I have a 560 credit score . Best things to make it go back up?

Deal Score0

Disaster in the past and now am re building .. My AUTO beacon is 561 , and my beacon 5.0 ( both on equifax ) is 606.. ATM I got my credit reports and have paid off 2 accounts ( one for 195, and one for 400 ) Is there anything I should ask for once I pay these all off? Like a receipt? email?

I am going to be taking out a secured loan for $ 1000. And paying it off within 6-9 months then taking out another after that.. I have a JCPenny card with $ 125 limit that I will use monthly and not exceed 50% of the limit.. Is there anything else I can do? The MAJOR one is a charge off for $ 6000 to chase financial .. On my report it says Account charged of or sold with the creditors statement ” Purchased by another lender” …

So is it “charged off” like it says? or are they going to see positive activity on my report and come after me again? Not to sure what to do on that one …
Good info , Thanks everyone.. I always thought when you were coming out of debt to show consistency, so thats why I was gonna try to prolong the payments.. Also it shows Im willing to pay interest, and still get everything paid.. The Chase one scares me tho.. I dont know if I should contact them , or wait and have them contact me , because honestly you all can see im tryin to do good here, but I dont have $ 6000 in cash laying around 🙁

  1. Reply
    July 21, 2011 at 2:49 am

    Any time you use more than 30% of your available credit limit on your card you are reducing your score.
    Money Magazine (this month’s issue), stated 20% of limit.
    So.. on that JCP card don’t use more than $ 25 at any time.

    47% of Americans pay their credit cards in full each month.
    These are the ones that hold the top scores.
    Never carry a balance – it does your credit absolutely no good whatsoever.
    Not sure how this rumor ever got started.
    Also, you never pay interest when you pay in full each month.

    Don’t make another secured loan – one is all you need to build up credit.
    One loan even after paid off in full will stay in your report for 10 to 20 years.
    Also, never close old credit cards that are paid in full – you want the history.
    New loans and credit cards reduce scores for the first 6 months.
    You don’t need outstanding debt of any kind to get those 800+ scores.
    ^^^ Please read that again.

    Make your secured loan and pay on it for at least 6 full months.
    Use your credit card at least once a year and pay in full.

  2. Reply
    July 21, 2011 at 3:17 am

    >”The MAJOR one is a charge off for $ 6000 to chase financial”
    >”I am going to be taking out a secured loan for $ 1000. And paying it off within 6-9 months”

    What exactly is a secured loan for $ 1,000? Secured by what? This is what we refer to in the business as “legal loansharking”!

    >”So is it “charged off” like it says?”

    Are you implying this is some kind of positive outcome? You basically “defaulted” on this!

    This isn’t going to be forgiven anytime soon!

    >”Is there anything I should ask for once I pay these all off? Like a receipt? email? ”

    Just make sure this gets recorded on your credit report on all three bureaus by the creditors.

    Actually, you’re a greater credit risk than someone who has filed bankruptcy!

  3. Reply
    July 21, 2011 at 4:06 am

    The $ 6,000 charge-off is what’s pulling you down. They’ve sold the debt at a steep discount to an agency that specialize in collecting debts. If there are collection agencies pulling your reports that will also pull you down.

    It takes 7 years from the last activity for the charge-off information to disappear from a credit report, and a slow-pay is nearly as bad as a non-payment. If you are slowly paying off the charge it will cause the information to remain on your credit report longer because that constitutes activity.

    If you are approached by the creditor and an agreement is reached, make sure the agreement is in writing and that it includes removing all reference of the debt from your credit reports. You can then challenge the information on your credit reports and have a cause of action against the creditor if they refuse to cooperate – which is not uncommon.

    Good luck!

  4. Reply
    July 21, 2011 at 4:15 am

    You need to pay all your bills on time and do not carry a balance on the any credit cards. Your credit score is, frankly, rubbish because of your charge off. Time will fix this but it will take a couple or three years at least.

  5. Reply
    July 21, 2011 at 5:03 am

    First, paying off derogatory items on your credit report will not improve your score. The damage is done and will remain for the balance of the 7 year reporting period, whether paid, settled, or unpaid. With this in mind, you may as well settle for as little as you can.

    Get any settlement agreement in writing before you pay a cent. Keep that agreement along with your payment proof, forever. Do not give collectors direct access to your bank account.

    Why are you taking out a secured loan? Installment loans build credit by making payments over time. You have to pay an installment loan for 12 to 18 months to get any real benefit to your score. Paying interest just to get a few points on your score is not smart — and no, there is absolutely no advantage to paying interest. Interest isn’t reported to the credit bureaus and has no impact on your score. Interest just takes money out of your pocket.

    Instead of a secured loan, get a major credit card even if you have to get a secured card. Use the card and pay the balance in full every month. This will build good credit history without costing you any interest.

    Use the credit card and pay in full every month. Don’t worry about the utilization. Just use it and pay it in full. It’s not utilization; it’s carrying balances of more than 30% that hurts your score. If you use 70% of your limit and pay the balance in full evey month for 6 to 9 months, they’ll increase you limit.

    As to that $ 6K charge off, wait for someone to contact you. Depending on how old that debt is, you should be able to setttle it for 25% to 50%. Lump sum gets the best deals, so start saving up.

    You will need at least 24 months of consistent, on time payment history to see any improvement in your score.

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