What is the best way to fix my credit (yes I've paid all my bills) but my score is still to low?

Question

What is the best way to fix my credit (yes I've paid all my bills) but my score is still to low?

Answer 1

To raise your credit score you need to do two things:

1 - add positive things to your credit records.  Such as paying your bills on time!

2 - Remove negative things from your records.  These may be mistakes made by the credit report companies or bills you haven’t paid!

If your problems aren’t too bad or too complicated than you can do this yourself.  This review site gives you e-books to explain the process and guide you through it:

<>http://www.onlinebestinformation.com/cre...

if your problem is complex - or you just don’t have the time or patience to do it yourself then you will want to use a credit repair company.  This review site will guide you to the three best companies to use:

<>http://www.onlinebestinformation.com/cre...

Good Luck!

Answer 2

http://www.myfreecredittips.com/creditti...

Here are some ideas.

Answer 3

You need to use credit wisely.  If you borrow money for income-producing things, the debt is self-liquidating and productive.  If you borrow money for consumption, it just costs you more money, and if you cannot repay it, it negatively impacts your credit.

Example: if you buy a computer and use it for a biz at home, say freelance graphic design, the income pays off the loan + interest.  The 'puter "pays for itself."  If you buy the same 'puter and use it to play computer games, there is no income from use of the 'puter, and you need other revenue or income to pay the loan + interest.  This puts you at greater risk of not being able to repay the loan.

You need to borrow wisely and commensurate with your income level, and make sure it is always repaid on time.  High-FICO score people carry quite a bit of debt as well as have high income, and payments are always made on time.  FICO is a problem because it rewards indebtedness, but only if you pay it all timely and consistently.

If you have a very clean credit report -- no negatives whatsoever over the 7-year period reported -- but not much debt in relation to income, I would not worry about the FICO # so much.  If you do need a loan, emphasize to your lender the very clean "negative-free" report PLUS your low debt-to-income ratio, which demonstrates your ability to take on more debt more safely than the typical borrower at your income level.

If you have just recently repaid old debts or cleaned up arrears, it takes time to rebuild the score.  Even tho the negatives are paid in full, the negatives are still on the report and still reducing FICO.  Keep paying everything on time, and they will eventually "drop off the radar."

Answer 4

What you have to understand is what makes up your credit score:

1. Payment history- 35%

2. Total debt owed to avialable credit ratio-30%

3. Length of time establishing credit-15%

4. Types of credit established-10%

5. Inquiries and New accounts-10%

With that in mind, this is some steps that you should do in order to get yourself in a better financial position to rebuild your score:

1. Open a checking and savings account if you haven't already- while this won't directly affect your credit score, it does many things. It re-establishes a relationship between you and a financial institution, which by being an customer in good standing, could help make it easier to get approved for credit cards and loans. Most importantly, by opening a checking account

it gives you the single most powerful tool in building credit, to help pay your bills on time, especially if the bank offers online billpay.

2. Gather ALL your credit reports- It's important to know exactly what's on your reports. A lot of times, people believe that their credit is so bad, that they don't bother to check their reports for mistakes, and trust me, mistakes DO happen. The credit bureaus don't get paid to be accurate, they get paid to report. It's important that you gather reports from all 3 agencies to determine not just who and how much you owe, but to make sure that what's on there is even correct. If you do happen to find something that you're sure is not right, you should dispute with all 3 agencies, they all have an online dispute feature in which you can dispute the item. Once you've made sure that there's no inaccuracies on your report, then you should arrange your debts from most recent and lowest amount to oldest and highest amount. Debts that are newer than 2 years are hurting your score the worst and should be handled first. What you should know that just paying off debts, especially collection debts will not help your score. A "pay to delete" or "deletion payment", which is a payment in exchange for removing it from your report completely. I posted several links that explains this more in detail.

http://www.creditinfocenter.com/debt/set...

http://www.creditinfocenter.com/debt/neg...

http://www.creditinfocenter.com/debt/Can...

http://www.creditinfocenter.com/debt/Act...

http://www.creditinfocenter.com/debt/deb...

If you're sucuessful, this will help your score.

3. Open new credit- I had mentioned in #1, about opening a checking and savings account with a bank or credit union, I'm going to tie that in with what I'm about to say. Some major banks (Bank of America, Wells Fargo, USBank, Orchard Bank) and some credit unions offer secured credit cards, which are credit cards that require a deposit to establish credit. Whatever you deposit would be the credit line, for example, if you deposited $300, then your credit line would be $300. The deposit isn't used to pay for what's purchased on the card, you would still need to either pay in full or make monthly minimum payments. The deposit is used only if the account becomes delinquent and goes to collections. A couple of good things is that you can increase the credit limit by adding to the deposit, which can help your score because it creates a much needed cushion between the total debt that's owed and the available credit, and also the deposit is sometimes linked to a savings account which earns interest while you're building credit, so the deposit isn't just sitting there. A good way to build credit with the card is to make small purchases ($20/month max) and pay it off on time every month, while adding to the deposit. Usually after a year or so, of paying it off on time, the card either converts to a regular card or it's upgraded to a better card, and most importantly the deposit isn't needed anymore and it's given back. My suggestion would be to open another secured card and repeat the process or open 2 at a time, which would speed things up. If you make small purchases, pay it off and increase the limits, that will really help your score. In the end, you'll have 2 credit cards with decent limits and an emergency fund from the deposits.

4. Enroll with PRBC- PRBC is America's Alternative Credit Bureau, providing a helpful service to the over 50 million people with limited or no credit history. If you pay your monthly bills on time, PRBC can help you build credit to qualify for a mortgage and better interest rates.On-time payments for the following bills are not reported to the traditional credit bureaus:

Rent

Cable

Phone

Daycare

Insurance

Electric

Natural Gas

Cell Phone

The only time your payments for these bills are reported to the other credit bureaus is if they're missing or late.With PRBC, your on-time payments count. You build credit for paying your bills on time, even if you have no credit history. PRBC has teamed up with Fair Issac, the creators of the FICO score to introduce the FICO expansion score which helps people build credit. Here's a link that explains more in detail:

http://www.fairisaac.com/fic/en/product-...

In closing, just a few more things to keep in mind.

-Don't spend more than 30% of your combined available credit on all your cards.

-Only apply for credit when necessary.

-Pay on time

Hope this helps...

Thanks for reading and...

Good luck!

Answer 5

Time.  You need at least 24 months of consistent, on time payment history to see an improvement in your score.  There are no quick fixes.

If you are carrying balances on credit cards, pay off them off.  Carrying balances of more than 30% of your available credit limit hurts your score.  Paying it off will give your score a quick boost.

Answer 6

Your score is bad because you didn't pay a bill. There's no way to recreate or rewrite history, no matter what you've heard. Just live below your means and take care of your business.

Answer 7

I actually have filed bankruptcy (7 yrs ago) when I couldn't keep up with my bills. Afterwards, my bills were under control, but my score hit rock bottom as it should have. My attorney told me that having a credit card to use for gas, groceries, etc...things you would normally just pay for...you should use this card to pay for them, keep a low balance at all times, and pay more than the minimum required payment each month. So for example if you charge 200 dollars in a month, make a payment of 175. Keep things in financial control, but at the same time the card companies report your activity every month as long as theres a balance. This has a very positive result with increasing your score. Sometimes normal bills such as electric, phone, water etc just don't have enough positive impact. But boy they don't take long to have a negative impact if you get behind. Trust me it's a SLOW process, but after 7 years, I've climbed back up in the 700's. Check your credit report, bad things remain for 7 to 10 years, so if there's any old lingering delinquent accounts you can afford to try and take care of, that helps as well. Good Luck!

Answer 8

get a credit card, and make monthly payments on time, that will bring up your score.  dont pay the whole thing off right away...they need to see that you can make regular on time payments.. and if u dont want a credit card, get a small loan, same principle