What to do to improve my credit???

Question

I am 21 years old and when I was 18 I thought it would be cool to get credit cards because all my friends had them so I thought I should have them to (because I was young and dumb)... well because I was so "cool" I manage to wrack up about 3,500 dollars in debt right before I turned 20

I made some stupid mistakes like paying my payments late or not paying them at all (missing 1 month payments), But for the past 6 months I have been doing better and paying everything on time and paying much more than the minimum balance. I am down to about 1,500 dollars of debt and hopefully will be out of it all in the next 3 to 6 months...

I just want to know is there anything extra I can do to hopefully improve my credit? or raise it?. My car has been paid off for 3 years (never was late with payments) and I rent my apartment so i really don't own anything. any tips to help me start now would be great!!!

Answer 1

Hey, I know the feeling. I was in the same boat as you once. The good part is that now you know, and you didn't let it get too out of hand like some people that are twice your age. I work at a credit card company as a credit analyst and underwriter and throughout my career, I've seen it all when it comes to credit; the good, the bad, and the downright UGLY. But again, the best part about it is, that it doesn't have to stay that way, depending on the person and how much they're willing to change it. And it looks like you're one of those people.

Some things that you can do to help yourself right now, would be to continue to pay everything on time for at least the next year and a ½. Your credit score and history is affected by anything within 2 the past 2 years. So, if you've had any late payment during that time, you're going to have to make at least 2 years worth of on time payments to make up for it.

Once you do pay the cards off, instead of cutting them up, make SMALL purchases ($20/month max) and pay them in full every month to continue to build credit by creating minimal activity on the account without going into debt. Also once you've gotten them paid down, and making small purchases and paying those off, request for line increases periodically. This helps your score because it improves the ratio of available credit to total debt owed.

Your car (depending on how and where you purchased it) could possibly build credit as well. If you financed it, then more than likely it has reported on your credit, as long as it was through a bank or credit union and not one of those "tote the note" places.

Some more tips in general,

If you have a checking account, use the online billpay feature that they offer. A lot of people are not aware how much not only online banking, but online billpay can help, especially if you can schedule payments every month, as long as you keep an eye on the balance to make sure that funds are available. It's like having a personal assistant writing checks and mailing them to pay your bills for you. Once you get a particular system down, it can really spoil you. But the best part is that having piece of mind that you won't be late on any of your bills, which in turn take care of your credit.

These are just a few things that you can do right now, the best thing is that credit is designed to be used over time, and with you being only 21, time is definitely on your side!.

Hope this helps, thanks for reading, and most of all GOOD LUCK!

Answer 2

There are three major credit reporting agencies that you should contact and get a current copy of your credit report.  Compare what's there and make phone calls to get rid of exsisting information that is null and void.  Make sure that the information is current and you are in contact with the agencies to help you get rid of information that should not be there. You will still have to wait a couple of years before the positive information catches up but stay on top of it/

Answer 3

although payments made timely are the best way, there are a few more things that can help.

They look at how much credit you have used VS how much you have available. So ask you CCArd company if you can have more credit (But don't use it) or get another card.(again, pay it off each month)

Also, the length of time you have credit open helps too, so don't close out the card you opened first.

You are doing the right things!! Keep it up.

Answer 4

You are doing the right thing now.  Get caught up current on all accounts and make your payments.  As time goes by, that "good behavior" will overshadow your previous "bad behavior" and your credit rating will improve.