Questions About How To Improve Credit Score

Robert asks…

How to improve credit score with first credit card?

Hi there. I have just received my first credit card. I struggled to improve my credit enough to finally qualify for a card. I had to start with a bottom of the barrell card, however, as my score currently averages 600. This card has a high APR, high penalties and a yearly fee. I am looking for advice on how to use this card as a tool to improve my credit. I've received a lot of conflicting information.

admin answers:

I used to work for a credit card company..

Most people think that if you pay your credit card purchases in full, you'll have a higher score.. But actually, credit card companies prefer to give higher scores to those who leave out a few amounts that would earn interest.

For example, your credit card bill is $50 and you pay that in full, it means that there's no interest.. But if you only pay, say around $30.. The $20 that was left would incur interest, and card companies like that.

Ruth asks…

How long to improve credit score?

My husband and I are trying to purchase a house. He has a decent salary and we can afford it. I pulled our credit yesterday to see that his credit score is a 585?! We have had all of our major debt paid off for 12 months now. There is one credit card with a nearly maxed out balance (but still only $1000) and a medical bill in collection for $60. Our new plan is to pay down the credit card to $300 over the next two or three months and take care of the $60 debt. How long will it take for his score to improve? We'd like to wait for it to get better before we apply for a loan. Any other credit score raising tips would be appreciated!

admin answers:

Paying down the credit card is definitely a good thing to do. Ideally you should get all of your credit cards under 30% of the total available credit.

But the thing that is causing you more problems is the collection account. When talking to the company about the medical bill. Be sure to negociate with them to have them actually remove the item before you pay it. Only when they send the agrement to you in writting you should pay it. Once they have the payment, and they remove it you should see a boost in your score. As the score only takes into account what is currently on your report, so once it is off the effect is immediate.

Not knowing what major debt you took care of and how much of a negative that is having it is hard to say how much it will improve when you take care of these two issues.

James asks…

What is the best way to improve credit score if I have no credit?

I am debt free and have been since my bankruptcy over 12 years ago. I recently looked into getting a mortgage, but was told I can't get one because my credit score is too low. I went on freecreditreport.com and got a copy and there are some things on there that are not identified, and I don't know what they are. So, how do I have those removed? I am assuming that will improve my credit score so I can get a mortgage. Advice is appreciated!

admin answers:

The first thing to do is dispute the items on your credit report that aren't yours, so that they can be removed- that will help you out a lot right off the bat. Contact the agency you go the report from- experian, transunion, equafax- and they will tell you how you go about disputing the items.

The next thing I'd do, is get a secured credit card. Basically you lock away a set amt of cash, and that is your credit limit. Then you use the card, make the monthly payments and that will help your credit score too. Usually after about 12-18 months of on time payments, you'll see some positive credit improvements. WaMu has a unique one in the fact that they give you montly access to your credit score, so you can actually see it going up. You can apply for that card in any Washington Mutual bank- the card is $300-$2000.

Susan asks…

how long to improve credit score to 760 or above?

My credit score is 662. I have around $7,000 in credit card debt, which can be paid in 5-6 months. My husband's car will be paid off in a couple of months. I just purchased an used Audi, which will be our only debt. How long will it take to improve my score to 760 or above in order to buy a house in March?

admin answers:

We've gotten our credit score up from 630 a year ago to 692 now. Getting rid of that credit card debt will be a big help. If you haven't already, get a copy of your credit report and make sure there isn't anything else you missed. And why do you want a score above 760? That's really good, but you could get a mortgage with a lower score. Income, debt, length of credit history are all factors taken into consideration when getting a mortgage. And the down payment. If you have one, your rate will be better. Get pre-approved now and see what you can get.

Linda asks…

help me make payments to improve credit score what should i do?

ok so i have 3200 debt on a cc with credit limit of 6000. an other cc with balance of 160 and credit limit of 300. and other with 1300 and a credit limit of 1500. i have 1500 cash right now how should i devide the payments... please help me but the whole purpose is to improve my credit score.

admin answers:

You and many others have the same dilemma--how do you pay off your bills and increase your credit score.

If you have $1500 cash, pay off the $160, make the minimum payment on the 3200 you owe, and put the rest on reducing your 1300 debt. This will increase your credit score, since the credit card companies will see your debt to available credit limit has increased (that means, your credit card limits are much more than your debt on those cards).

Then, pay off what's left on the 1300 debt (presumably about $50). Then pay down your $3200 debt in large chunks. IMPORTANT: always make at least the minimum payment, and don't be late making your payments!

After that, request an increase on all of your cards on the same day (actually, if it's within a 14-day period, that's fine, but all in one day is best). Then, put about $100 on each card an pay it off in 3 month's time. Do that several times a year, and your credit score will increase. Also, about every 6 months, ask the CC companies for an increase in your credit limit. (If you have CapitalONE, that sucks--'cause they don't give you increases when you request them--they do it on their own schedule.

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