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Whats the best way to repair a credit rating?

I'm trying to repair my credit. Whats the cheapest way to monitor my credit score periodically?

  • I'm 31 and I'm trying to pay off about 10 different things that went to collections from my youth. I'm making small payments on two of them currently. Most are hospital bills, not sure if they count? I was also wondering if its best to pay of one off at a time or a little on each? I'm just trying to fix my stupid mistakes from my youth, THANK YOU for all your help!!!!!!

  • Answer:

    Paying off defaulted debts won't improve your score. And you don't need to waste money on a monitoring service. You will need at least 24 months of consistent, on time payment history to see any improvement in your score. If you don't have an open, active line of credit, get a credit card, even if you have to get a secured card. Use the card for regular purchases, wait for the statement, and pay the balance in full every month. This will build credit and avoid interest. CreditKarma.com offers a free score estimator based on your TransUnion report. It's not FICO but within 50 points of so. Good enough to check for your purposes. Follow CatDad's suggestion for paying off and settling the defaulted debts. It won't improve your score, but it will stop the collection calls and the potential lawsuits. Paid old debt also looks better to creditors that review your credit report.

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- Making small payments as part of a payment plan on already defaulted debts will not do anything to fix your credit. This is a really bad way to pay back defaults: they could take your payments for a year then resell the account to a new collection agency, which could restart the collection process all over again. - Save your money and settle the accounts in full for less, like 25% of the defaulted amount. Get all terms in writing first. - Bad debts come off your credit report by themselves in 7 years automatically. - How to pay collection accounts: http://tinyurl.com/4y9fv2y

CatDad

You are allowed to get 1 free credit report from each of the 3 bureaus once a year. So get one from A. Then 4 months later, from B. Then in 4 months, C; and start over. So maybe March, July, November (or so) of every year. This is not as precise as getting all 3 at once, but good enough to give you a general idea.

SumDude

Maybe the rating system is overrated (No pun intended). Nothing better than the good, ol' fashioned method of simply 'paying off debt.' I would only check your score before applying for something, and since you're thing is to improve your score and finances... the only thing that justifies that is a home loan.

perfectlybaked

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