I am sure this has been touched on already here but I just want to post this to make sure i'm on the right track.

My credit score has been worse than it is now but it is still at the top end of "poor" credit according to creditreport.com. I am within 40 points of getting at least into "mid risk" credit and am determined to get it up there or higher within this year.

On the creditreport.com site, which I highly recommend using by the way, it has an "estimate your credit score" section where you can make changes to see what would happen to your score. I have a good number of collection/delinquent accounts from the past. According to the estimate, if I had 0 delinquent accounts I would improve my score 70 points putting it in the medium risk area which I dont' think I've ever had!

Has anyone had any experience settling collection accounts that can offer any advice to approaching this? I would like to get rid of all of them (amounting to about $4000 if I pay them all off without settlement). Any advice on this would help.

Also it suggests having no credit cards in good standing (I have none at all) is a negative too. Should I go ahead and get a secured credit card with a security deposit and make small purchases, paying it off at the end of each month? Is it worth it to do that?

Lastly, I would like to get a small mortgage as this apparently has a good effect on your credit score too but of course this is probably not likely until after I get my credit score up. Should I wait on seeking buying a small home or go ahead and try it now?

Any suggestions, or advice would be greatly appreciated. I think I'm on the right track but some encouragement and advice would be helpful.

Thanks for listening!
~S4

From my experience, it IS worth getting a secured credit card and paying it off every month. It does help credit tremendously. I, personally, wouldn't purchase property to just bring up your credit score. Wait until you're in a situation that will allow you to get sometime you really want.

Originally Posted by Maranara

From my experience, it IS worth getting a secured credit card and paying it off every month. It does help credit tremendously. I, personally, wouldn't purchase property to just bring up your credit score. Wait until you're in a situation that will allow you to get sometime you really want.

well no, I wouldn't purchase a home for that reason alone. I'm not in a hurry to do that I don't mean to imply that I am. Maybe a couple years and by that time my score will have improved a lot anyway

[ringtailcat]

Have you got copies of your credit reports from all 3 credit reporting agencies ie: Transunion, Experian & Equifax? If not, it would be a good idea to do that & check them for errors & inaccuracies. You can dispute anything that you feel is wrong or that has been on your reports longer than it should be, plus some other reasons, too.

[Inedible]

With a secured credit card for say $500 you start out with a balance of $500 due. As you pay on it, it turns into available credit. When it is paid off - they have $500 of your money to use as a security deposit - you may still have fees to pay based on the terms of your card. It really is a good way to get something positive on your credit history.

Originally Posted by Inedible

With a secured credit card for say $500 you start out with a balance of $500 due. As you pay on it, it turns into available credit. When it is paid off - they have $500 of your money to use as a security deposit - you may still have fees to pay based on the terms of your card. It really is a good way to get something positive on your credit history.

Hmmm I think you have to deposit the $500 in the beginning and in return they give you a credit card for that amount, it's "secured" because they are guaranteed to get their $500 back because you've already deposited that amount and they can take it if you don't pay. From what I understand, the good secured cards, after 12 - 18 months of good payments, you'll be offered an unsecured card.

I plan to try to get a $300 or so card and buy small things, ($50 or so) at a time, paying it off at the end of each month entirely keeping it in good standing.

one thing I've read, is that some people will say charge something and make the minimum payment each month. I've heard that's not the way to build credit either. Paying the balance off every month is the way to go. not sure why I added this but just had me thinking...

Originally Posted by ringtailcat

Have you got copies of your credit reports from all 3 credit reporting agencies ie: Transunion, Experian & Equifax? If not, it would be a good idea to do that & check them for errors & inaccuracies. You can dispute anything that you feel is wrong or that has been on your reports longer than it should be, plus some other reasons, too.

yes I do. afaik, all of the collections and delinquencies are accurate. Some say just "dispute everything" and you'll find many fall off. For me, it feels dishonest to do that. After all I want good credit and good credit for me is not just a number but saying that you'll pay what you owe on time. If I do that it goes against that principle. I know you're not saying that but just went off on a tangent again.

[Inedible]

I used to have a secured card. All I know is how mine worked.

[Perna]

Make sure that if you get a secured card, the bank won't flag it as "secured" (or it defeats the purpose; if you've paid the money in there, it's not "credit"). Here's some advice how to go about getting a "good" secured card:

10 questions before getting a secured credit card

Originally Posted by Perna

Make sure that if you get a secured card, the bank won't flag it as "secured" (or it defeats the purpose; if you've paid the money in there, it's not "credit"). Here's some advice how to go about getting a "good" secured card:

10 questions before getting a secured credit card

Don't know if this is different but when I get the secured card, it will be through my credit union that I just joined, not a bank. I'll ask when I do that though.

[anneo59]

Originally Posted by s4ndm4n2006

I am sure this has been touched on already here but I just want to post this to make sure i'm on the right track.

My credit score has been worse than it is now but it is still at the top end of "poor" credit according to creditreport.com. I am within 40 points of getting at least into "mid risk" credit and am determined to get it up there or higher within this year.

On the creditreport.com site, which I highly recommend using by the way, it has an "estimate your credit score" section where you can make changes to see what would happen to your score. I have a good number of collection/delinquent accounts from the past. According to the estimate, if I had 0 delinquent accounts I would improve my score 70 points putting it in the medium risk area which I dont' think I've ever had!

Has anyone had any experience settling collection accounts that can offer any advice to approaching this? I would like to get rid of all of them (amounting to about $4000 if I pay them all off without settlement). Any advice on this would help.

Also it suggests having no credit cards in good standing (I have none at all) is a negative too. Should I go ahead and get a secured credit card with a security deposit and make small purchases, paying it off at the end of each month? Is it worth it to do that?

Lastly, I would like to get a small mortgage as this apparently has a good effect on your credit score too but of course this is probably not likely until after I get my credit score up. Should I wait on seeking buying a small home or go ahead and try it now?

Any suggestions, or advice would be greatly appreciated. I think I'm on the right track but some encouragement and advice would be helpful.

Thanks for listening!
~S4

i know if you have a few decent credit cards and handle them well, not having high balances, paying on time, et., it can really help if you do things right. Mortgages can be much harder to get. I am working on all this myself, and there's a lot of creditable advice out there, tho be wary of scamsters. The best!

[anneo59]

Originally Posted by s4ndm4n2006

Don't know if this is different but when I get the secured card, it will be through my credit union that I just joined, not a bank. I'll ask when I do that though.

Personally, my credit union has been much better to work with than the bank, so far. The best1

Originally Posted by anneo59

Personally, my credit union has been much better to work with than the bank, so far. The best1

I just joined a local credit union. CUs are always better I've read.

Originally Posted by anneo59

i know if you have a few decent credit cards and handle them well, not having high balances, paying on time, et., it can really help if you do things right. Mortgages can be much harder to get. I am working on all this myself, and there's a lot of creditable advice out there, tho be wary of scamsters. The best!

If you listen to Clark Howard, it's advisable to keep using your credit cards, only as much as you can pay off every month and do so. Mortgages, can be doable though even with bad credit, (not sure as bad as mine but to a point) as there are organizations and assistance out there for this.

Good luck with improving your credit!

[anneo59]

Originally Posted by s4ndm4n2006

If you listen to Clark Howard, it's advisable to keep using your credit cards, only as much as you can pay off every month and do so. Mortgages, can be doable though even with bad credit, (not sure as bad as mine but to a point) as there are organizations and assistance out there for this.

Good luck with improving your credit!

Yes, he's got a lot of good advice, tho I don't entirely agree with all, he's good, and speaks to our situation a lot better than Suze Orman or Dave Ramsey, not that they don't have anything to offer. The best!