Credit Score Help?

Question

My score in Dec was 708

It dropped in January and February...to 579 on equifax (a bit higher in experian?)

In January I had opened 2 new credit cards and maxed them to almost 90%. Also I had a collection due...for 50$.

In March I paid off much of my debt...and I now has say 7-8% on each card....total debt currently is around 750$

I also paid off the collection amount. (Was this a right move?)

I was hoping to see my score jump up a bit. but the new equifax has not changed my score. Only experian has changed it to 598 (I am assumign it was a bit higher then 579 on experian in Feb.)

What should I do to increse my score?
Will taking out a loan for car installment help?

I have no other debt than the 750$....my current car is already paid for...

I did some really bad mistakes :(

Any ideas/suggestions...I will take them all

Thanks

Answer 1

first, paying off the collection account was a good choice.



second, keeping your accounts balance below 30% on each card is optimal to obtain a higher fico score.



There is no reason to get a car loan just to increase your credit score and you wouldn't get a good rate on that car loan anyways with that credit score. Just keep paying your cards on time and you will see your score go up significantly in the next few month. Make sure you run your credit score yourself and do not go over 30% on your credit cards. It takes some time for the new credit cards to affect you positively.

Answer 2

Your credit score reflects both your credit payment history and your debt level. Paying off the credit cards is a good thing. The collection account will be a problem-- it'll stay on your record for 7 years unless you can get the creditor to remove it. This is more easily done as part of the agreement to pay (before you give them the money), but there's no harm in asking.



For a good credit score, always pay on time, keep your balances low, and don't open new accounts you don't need. Long-term relationships with higher credit limits and lower balances seem to do the trick. (I've gone from a miserable score to a great score in five years. It takes patience.)

Answer 3

Applying and maxing out those two credit cards is what killed your score. Paying them down should bring your score up considerable. It might take 60 days to see that reflected.



Paying that $50 collection was good but it would have been better if you had got them to delete for payment. You might try disputing that item with the credit bureaus. Maybe the collector won't bother to verify it since it's been paid. But you may have to live with that.



When you check your scores, make sure your getting FICO scores from all three credit bureaus. Experian and Transunion use their own scoring system.

Answer 4

Every time you apply for a credit card or loan it pulls your credit report. That causes your score to drop. You want to show consistency, continue using and paying your credit card off and eventually your score will come back up. You don't want to apply for more than 6 loans or credit cards in a year, this looks bad and drops your score. Paying off your collections was the right thing to do, but it stays on your credit report for up to 7 years even once paid.

Answer 5

Never spend more than 30 percent of your buying power. Use you credit card on a regular basis (so that you build your credit reputation,)but pay larger sums than are required. If your balance is 750.00, try to pay at least 150.00 per month until the balance is less than 30 percent of your limit. Keep your payments current. Pay on time. NEVER be late. If you pay on line, schedule payment for the day before it is due. If you pay by mail, send payment at least two weeks before it is due.

Answer 6

I would suggest you stop playing the FICO game and start something else.



Read "The Total Money Makeover" by Dave Ramsey to see where I'm coming from.