If you have taken care of all of your debt, how long until you have good credit?

Question

If you have a past due, phone bill sent to collections, 3 closed credit card accounts, over draft fees and two closed bank accounts, a doctor's bill, and a late library bill, and you have taken care of all of these, what kind of credit rating do you think you have, and is it terrible? Is it likely that anyone will offer you credit? How long after each and everyone one of these items has been taken care of until you can have great credit?

Answer 1

Debt isn't the only thing that determines credit score - so clearing it won't give you a good score. You need open, active and current credit to increase the score. Here is some information on that:

The first thing to do is to find out what's in your credit file and credit history. Sometimes errors can be reported in your credit history or there can be some reports that you didn't realize would show up or that you had forgotten were there. Make sure, if you've had a different name or lived in a different location, that those past records were merged with your current record. Also, if you shared accounts with a former spouse, ask the credit bureau to list these accounts under your name as well. Many will perform these services for a small fee.

If you do not have a credit history (or have a sparse one), you should start to work on one immediately. First, you must have a steady income and should live in the same area for at least a year. Then you can try applying for credit with a local department store or applying for a small loan amount from your bank. Often a local department store or bank will approve credit applications when larger ones will reject them due to a lack of credit history. Most importantly, before you apply, ask if they report credit history information to credit bureaus. If at all possible, you should strive to obtain credit that will be reported, as this will build your credit history.

If you are rejected ask for the reason why. There are often other reasons for a denial than lack of a credit history. For instance, your income may not meet the minimum or you may not have worked at your current job long enough. You can usually solve these problems with time or by simply applying with another creditor. In almost all cases, it is best to wait at least 6 months before making each new application because credit bureaus record every inquiry about you and inquiries can damage your credit by making it look like you are trying to obtain too much credit too quickly.

If you still are having problems developing credit, you may want to ask a person who has an established credit history to act as your cosigner. A cosigner guarantees that you'll pay and that if you don't - they will. This makes you look like a better risk for creditors. Once you have paid off this debt, try again to get credit on your own

Answer 2

If you have already paid them without negotiating with them to delete the account information from your credit reports, then you might want to try to do what is called a "goodwill deletion" request. You basically ask them to remove the account information since the bill is already paid.

If you have not yet paid these accounts, then the question is whether you have the money to pay them or not.

If you have the money to pay them, you need to contact each of them in writing and ask them to do a pay for deletion agreement. You pay them money and they remove the account from your reports.

If you do not have the money to pay them all, try to negotiate with them to get into payment plans.

Do everything in writing and stay off the phone. They will lie to you.

If you get these account deleted, your credit score will rise significantly in short time. If you do not get them deleted, it will take about 2 years for them to stop killing your score.

You will still have trouble getting credit unless you get deletion.

The source cited is a site I run that has free information on how to repair your credit.

Good luck!

Answer 3

It's hard to have great credit unless you started off with responsible use, if you've got marks on your credit report on all that, then it'll take at least 7 years to wipe them off your record, and at that point it'll be neutral, not good. You might be approved for credit cards, but with high interest and low balances. If you use it right, then it'll help you start building something good up. And there's always secured credit cards in which you put the money up as collateral.