Used my CCs to pay my way through college. That coupled with poor early 20 decisions led to me not being able to pay for my CCs at the time. The results of this is three delinquent CC accounts ($5k, $3.5k, and $1.5k)
Now I’ve been able to get slowly gather up some credit cards again, mainly the three Capital One cards (Savor, Quicksilver, and Venture One), but I’m working with very small credit limits, about $2500 across all three.
My credit score isn’t recovering well either, with it sitting just around 600
It’s been a few years since my accounts went delinquent, but I have a good paying job now, so with some saving I could pay off those credit cards’ balances in full sometime within a year. I’ve gotten a few pieces of mail from collectors giving me the option to pay off a smaller balance, but haven’t responded as I’m not sure what that is (just felt too good to be true)
Any thoughts on next steps to rebuild my credit score?
I have a good job now. How do I rebuild my Credit Score?
byu/teakoVA inpersonalfinance
Posted by teakoVA
8 Comments
Just takes time.
Pay your bills, pay off your debt. Only answer there is
You don’t do anything except pay your bills.
Eventually you’ll learn that your credit score isn’t actually important unless you’re trying to get a mortgage, and I say this as someone with a >800 FICO, who never intends to get a mortgage lol.
Addressing those delinquent in hopes of getting it remove will yield a positive impact. Visit r/Credit and post about them.
You’re best friend is time.
As you build your positive credit history, you’ll also get the benefit of the derogatory history being less damaging. There are strategies that can help you look to satisfy those past due obligations in a way that benefits your credit file the most (like deletion); it’s well worth your time to research these methods.
Credit limits are not that big of an issue, in that as long as you’re managing your utilization properly, it shouldn’t matter what the limit is. Yes, in raw terms, managing utilization is easier with a $10,000 limit vs $100, but the principles remain the same.
And it all starts with an ironclad budget, and the discipline to pay off your credit card down to zero monthly.
What are you planning on financing that you need a high credit score?
Want to fix your credit score, then prove to a creditor you are worthy to lend to. How do you do that? You pay what you owe.
How? Go back and pay off old delinquent debts $10K. If you paid $1K a month toward it would be fully paid off in 10 months (if you negotiate no more interest or fees on the debt while you pay it back)
With time, and paid off accounts, and new accounts with good payment history your score will improve.
Pay all of your bills on time, every time. With every month that goes by, your past choices will hurt your credit score a tiny bit less, until they fade away to nothing after 7 years.
Just continue to keep paying them down. Your credit card limits don’t matter as much as how much you utilize the limits. Ideally try to only use 30% or less of whatever your limit is. Pay your bill off in full each month if able. Also for anything in collections anything under 500 dollars won’t show up on a credit report. Getting ride of any collections over 500 dollars will show the biggest credit increase.