This topic contains 3 replies, has 1 voice, and was last updated by Anonymous 7 years, 11 months ago.
- May 12, 2011 at 7:34 pm #209412
I had a debt I owed my old school. it was 5022.85. I recieved a letter from the collection agency that stated I now owed them 7,930.33 (5022.85 debt 444.21 interest, and 2456.22 for collections cost 7.05 penalty) is the legal for them to charge so much in fees?
- June 20, 2011 at 9:18 am #442701
No, don’t open more accounts. First off, more accounts does not make your credit any better. Second, if you do open more credit cards/account, with your bad credit score the interest rate is going to be horrible.
Just give it time and keep paying ALL your bills on time (even being late on a phone bill can get reported to a credit agency) and keep paying down those balances that you do still have. You want your debt to credit ratio to be no more than 30% (best if as close to 0 as possible) and your score will start improving.
Also, remember that part of credit score is also credit HISTORY. So after paying things off, don’t close the accounts even if you no longer use them. It’s better for your credit score to have a say 4 accounts that are 5 yr old than a bunch of new account. The moment you close an account, it (for the sake of a better term) doesn’t really count. You want to have old accounts in good standing, not a bunch of new account.
And you don’t need a lot of credit lines to have a good credit score. You just need to not default on the ones you have, even if it’s just one credit line.
- June 20, 2011 at 10:11 am #442702
1. Pay on time
2. Pay in full
The first 2 imply for credit cards, Auto loan, mortgage, Phone bills, cable TV bills, and every other bill you can think of.
Do not open new accounts (unless you absolutely need them for whatever reason)
Do not cancel existing accounts (Especially the Oldest one)
Do not leave any accounts unused for long periods of time. Use every card at least once every 3 months even if its for 1 dollar, Inactive accounts could get canceled or might not be counted towards your “available credit”.
- June 20, 2011 at 10:53 am #442703
If you do not need more credit then do not open more accounts, any credit card you have paid off and was in good standing will remain on your credit report as a positive, the score is calculated by several things: payment history, outstanding debt, length of credit history, types of credit in use ( auto, mortgage, c.cards) and inquiries. All credit limits on any cards, active or paid off in good standing are a positive for your score. If you have a card paid off and in good standing and still an active account then use the card and buy groceries, gas, etc, put a small balance on it and pay it off before the due date of the following month. This will help your score jump up, pay everything on time and try to keep inquiries limited, these few things will improve your score, it takes time to improve your score and be sure and check your credit report yearly.
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