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How to Raise Your Credit and Properly Manage It
After reading through some of the other responses on here, I see a lot of misguidance. I am going to take my personal time here to set you all straight and help out! Let me know if you have questions.
Let’s start from the beginning. Four weeks ago, my scores where in the low 500's. This because of credit card utilization being at 95 %(+) student loans and also having a 25k car loan and bankruptcy from 6 years ago.
My method to get a 700 credit score.
I contact and I signed up for their credit repairing services. (You only need to use one, I signed up for both). Yes, Both. Double the disputing power and faster results, but it’s more costly. They were disputing EVERY negative aspect on my credit with the 3 major credit bureaus. (Did you know there were 4? Don't Believe me. Experian, Transunion, Equifax and INNOVIS! Look it up). They have removed collection accounts, bad payment records, old accounts that are doing me any good, defaulted account, and also yes removed my bankruptcy from yes, 2 of the credit bureaus, which is AWESOME!) This is a service that I recommend very much. Did wonders for me. All you do is sit back and let them to the work as there are LOTS of loop holes and laws in the crediting world that most consumers don't know about.
A few things I have learned and been taught through REAL CREDIT EXPERTS.
1. Collection Accounts.
Every time you dispute on your credit a collection account, for any reason, it marks an update from the collection agency in reference and starts your 7 year process all over again. I recommend unless it’s really fraud, DONT TOUCH it. Because if the dispute is not in your favor, it will hurt you, especially if you have already had it for say, 5 years on your credit, you are now waiting another 7 for it to disappear. When calling a collection agency to settle an account, yes it is better to have a settled account for less than owed, but settled accounts reflect as a negative not a positive. Instead of getting that whole positive mark, you’re getting say, 1/4 of it as it shows under a derogatory or charge off or settled status. If you do decide to settle with a creditor, and are requesting the collection account to reverse off your credit, PROTECT YOURSELF and get it IN WRITING. Allot of times, debtors will make agreements over the phone, and pay the settlement thinking banks will honor their word of removing it, and 2 months down the line, still show it on their credit as SETTLED. WHOOPS! If they refuse to provide in writing, don't settle and just leave the debt as be, as after your 7 years, the collection is removed and liability is diminished.
2. Bankruptcy.
If you file for bankruptcy, MARK EVERY ACCOUNT included in your bankruptcy. Allot of times, creditors will still come at your ILLEGALLY trying to get you to pay the debt, even though you are LEGALLY no longer liable. If they do so, you can sue. But you must have proof of the accounts that were included. If you don't they can do as they please. Also, make sure that all accounts included in your bankruptcy are marked on your credit. Allot of times, false or incorrect information is not updated on your credit. The bureaus are worked by humans just like you. Humans are capable of making errors and are lazy. Catch them on a bad day, and well, you’re just F&%$ed. Remember, getting a legit bankruptcy off your credit is next to impossible. I got lucky as they were late in providing proof within the 30 days allotted for dispute. Chapter 13 stays on credit by law of 7 years, but has been reported to drop off after 5 (rare). Chapter 7 bankruptcy stays on credit for 10 years but has been reported to drop off after 7. (Again, rare). If you file, note, IT IS NOT IMPOSSIBLE TO RESTART YOUR LIFE! I did it! I drive a nice car, bought a house and got funding for school and I make 35k a year.
3. Inquiries.
STOP PULLING YOUR CREDIT IN ORDER TO OBTAIN CREDIT! Every time you pull your credit to gain credit, you get hit with an inquiry. Each inquiry can take 3-5 points off your record and they stay on your credit for 2 years. Soft inquiries, inquiries that are pulled by you to review your own credit and not to obtain credit, are not held against you. I use and I pay $9.98 a month after a 7 day free trial for ScoreSence and I get all three scores and reports and all the same services Credit Karma offers for just Transunion.
4. Credit Cards.
Ok guys, Look. Credit cards are great, if you apply for the right ones. My recommendation, always apply for cards that GIVE BACK! Whether its points, cash back or airline miles, IF IT’S FREE WHY NOT GET IT! Why pay interest and fees? You’re throwing money away! No! If you must use a card with a high interest rate and fees to establish credit, DONT USE IT! If you must, do not use more than 15% of the credit limit. It WILL HAUNT YOU! Did you know that all credit bureaus record your payment and high balance history every month and are used to score you? Well, they do. Accidently went over your credit limit by $20 bucks? That just cost you for about 6 months, even if you get your balance back down again. ALWAYS pay the minimum. Keep your payment history good! Can't afford the minimum? 2 options. 1. DONT USE THE CARD THEN! 2. Set up arrangements with bank for a better payment plan. But it could cost you a lower limit or closing of the card. DO NOT CLOSE ACCOUNTS! NO MATTER WHAT! Once you have a card, DONT close it! Just paid it off, DONT CLOSE IT! It will hurt you more than you know. Longevity and length in your accounts is vital in your credit worthiness. It shows that you know how to manage your money. Have an annual fee? Sucks, but DONT CLOSE IT. High Interest? DONT USE THE CARD UNLESS IT’S AN EMERGENCY! Want those new shoes or that fancy new iPad (that are a complete waste of money, sorry but tablets are), NO! Unless you have cash for now you’re not buying it. (Which if you do, I hope your accounts are all current, otherwise, WHAT ARE YOU THINKING! Is that tablet going to make your money back? Nope! Best advice, you want to show you can use cards responsibly, so I use mine as gas cards, and then I pay off every pay day. Shows payment history, use and responsibility. And it works, trust me.
5. Auto Loans.
Ok, new cars are great. Trust me. However, they increase your debt to income ratio just like anything else on your credit. This is not good. Also, it debts HARD. Trying to buy a house, those auto loans could put a stop! Ok. As mentioned above when I briefly went over inquiries, EVERY inquiry can hurt you when applying for credit. When you buy a new car at a dealer, did you know your credit gets ran about 5-10 times? Once through the dealer to see if they can work with you, then every bank they submit you to pulls your credit. They submit to a minimum of 5 banks to see who can get you the best rate and payment options. Your credit just dropped between 25-50 points just looking at buying a new car. Recommendation, apply for financing through no more than 2 private banks before you go to a dealer. Chase or Capital One offer great rates and almost all Credit Unions. KNOW YOUR CREDIT before you goes! Never sign for a car that is half your rent or more! Unless you can afford it! FYI! Pick out the car you want before you go. Look up resale values and ratings. Check insurance premiums FIRST! You won’t believe how many times my friends have gone and bought new cars not knowing that there insurance just jumped 150 a month just so they can drive a new fancy car. Didn’t expect that did you? WHOOPS! When you get to a dealer, DO NOT BE AFRAID TO WAIT AND SEE ALL YOUR OPTIONS. DON’T BE AFRAID TO SAY NO TO A SALES MAN WHEN THEY USE THEIR PERSUASIVE SPEECH, “Great Lets Pull You’re Credit and Get you into this Brand new car you just LOVE!” All they care about is selling a car. It’s their job. They don’t care about you or your credit or whether or not you can afford it. Why, because they get paid through the dealer on a commission. If you get repossession, they don’t care. As long as they get approved for you, you’re stuck! REMEMBER, Dealers are the ENEMY! Also, did you know the minute you drive the car, 2 miles over the curb of the dealer, you have taken possession of the car, the sale is final and your car just dropped 18% in value. Advice. Buy CPO (Certified pre-owned) or private party.
6. Personal Information:
Did you know that the more you move, the more your score is affected? I didn’t. I moved every year to a new apartment. What can I say, I like change. My credit was heavily affected. I learned this from an Experian representative! STAY PUT! It shows stability. Of course, every ones situation is different, however, avoid changing your address. GET A PO BOX! 25 bucks a year, your address stays the same! YAY! Also, ALWAYS MAKE SURE YOU HAVE THE CORRECT NAME SPELLING, ADDRESS INFO, AND PHONE NUMBER ON YOUR CREDIT. (Your Phone number is private. I have mine on my report so when my credit is pulled, they must call me to verify to help to avoid identity fraud.) Even though your personal info is not the primary scoring factor, it still has an effect on your overall report. Plus when creditors and banks pull your credit, if they see a hot mess… you’re in trouble. Appearance is everything. Consider it marketing.

This is all the information I have time for right now, but if you have questions. HIT ME UP!

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