O/T best(easiest & smartest) ways to boost credit.

[Knight9]

Let's say you're hovering in the 590-620 range which is POOR but not considered VERY POOR. Apparently 640 is when it becomes "FAIR".

What do you guys suggest to boost it thoroughly and effectively along with as quickly as possible? Also, if any lingering debts are owed on credit reports....I understand that you can call and settle them a lot of the time for a %/fraction of the total amount...but what are the steps you must take to look out for yourself? I seem to remember making sure they will remove it from your report and say that you have made good on the account. Will it help your credit any MORE if you pay the full debt (for example $650) rather than settling @ $400? ---or are they both the same as far as helping your credit?

Thanks guys.

 

[ronnieron]

yes you need to send them a letter to be signed that they will remove from credit reports once paid. you can also offer them a % of the debt from removal also.
I wouldn't offer anything without disputing it through the credit bureaus. once disputed the company/debt collector must verify to the bureau that they are in fact the owner of the debt and they can legally collect it. if they actually do not own the debt but found the debt through a skip tracer program and added it to your credit file, than you just paid for nothing. The original owner of the debt can put the same debt on your credit file later, and if they can prove you owe them, than you will need to pay them also.
So in short, dispute all debts first, most times, especially with older debts and smaller debts, the company will not bother verifying the debt to the bureau, which in case it must be removed.
there is a website that is a board like this one with a bunch of useful info, def helped clean my credit in 90 days, its creditboards(not sure if it was .com or org).

 

[Giants83]

I went through this a few years ago. Terrible credit. I had a lot in collections. It doesn't matter if you settle or pay the full amount. That only effects your wallet. First I disputed everything like Ronnie said. Then I called every collection agency and told them I know they bought my debt for pennies on the dollar and here is what I can afford to pay. I told them I'm trying to avoid bankruptcy (which then they will receive nothing). They'll counter of course and you can do the same. Make sure part of the agreement is to take it off your credit. After cleaning up my credit it only brought me up to around 660. The lack of credit held me back from there. More specifically revolving accounts (credit cards). I started with a secured one and then I got a higher interest one. And just consistently paid them off. After that only time and financial responsibility will raise your score. 4 years later and I broke 700 and started getting low interest loans and credit cards.

How collection agencies work they buy the debt for say 10 or 20 cents per dollar and the original company that you owed just wrote it off. First verify they rightfully own the debt, then bargain with them and always make sure they remove it. Start with the newest ones first and work backwards. After 7 years they get removed anyway. Paid or not.

 

[Knight9]

How do you verify that the collections company rightfully owns it?


The person I am referring to has the following on their report:


An 8,600 American Express bill AFTER $1600 was frozen/taken from their Wells Fargo Bank account almost one year ago and deducted from the approximate 10k balance on the card. This bill is lingering from the end of Jan 2013 when payments stopped on it.

A $600 bill from a Capital One Credit Card from approximately 2008. (However on his credit report, it says this was opened Feb 2014)

 

[Giants83]

Like Ronnie said by disputing it or even contacting Amex to make sure. If the collection agency did buy that debt I would definitely them you want to settle. Don't set up a payment plan though because settlement will be out of the question. Tell them you are considering bankruptcy but would like to try and avoid it. Ask them for a settlement number. Save up a few bucks less then call them back and tell them this is what I got.

As far as the capital one card goes. I'm thinking they may have held on to the debt and not reported it? I don't think they can do that though. I would certainly question that. Did it just appear on the report or has it been there since 2008?

I did so much research about dealing with collection agencies and cleaning up my credit. It took a while. I ruined my credit before I understood what credit was. Your friend should definitely spend some time googling lots of questions and reading up on it. That way he will be well informed when dealing with them and repairing his credit in the future.

 

[ronnieron]

go to each bureau website and dispute each negative tradeline(account). Does not matter if the account is yours, or that you think/know you owe that debt, make the collection company or whomever prove that they have and are able to collect on the debt.
When you dispute it through the bureau, the bureau will contact the company reporting the debt and ask for documentation(verification) to validate the debt, if they are unable to do this the bureau must remove it from your report. the bureau gives the company 30 days to get the information that they are requesting.
Also i would not pay any debt that is outside your states SOL(statue of limitations), usually 4 to 5 yrs. Bottom line is if your going to pay, you need to have a signed written agreement that the account will be REMOVED from your report, a paid collection will do nothing for your credit score. Paying an old debt will just report as paid if not removed and CAN HURT your credit score, because it will reset the date of the collection account.
Go to the site I posted lots of helpful bros over there that give you the steps and tools, letter samples ect. to get everything you want accomplished.

 

[ronnieron]

New debts will always appear, old or not, the minute you apply for new credit, mostly mortgages. These collection companies do this because they know when applying for a mortgage, most likely all debts will have to be paid and settled before they will approve escrow, so their thought is you are more likely to pay.

 

[cauthen96]

I used creditrepair.com and it was 99$ a month.. over a year I came up 100 points and they got things removed that I KNOW I didnt pay..

WELL WORTH IT!

 

[Magnolia5]

My score went up about 60 points alone just having one collection removed. Also probably not the best way but a couple small loans through my bank without missed payment helped a good bit too.

 

[Dublin]

I used creditrepair.com and it was 99$ a month.. over a year I came up 100 points and they got things removed that I KNOW I didnt pay..

WELL WORTH IT!

This ^^^

Unfortunately the best way to improve credit is clear up outstanding balances by any means necessary. Then stay current on all payments over time.

I had a short sale on an investment property that dropped me into the 6oo's over a year ago. I continued to pay all my other balances (more than the minimum) monthly and now it's in the mid 700's. Different scenario, but ultimately creditor just want to see a consistent payment history.

 

[pesty4077]

Depending on size of debt, you be surprised a BK will do for your credit. BK will cost you about $1500. I had a 703 FICO score with in 2 years.

 

[lvnp814]

1. Sign up for a credit monitoring service like freecreditreport.com
They offer the ability to dispute everything with all 3 bureaus online, instead of writing letters. You can also check your credit whenever you want with no extra cost or inquiries on your report. It's only around $20 a month.

2. Call and negotiate whatever collections do not fall off your credit report.
Set up payment plans or pay in full.

3. Manipulate your revolving balances (credit cards).
You want less than 30% of your revolving credit being used and obviously lower than that is better. So if you have a $10,000 credit card you don't want more than a $3,000 balance sitting there. If you can't afford to lower your credit card balances that much then: 1. make sure no cards are maxed out (even if it's $20 below the card limit) 2. Ask a trusted family member or friend to be an authorized user on one of their credit cards (they don't have to give you a credit card or any access to be able to actually use it) but this will report to your bureaus and show a much greater balance available (obviously the person needs to have a a large credit card for this to work.

4. Try to pay off any installment loans that you can. (If you have a small balance left on a car or motorcycle loan pay it off if you can)

You can have your score jump up over 100 points in 30 days if you have some money and do it correctly. A couple other things, avoid running your credit anywhere except for whatever monitoring service you sign up for and don't buy anything or use your credit cards if you don't absolutely have to.

If i think of anything else I will add it.

 

[pupeye]

My score went up about 60 points alone just having one collection removed. Also probably not the best way but a couple small loans through my bank without missed payment helped a good bit too.

Does paying off a small loan in one lump sum right away have any advantage or disadvantage? Does paying it month by month till its payed off have an advantage or disadvantage?

Got a small loan (1 year) for a car just to help build my credit up, but want to pay it off in a way that would benefit me best.

 

[lvnp814]

Does paying off a small loan in one lump sum right away have any advantage or disadvantage? Does paying it month by month till its payed off have an advantage or disadvantage?

Got a small loan (1 year) for a car just to help build my credit up, but want to pay it off in a way that would benefit me best.

If you don't have a lot of credit history do not pay it off early. You want to have some payment history on there. Once your credit is established you can pay things off early to avoid paying interest for the full term of a loan.

 

[Magnolia5]

Does paying off a small loan in one lump sum right away have any advantage or disadvantage? Does paying it month by month till its payed off have an advantage or disadvantage?

Got a small loan (1 year) for a car just to help build my credit up, but want to pay it off in a way that would benefit me best.

I've don't it twice. Went up more when I made payments. If it's not issue just have auto drafted until it gets pretty low then pay it off.

 

[Marvin Martian]

Paying old debts will absolutely NOT always increase your score and in fact can Lower it.. If a debt has stopped reporting hears ago you will update the "last action" date... This is my business - I deal with this every day and have for the last 12 years.. I am a mortgage banker and have personally helped clients settle at least 1,000 collections over the years.. The post above is correct.. Most agbcies pay PENNIES on the dollar for the debt.. So when you pay it there is absolutely no "Honor" in paying what the bureau says you owe.. The burea is reporti g all of the.penalties and interest anyway... I have my client look for the last communication to verify what the truly owed.. It is CRITICAL that all communication be done via fax and on the agencies letterheard and with a "wet" signature.. Message me and I will help any way that I can man..

 

[Giants83]

Paying old debts will absolutely NOT always increase your score and in fact can Lower it.. If a debt has stopped reporting hears ago you will update the "last action" date... This is my business - I deal with this every day and have for the last 12 years.. I am a mortgage banker and have personally helped clients settle at least 1,000 collections over the years.. The post above is correct.. Most agbcies pay PENNIES on the dollar for the debt.. So when you pay it there is absolutely no "Honor" in paying what the bureau says you owe.. The burea is reporti g all of the.penalties and interest anyway... I have my client look for the last communication to verify what the truly owed.. It is CRITICAL that all communication be done via fax and on the agencies letterheard and with a "wet" signature.. Message me and I will help any way that I can man..

This is true when making a payment plan. In consistently updates the last action date which did hurt my score. I found that out the hard way at first. But when I settled and paid in full, it was removed. That is what boosted my score up a little.

Paying money to any of those "credit repair" businesses I feel is not necessary. With a little research and work you can do exactly what they are doing for free. I would sign up for credit karma because it's free and you can monitor your report and score. I love there website and am on it monthly. As far boosting your score, it comes down to payment history ( which takes time), amount owed (active loans, credit card balances), length of credit history, types of credit and new credit. My score flew right up to 690 or so and kinda just started crawling from there. Now only time and responsibility will bring it up further. Credit karma was actually a good tool because it graded me in each area and explained to me the whys and hows. And you can view your full credit report unlimited and it's free.