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NeedAdvice1Aug2014

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With my current situation - what is the best steps to raising my credit score?
Current score is 571

Collections - $281 (just found and am paying off tomorrow)

Credit/Debt -
- 1 closed credit card, $3,000 to be paid off (was a $3,700 limit), but they won't let me reopen it
- 1 Financial loan with a low APR, 2,500 limit, 1,200 left to pay off (not sure if closed or not - will find out tomorrow)
- 1 US Dept of Education Student loan - $5,500 principal, $1,200 in accrued interest - $6,7500 total to pay off.

What are the best steps to building credit and paying all of these off? So far I have thought of the Student Loan forgiveness, trying to pay everything all off at once with a personal loan, or I've heard it's best to pay a little back at a time - any advice? Thank you!

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Top Contributor
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WAIT A MINUTE!!

Get your credit reports from annualcreditreport.com and check them over very carefully to be certain about that collections account.  Since errors are NOT uncommon with credit reports (which is why we are strongly advised to check our reports once a year) if it is NOT your account, dispute it to get it off your report.  Why pay for someone else's error?

if you can get any student loan forgiveness, go for it.  Otherwise the student loan is something that will remain payable until fully repaid.  You can't discharge them in bankruptcy generally and they have no statute of limitations, so do not ever expire.

Taking out another loan to pay the loan you have is just pyramiding your debts.  Don't do it.  Cut down your living expenses, get a second job, sell some things, just work on getting everything paid off.

And I do suggest reading the articles on this site so you can learn more about credit.  Teaching people about credit is what Credit Karma is all about.

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Student loan forgiveness is only an option if you are either in public service for 10 years and paying on the loan through an income-based program; a teacher in a title 1 school, or on total disability.  Just so you know.

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