 0 from my check # so it didn’t charge me until a week later Target corporate came to talk to me asking if I purposely did something to my check to hide the zero? But now I’m charged to pay both Target & my bank back? Which I don’t understand? Which is now putting me into debt. What do I do now?

45 Dave March 10, 2011 at 1:30 pm

My son is trying to purchase a home. However, he has $2800.00 in debt that is apparently in collection. How is the best way to clear this off of his credit report and inprove his score? Contact creditors and pay off debt in total or negotiate monthly payments?

46 guy April 23, 2011 at 7:27 am

Is there a set system and routine I can follow to stay on top of to fix my credit like a 1 through 10 guide?

Thank you, Guy Q

47 Scott April 26, 2011 at 8:19 pm

Hi, I paid off all collections about. 6,000 in collections. Got 4 of the collection agencies to delete the file so about 3500 will that help boost my score? I have a joint car loan and credit card.

48 Meg May 2, 2011 at 11:24 am

I have close to 50k in debt from student loans, and about 5k in debt from credit cards all from college expenses. Now that I have graduated I am almost done paying off the credit cards but my score is still really low. I have no negative marks on my credit history and truly only 1 late payment in the last 3 years. Does having student loan debt lower your score dramatically? I pay off more than the minimum every month and it hasn’t helped. Any ideas?

49 Jeff May 24, 2011 at 9:34 am

I had a $25,000 loan that I settled with bank for $7,500. Will this still affect my credit now that the bank is satisfied? If so how can I fix this issue?

50 needhelp July 7, 2011 at 2:39 pm

I have tried to apply for secured credit but I don’t get approved. What other options do I have?

51 Lindz July 26, 2011 at 7:52 pm

When I was 18 I did what most young teenagers did…applied for a credit card. I did really well with making purchases then paying them off. However, the sooner I paid them off the higher credit limit I received and the more stupid I became. It got to where I was getting later and later on the payments and interest was going sky high. I eventually paid the entire balance off and canceled the card. However, now I can’t seem to get anyone to accept my applications so that I can rebuild my credit now that I am older and wiser. All I want is a second chance so to speak. What steps do I need to take to get back on top and into the credit world. PLEASE ANY ADVICE!!

52 Fox September 10, 2011 at 7:24 pm

Before, I felt overwhelmed about my financial situation. It is not easy to make the first step after you know you failed, but this article throws some shine and I am willing to change things around by doing the right thing. If I take care of my credit, my credit will take care of me as well. You shouldn’t depend on anything else.

53 Yvette September 19, 2011 at 7:34 pm

I have a credit score of about 530, only thing I’ve ever used my credit on is a cell phone bill that I still owe $600 dollars on since 2005, and I get collection letters in mail still should I still pay that? I can’t seem to build up my credit, the bank and retail stores deny me a credit card, could it be just because of that cell phone bill I can not build my credit? No one would give me a chance! What else can I do to build it up?

54 dan October 20, 2011 at 10:13 am

Well i Just got a judgment on my credit from a payday loan and I was wondering how bad does it affect my credit and if theirs anything I could do to remove it from my credit

55 Carmen E November 8, 2011 at 1:44 pm

Its seems like all my life I have had bad credit. I have never had credit cards. The problem is my mom and I have the same name with the exception of our middle initial. I did have two loans that I was not able to pay due to hardship. I do want to clean up my score just to have some good credit. I have looked over my report and many of these credit cards are not mine. How do I take care of this?

56 Rachel D December 6, 2011 at 8:46 pm

I just received my credit score and I am in total shock. About 3 years ago I had a score of 615 and I had been late for two months on a credit card and also had a phone payment that no one told me about, I thought it had been paid off then I got a letter in the mail from T-Moblie saying I owed them still 161.00 and it had been turned over to a collector. They never bothered in contacting me. I was able to get some store credit cards like Victoria Secret etc. I paid them on time every month. I have paid everything on time and paid all my cards off and a student loan and I could not believe when I was denied a store card and found out my score was 345!! I have paid everything better in the past 3 years then before my 615 score. I had 2 doctors bills that were from Florida that they kept changing on me that have not been paid and the reason I haven’t paid them is because they just kept telling me I owed them more with no explanations. I have not had a job now for about 7 months and told them that I could not pay what they were asking me to pay. Would this bring my score down that low? I don’t know what to do or how to get my credit back half way decent again. I feel like I am duped and I have no idea why my score is so low. That is just insane. A doctor’s bill should not have made my score so low. I did pay my cards off and canceled them, but would that make it that low? I am so upset this is just crazy! Please help!

57 Yvette January 6, 2012 at 10:27 pm

I have some creditors that I pay regularly and on time that are not reporting my payment history on my credit report. My cell phone company is one of them. What can i do if anything about this. My score is low right now due to a large debt to income ratio mostly, but I need my good pay history to reflect on the credit report too.

58 Kevin Mentink January 31, 2012 at 12:18 pm

I was wondering how I could get all of my credit cards paid? I love this website.

59 S. Johnson March 11, 2012 at 6:34 am

1) How can I gather “all” bills owed, prior to consolidating and or paying them off by way of “settlement” method. My credit report states: 8 negative accounts. I’ve heard people say that for some reason or another bills forgotten show up out of the blue on their credit report, meaning old bills never forwarded to them for payment from a collection agency or the like. You are under the assunption that you have satified your debt of the 8 negative accounts. 2) Is this practice unlawful? 3) How soon and how late is it unlawful for a creditor to report negative account(s) on your credit report?

60 Shane April 14, 2012 at 2:47 pm

I owe $2k and its in collections. I have a job now and i can pay on it. would it be better to just pay it all in full or should i ask for payments? and will it help my credit at all?

61 The Smarter Wallet April 18, 2012 at 9:50 pm

Pay it in full. The faster you do, the faster your credit can be restored.

62 fitzgerald June 9, 2012 at 4:26 pm

I have 4 accounts that went to collection and I just settled them all. I have nothing else on my credit but a car load. I am just now opening a line of credit. My score right now is a 525. How can it jump up to a 620? I’m trying to buy a house!

63 The Smarter Wallet June 11, 2012 at 10:35 am

It’s not the time to buy a house if you have poor credit. It’s best to save money for a while and to live below your means first. Remember that the only way out of debt and bad credit is to live in an “austere” way — learn from what’s going on in Europe at this time!

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