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| *Loan,banking and credit>>>credit repair |
Besides paying off my credit card debt, what are some extra things that I could do to repair my credit? |
I made the biggest mistake that a college freshman could make, I got a credit card. I racked up charges, than overcharged, payed the miniums, overcharged...it was all just one ugly desperate cycle. I've learned my lesson luckily rather early on, but my credit rating is totally screwed up now. I'm making payments every two weeks to pay off my debts and intend to be more responsible. What are some other things I can do to increase my credit rating? Continue paying on time with more than the minimum. Try to pay until the balance is zero, then charge what you need to (should still be under 25% of your credit limit... I know yours is probably low as a freshman student card, but it'll increase over time!) and pay off ON TIME and IN FULL. This avoids that nasty interest that most credit cards love to charge. Also, don't apply for new credit cards. Part of why your credit score is all messed up is because your credit history is tiny. The most recent activity, most notably the last 2 years, is what's most important in calculating your FICO score... You don't even have a score without 6 months of activity! If you act like a responsible credit card handler, this information will affect you less over time... especially if you get an increased limit when you're out of college and use THAT responsibly, too. Do you have student loans? These could help your credit score later on by giving you a better mix of credit, but don't freak out about paying them all off right now. The interest rates on these loans tends to be rather low and if you manage to reconsolidate your loan after you graduate, you may be able to lock in a great rate when your credit's shining. Having debt does not hurt your credit just as long as you pay your bills on time. Make sure that everything you owe (car, rent, utilities, etc) is always paid on time. Here's what goes into your score. * Payment history 鈥?35% * Amounts owed 鈥?30% * Length of credit history 鈥?15% * New credit 鈥?10% * Types of credit used 鈥?10% Payment history is the biggest item. Making payments on time is what will make that go up or down. It does take several months of on time payments before you'll see a significant increase in your score though. Amounts owed is next. That is how much money you owe in relation to how much credit limit you have. If you have a credit card with a $1000 limit and you have $900 charged, you have a 90% debt ratio. You want your TOTAL debt ratio to be under 30%. Length of credit history you can't really do anything to change. Types of credit, you want a mix of loans and revolving credit. New credit is anything you've applied for recently. Every time you apply for a credit card, you temporarily lose points. So don't apply for anything new until you can get the history and debt ratio (the top two) fixed. Paying of your debt is going to help you tremendously though and it sounds like you are doing a great job with that. You are doing good so far...continue paying everything, & minimum payments are better than no payments... Check your credit report & make sure everything on there is accurate.....very important. keep making your payments, then try to buy thing in cash and only things u really need on a credit card, then pay that bill on time.. Like the others who have posted have said, the most important thing right now is to pay off those balances ASAP. Faye and Sarah hit it on the nose. 65% of your is directly affected by that credit card debt, 35% being payment history (delinquencies), and another 30% of it being the amount of debt that you have. There are some things that you can do once you've paid off all of the debt that you have. If you have a close friend or family member that has excellent credit, ask them if they can add you as an authorized user to one of their credit cards. You won't need a card, as this would only be for reporting purposes only. Make sure that the credit card company adds that account to your credit report. This will generate some positive payment history. If you're paying normal recurring bills on time such as rent, utlities, cable, wireless you can enroll with this reporting agency called PRBC. It reports regular monthly payments that the "big 3" doesn't and scores it in a report that can be considered with your tradtional credit reports. It shows a better picture of your payment history, which again is 35% of your score. Hopefully, once you've payed everything down, you'll be in a better position to start getting credit again and use it wisely http://prbc.com/default.php? |
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