Question by Melissa H: How to improve my credit score?
So last year (2009) I was laid off in February, and had just enough in savings to cover my basic expenses (rent, food, insurance) until I started getting unemployment checks in May. So basically, my credit accounts (except for one) when to 60 days past due. I called the CC companies well in advance, explaining the situation, and no one could “help” me until I was at least 30 days over due. At that point (30 days late) called again, but wasn’t getting my unemployment check, so had to wait until I was 60 days late. At that point, all my credit accounts offered 0% for six months to 1 year, but the condition was that I had to close my accounts. I agreed, and have paid diligently for the past year, more than was due and early. (My credit went from 710, to 590 almost overnight) I now have a job, and have figured out I can pay my debt off in 1.5 years. But since I have no available balance on my credit cards, my credit score isn’t even moving. So, is there a way to get these creditors to reopen my accounts. I don’t even care if they just reopen them with the limits that I am at now. My goal is to pay them off, I destroyed all the cards and have little intention of using credit as a crutch ever again. Or do you think I can get a personal loan to consolidate this debt (with a score of 600?)
Why do I care about my score? #1, I also have a side business, that I would like to take full time, but I cannot get a $ 5000 loan for the technical equipment I need with my credit score. (I’ve done the numbers, the forecasting, and even have about 30 clients lined up, could pay this off in less than 6 months)
#2 I am looking at purchasing a four plex investment property to gain me $ 2000/mo cash flow after expenses, but a bank won’t even look at me.
Am I stuck in the FICO score abyss for 4-5 years waiting for my credit score to improve, or is there some way I can boost my score 100-130+ in a year? Its not like I was previously irresponsible with my credit, just ran into tough times and was 60 days late, ONCE in a 9 year credit history.
I’m looking for creative ways to improve my score. Waiting around is not an option. Any advice is greatly appreciated.
Best answer:
Answer by bdancer222
No, you won’t be able to get those accounts reopened. Just get them all paid off. Carrying balances on credit cards of more than 30% of your limit hurts your score. However, pay off the balances and your score rebounds.
Of course, those 60 late payments will continue to negatively impact your score for the balance of the 7 year reporting period. The older the item, the less impact. You will need to rebuild your credit with new lines of credit. You will need at least 24 months of consistent, on time payment history to improve your score.
If you can’t qualify for a $ 5K loan for your business, you won’t qualify for a consoliation loan. Best to work on paying off those credit cards as quickly as possible.
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