How much will my credit score increase?
Two years ago I had very large amount of student loan debt (20,000) in collections
In May 2008 I paid it ALL in full. Leaving me debt free.
I checked my credit report this week and I found three mistakes. One loan ($2700.00) was still being reported as in collections. I called and the loan officer said that she would report the loan as pain in full as of May 2008 as soon as possible.
the second and third mistakes we made by a larger loan company and they have to open an investigation (since I hold the promissory notes I am confidant that they will also find them paid in full) and report them as paid in May 2008.
Summary of reports
TransUnion $4409.00(includes all three mistakes ) credit score 568
Experian $1709.00 (two mistakes ) Credit score 568
Equifax $2700.00 (one mistake ) Credit score 575
When the mistakes are corrected I will have $0 debt, 0 open accounts, and I have one closed account ( opened in 04 closed early 06) in good standing.
How much can I expect my credit score to go up after the mistakes are corrected? I was very irresponsible (and broke) young adult with my credit. I have since learned my lesson the hard way and will forever work to rebuild and protect my credit.
Thank you
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Tagged with: Collections • Experian
Filed under: Credit Reports
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The bad news is that when the corrections are made, it won’t improve your score at all. The damage is done and will remain for the balance of the 7 year reporting period. The good news is that the older the item, the less impact on your score.
Creditors look at your whole credit report, not just the score. Paid old debt always looks better than unpaid.
To work on improving your score, you need open accounts to show payment history. You may have to get a secured credit card — you pay a deposit which is held as collateral against the line of credit. Use the card for small purchases and pay in full every month. In a year, you should qualify for a regular credit card or convert the secured account to a regular one.
You will really need at least 24 months of consistent, on-time payment history to begin to improve your score.
Having $0 debt will not automagically help your credit score. Having 0 open accounts will not automagically help your credit score.
You need to have a succesful credit payment history.
To improve your credit payment history – consider taking out a small 1-year personal loan from a bank or credit union. Put the loan amount into a savings account – and then pay the bill every month on time. Do not pay it off early – you want to show that you paid every month on time for a year.
Also consider opening a secured credit card. Keep this card paid off – but do use it. Once again – it is all about the payment history.