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Hi all,
how do you improve your credit score? Are bank overdrafts a sign of trust from the bank or are they looked upon negatively by credit companies?? I live in the uk so info should be relative to that.
how long does it take for a paid off credit card etc to impove your credit score. EG if a person paid a credit card debt off would there credit score immediately improve or would it take months?? any info appreciated! 🙂

1 Thought on Improving credit rating – overdrafts good or bad???
  1. Reply
    Mike S
    June 20, 2011 at 9:44 am

    In terms of overdrafts, it won’t impact your credit *unless* those overdrafts aren’t paid off. Banks typically don’t report them like a normal credit card but they do send them to collections agencies if not paid within 90 days or depending on their policies.

    The credit cards will stop impacting your credit after 24 months of post stable credit and payments. As long as the card wasn’t discharged (collections), otherwise you’re looking at up to 5 years. Paying off the card won’t improve it considerably in the short term but will help.

    Keep in mind, there is no magic way to fix your credit. FICO (Fair Issaic Credit Corporation) has a confidential system of determining your score. The *most* important is length of positive credit history.

    If you have no credit cards at the moment, I would advise going to a bank and obtaining a secured credit card. In other words, you’re putting down collateral. If you put $ 300 down, you can get a credit card for $ 300. There is no credit check performed since you’re putting down collateral. In turn, the secured credit card acts just like any other and is reported to credit agencies that you’re paying your payments. Having 3 credit cards or lines of credit open in good standing is the magic number but do as you can afford.

    If you don’t have credit, you can’t improve your credit. You have to maintain your credit history otherwise you will never be able to fix your credit.

    Try to pay off any collections, have them resolved, and start rebuilding your credit. As said prior, there is no magic way but start taking positive steps AND time.

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