How to increase my 580 credit score? #callmetoday

 

How2Increase580credit score

Question:  How can I increase my 580 credit score?

Your low credit score is attributable to accounts that are currently late and/or collection accounts and judgments.

The good news is that credit scores increase organically with the passage of time. This is because the older a negative item is, the less effect it has on your score. An account that is presently delinquent with a past-due balance may cost you 25 points on your score. A year from today, it may depress your score just 10 points. The effect is cumulative—multiple derogatory entries will have a disproportionately strong effect on your score.

If you have accounts that are past due today, figure out a way to bring them current. Do what you have to keep that situation from happening again. One easy way to do this (assuming you have regular income) is to set up automatic minimum payments on each account. That way, you’ll never waste money on a late charge because of an oversight.

If you have collection accounts, negotiate with the creditors. Many of them are “factoring companies.” This means that they are in the business of buying bad debts from creditors who have given up hope of collecting them. They buy them for pennies on the dollar, so they can settle for less than the full amount and still make a profit. Be aware, though, that you’ll have to pay tax on the amount they reduce the account for full payment—it is treated as income.

If you don’t have any active credit cards, you should begin trying to establish new credit. Try your bank or credit union first. See if they will approve you for a small credit line—even $200, but preferably $300 will be useful if you have no active accounts. If they turn you down, ask them if they offer secured accounts. This means that the card they give you will be secured by a deposit of the money you put up. Be sure they report to the credit bureaus as a “revolving” account.

If you still run into resistance, try department stores. Retailers like Target have their own branded Visa cards, and they even offer in-store discounts for using their cards. Expect a very low limit at first. Consider on-line retailers like Amazon. They offer their own cards as well.

Once you have at least one card, start using it regularly—and pay it off in full every month. You should not use any card that doesn’t have on-line web access. Link the account to your checking account so you can pay with a couple of clicks.

If the limit on your card is very low, like $200, you may want to pay it off several times a month. The object is to use the card often, for things you were going to buy anyway—gas, groceries, movies, and clothing.

After a fairly short period—possibly as little as 30–45 days, the creditor will increase your limit. If they don’t call them and ask them to increase it. If they turn you down, mark on your calendar to ask again in 30 days.

It is important to realize that this process should cost you absolutely nothing; you will be purchasing items you were going to buy anyway, and because you are paying the card off inside the 25-day grace period, you should never pay a penny of interest.

Once you have that card and have begun using it, you should submit other applications. Some people will tell you that all these applications will hurt your score. They’re right—but multiple inquiries won’t affect your score as much as you might think, and your goal at this stage is to reestablish credit. Your score will take care of itself.

Establishing credit is one of those things where having more of it makes it easier to get. Having two or three active cards in good standing with low balances will enhance your credit profile significantly. Over time, your credit scores will begin to increase.

Be sure to keep the balance on your cards ultimately below 30% of the credit limits. Beyond this amount, and your scores start to suffer. This will be difficult to do with very low-limit cards at the beginning, but your goal at this stage is to establish credit and acquire at least three cards. Once you have them, and have gotten at least one credit line increase, you can start managing the balances to increase your score.

There are consultants who will tell you that they can increase your score by “x” points in 90 days. Be very careful! If their whole approach is simply to dispute the negative entries repeatedly, they may drop off—but there is also the possibility that they will return. Using the method outlined here won’t cost you anything—and it is a real fix—not a band-aid.

The most important thing to keep in mind is that there is HOPE!

I hope this is useful!