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is paying in full the easiest way to improve m score?
hi, I have about 2 credit cards that are already closed but are open for collections. If I pay them both in full in the next 1 or 2 months (whichever is better), open a secured credit card, responsibly make my payments ontime, and in addition negotiate payments options on m student loan. will this help improve my score? and how long before I can be comfortable knowing my future will not be screwed up. I can get a home a life before its too late?

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It is really hard to say without more detail. What I can say is before you pay off your collections debt, negotiate with them to have them remove their report from your credit in exchange for you paying off your account in full immediately. Many will go for it. If they do agree, get it in writing first. If they will not take it off of your report, paying them off will help your credit, but you will not be in the clear. Paying it off will show on your credit report that the collections account was paid in full, which is good. However, that will still show on your credit report for 7 years that you were in collections in the first place. Paid off is definitely better than not paid off and it will help, but hard to say to what extent.

You definitely want to negotiate with your student loans. 1) if you are currently 30 days or more behind, you are likely getting late payments reported to your credit, each of those hurt, even more if you are 60 or 90 days late. You want to get current and stop getting late payment reports immediately.  Additionally, your payment amount will effect your debt-to-income ratio so the lower the payment the better. Your debt-to-income ratio does not change your credit score, but it is an important factor when applying for credit in the future.

Regarding the secured credit card, make sure to research the company. Do not get into business with one of those shady secured card companies. Also check to see if they have a program where with responsible us of their secured credit card they will eventually upgrade you to an unsecured card. I do not not much about secured cards, so you may want to search the forums to see if people have posted recommendations on reputable companies and programs.

Just keep in mind that although you have hit a rough patch with your credit, and although they will technically stay on your credit for 7 years, lenders will also look at your recent history. As each year passes those negatives hurt your credit less and less and vendors are more likely to give you a chance if they see a year or 2 years of clean history, even though they see those negatives on there. I had late payments on my credit from 4 years before I had met with my credit union manger about financial planning, and although he saw them, he pretty much ignored them since I had a clean history for the 4 years since then. Good luck, and know it will get better so long as you continue to move in the right direction, be very protective over your credit from now on, and within a couple years you will see the difference.

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