Someone told me to take out CD secured loans and pay them back and to do it over and over. Are there any other tips like this?
manage debt responsibly
pay your bills on time
there’s no “magic” formula.
I take it you don’t have bad credit just no credit. I had a similar problem when I got started investing. I made a lot of money and as such I started paying off older high interest credit cards and reducing my debt to allow myself to buy a lot of houses. My mortgage broker said my credit score was 590. I asked my CPA what was up. He looked at my credit report. I had no lates no collections no negatives but I had no score. Then he asked me if there was more to my report. I said no that was all of the report. He said I had the rich man’s problem. I was going almost all cash which created a thin credit file. I just didn’t have enough credit (mortgage, and 3 credit cards). That is like a new kid right out of school most of them at least have a car payment. What he said is to get a variety of credit. Some cards, some bank loans, some installment loans and pay them religiously. When I would go into Lowe’s and buy $1500 worth of materials I would write a check. He said charge it and pay the credit card bill in 2 installments that kind of thing. My score has been no lower than 660 since then. What I have done is to go on every website of every company that I have credit with and scheduled minimum payments. That way I can never have a late payment. Every month I actively pay the accounts I want to bring down or pay off. That prevents me from overlooking an account.
I have bad credit it is all old paid negatives. They all come off my report within 3 years. I am now trying to establish good credit at this time my three major credit scores are 580, 602, and 620. I want make them better.
I have to find the number but when my loan broker would advise her clients to “OPT OUT” through the three credit bureaus. But clients would call this number and get their names off of credit card offers, etc. Their scores would increase by 20-30 points in most cases. this little increase would get some of them to prime FICO scores.
Then she would actually analyze their credit with a software program that would tell them how to get erroneous information removed. Which items to pay down or leave alone. sometimes when you pay off an old account it becomes reactivated and can actully hurt your score. How to balance your DTI. Having a savings account helps.
Increase your good credit as you said by getting a loan based on your savings and paying it off as agreed. Credit grantors would usually use your midscore.
when I find that opt out number I will PM you.
Good Luck
Thanks.
The opt out number can be found on any credit offer that comes through the mail, usually in fine print at the bottom/end of the offer.
Choosing to not get offers (opting out) will not affect your score. Creditors that look at your score to offer you a credit card/loan offer use a ‘promo pull’ which does not affect your credit score and which does not appear on your credit report unless it’s YOU that pulls it. So I don’t see how that choosing to opt out would increase your score.
You can get erroneous info removed simply by going to the associated website (equifax, etc) and either filing online or call the listed number. If you pay off something that has already dropped from your credit (been over 7 years) then yes, it could actually hurt your score, at least for a bit.
To increase your score at this point, the main goal should be to get more current and active accounts. Currently active accounts will count much higher to your score than older accounts, either good or bad.
In most cases, credit grantors will actually only use ONE of the three major bureaus scores to base their decision to loan. In fact, mortgage loans are usually the exception. Best course here is to see what most lenders in your area use (here, for example, it’s equifax) and make sure that that score is your best score.
Your current scores aren’t that bad, really. In fact, you should have no problem getting some funding from places like American General, CitiFinancial, etc. Borrow $2-3K, make 3 months of payments or so, then pay off. It’ll cost you some in interest, but should be a big jump in your score.
Likewise, get a couple of CC’s, even a Lowe’s card or simliar and make some monthly’s on it, before paying off.
Raj
I have 5 credit cards. I was going to cancel 3. Should I keep them all?
Do NOT cancel any open accounts. It will negatively affect your credit.
If you have 5 cards, great. Use only 2 and keep the other three for emergency uses. The key with revolving debt is to not get over 50% of your max debt at any one time.
Raj
Thanks.
I’m sorry but you are wrong on this one. Went to a seminar had a seminar about credit card offers/getting more people qualified for loans, etc. and the feeling is that if one is not tempted to get credit cards than one is being more responsible. there are no more soft dings on your credit.
I learned a lot that I did not know (i.e.)
The credit bureaus actually SELL your name to these companies which was something that made me angry and
prompted me to let all my clients opt out.
We had several of our clients who were on the line try this process and each time the credit score increased. One of our clients increase his mid credit score by 40 points without anything else being done.
Put him into a prime loan.
We analyzed this clients FICO and his credit report and the only difference was he opted out and with 6 weeks his score went up. We looked at several of our other clients and the same thing happened.
I don’t have any vested interest in this information except what I experienced. So you may choose to use it or not.
You are right about keeping the credit cards open
so for whatever it is worth, I promised it so here it is
If you opt out from the credit bureaus, it can sometimes raise your score 20-40 points
Go to OptOutPrescreen.com or call 888-5-OPT-OUT (888-567-8688). These are the credit reporting industry’s opt-in/opt-out resources, which stops the four credit reporting agencies (Equifax, Experian, Innovis, and TransUnion) from selling your credit information to direct marketers.
Soft pulls on your credit report DO NOT AFFECT anything. When you say they did nothing and their credit improved let’s not forget that during this time of doing nothing they were paying their credit bills down reducing utilization %, getting more ontime payments in the system, and their credit history length was getting longer…that’s why their scores went up.
Definition from creditboards.com- “Soft Inquiry” - inquiry not seen by others and not counted in your score
Also, one thing that can greatly improve a score short term is an inquiry (or two or three) falling off your report. I had 2 fall off from 2 yrs+ back and my score jumped over 20 points in one leap. And that is also something that happens automatically without doing anything.
Get a copy of your credit reports, go to the 3 CB websites and dispute every single one of them. Unless I am mistaken, the creditor has 30 days to respond…they apparently get pretty busy and forget to or just decide not to. At that point that debt is removed from your credit file. I can not guarantee this will work but it has for myself with some old stuff to take my decent credit score up to a very respectable score and I have a couple friends that have done the same…like I said, no guarantees but I have seen it work on some of the debts I had.
Of course there is still the one…a hospital bill…$540 from a hospital where the only time I have visited the place was to see a sick friend…apparently they charge for visitation…hehehe
Good Luck!
Filing the dispute is the FIRST and easiest way to improve your score IF there are errors (leave the ones that are in your favor). You must do it for each credit bureau (transunion, equifax, experian) It takes around 30 days and your credit will be ON HOLD during that time. You will not be able to get credit for ANYTHING while your credit file is being disputed!
Once done, some of the inaccuracies will go away. For the rest, you will have to call whoever the account is for… and call, and call, and call
Check your credit often. Every 6 mos is good at a minimum. I use truecredit.com. It covers most everything for all three bureaus. I also pay for the 3 credit scores. HOwever, the MOST accurate way is by paying each bureau for their reports individually. By the way, you will FINALLY get something off for a while and then WHAMMO it appears again and you have to call the company again. Keep records, names, phone numbers, what was said. You will need it!
Other than that, keep all accounts open. They look at the amount of credit you have available and also the % of that credit you are using.
Never be late! NEVER let anything go to collections. Open different kinds of credit (credit cards, auto loans, etc) They like to see variety. Oh, and don’t pay off your cards each month. Keep say a $10 balance on it. That shows you can make PAYMENTS on time. They don’t care how much the payment is, just that it is a payment.
I know a LOT about this. My BK was discharged 7 years ago and I STILL have problems. I have been WORKING ACTIVELY to make it better for 7 freaking years! No late pymnt, but did get screwed with a collection for something I didn’t really owe… LONG story.
Mortgage companies do use 1-3 of the credit bureaus. Also, mortgage companies EACH have their own company software that valuates your credit dings different from the bureaus. That is why you can pull your credit from the bureaus and then pull it the same instant from the mortgage company and get way different scores. The score the mortgage company comes up is all that matters though.
By the way, YOU can pull YOUR credit report every single day if you like. It WILL NOT HURT YOUR CREDIT. The only dings you get for your credit being pulled is when SOMEONE ELSE PULLS IT. The exception is companies that are pulling reports to prequalify you for credit cards WITHOUT your asking them to do it.
Best of luck! Be dilligent!
Could somebody please explain what opting out means and how it increases your credit score.
Thanks
gregg
it does not help your credit score. It means that creditors will not look at you report without your requesting it.
It stops you from getting junk mail credit offers. Now I don’t get any, used to get AT LEAST 1 per day…mostly Crapitol One.
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Go to creditboards.com Those folks specialize in credit.
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Soft pulls do not effect FICO scores. The passage of time does.