How can I raise my credit score?
My credit score is about 540 right now. I had 3 credit cards that were maxed out. Than I had about 2-3 with some charges but they weren't maxed out. I could only pay the minimum so obviously it wasn't helping me to pay them off. Recently my dad transferred my balances over to one of his credit cards with a lower interest rate, so now I am paying him every month. I don't have a lot of late payments reflected on my credit (maybe 6 at the most). How long with it take my credit score to go back up?
Public Comments
- as long as you are paying your bills on time, that looks good on your credit report. credit cards are good if you know how to use them wisely. spend what you know you can afford to pay back. i have two credit cards, well, one, cuz the other one i haven't activated, but the minimum is $15 a month....i've been paying like $80 a month on it. the credit limit is low, and that is good cuz i know that i can pay it back. i have a HSBC card, and they report my payments every month. so, pay your bills on time, and you should be fine. good luck
- First, it might help to know what makes up your score: 35% payment history 30% total debt vs. available credit 15% length of time establishing credit 10% types of credit established 10% inquiries and new credit Well, if 2-3 of your cards were maxed out, then that will affect 30% of your score. The scoring system is desgined to where it wants you to use but not overuse your credit. You should keep the balances on all your cards collectively at 30% of the combined available credit. Let's say that you have 5 cards with a total combined limit of $7500. You should have no more than $500 charged on each of those 5 cards. As for the late payments, those hurt you the most since it's scored the heaviest. Unless you can contact the companies that you were late with and have them to re-age your account as a goodwill courtesy, you're going to have to ride those out from anywhere to 3-7 years. It's important to pay on time, if not a little earlier than the due date. Once you get the balances down and if you're fortunate enough to get those late payments re-aged, try to increase the credit line on your cards. Now I say to increase them, that doesn't mean that you should use them. Like I mentioned earlier, maxing your cards out tanks your score, so since you have multiple cards, you have to be careful to spread them out evenly. Some people might tell you to cancel your cards, but that actually does more harm than good. Cancelling the cards at this point shortens not only your payment history, but your available credit making it look like you charge more than you do to the scoring system. What's done is done at this point, that's why I said not to apply for any more cards and use the cards you do have very very lightly. It will take time, but eventually your score will start to rise again
- First, make sure all the information on your credit report is accurate. Second, try to pay off all or any accounts that are currently in collections or make payment arrangements with the creditor to pay off the balance monthly. Third, any credit card that is over 50% of the available credit line should be paid down to under half of your total credit line. Your credit score is lowered when your available balance is over 50% of your total credit line. Repairing your credit and improving your credit score is a slow process that takes time.
- The following critical factors affect your credit score in a major way. By knowing these you can keep a check on them and make your credit score a healthy one. 1. Re-payment history This factor carries the highest weight in your credit report. How steadfast are you in repaying your loans, makes your credit report shine. Experts claim that this factor alone accounts for 35% of points in your credit score. So, if you falter on repayment front it is sure to be reflected poorly on your credit score. 2. Outstanding debt The next comes your debt burden. How much you owe is a factor that according to experts carries about 30% weight in your credit score. This is 30% is based upon outstanding debt. To get a better score it is advised that you keep your outstanding debt to a minimum. 3. Length of your established credit history The time for which you have a credit history also matters. The longer your established credit history the more credit reporting agencies believe in you. This could be simply because of the fact that they have more data to analyze your financial position. Experts give it a 15% weight in determining your credit score. Read more from: http://www.credit-card-gallery.com/article/204,5_critical_factors_affecting_your_credit_score
