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Question: Bad credit score even though ive paid off debt?

(Posted by: Pamela on 2010-01-13 07:56:08)

I got my first credit card at the age of 18. From then on I had several cards that in the beginning were all paid on time. After losing my job and falling on hard times the accounts became delinquent for about a year. Since then (2006) I have paid off all debts- most of which were charge offs and are now paid charge offs. I currently have one credit card and a car load, both of which are always paid on time. It has been 18 months since I have started paying on the car loan (no delinquent payments) but I haven't saw an increase in my credit score. Why is it taking so long?

Posted by: SPIFIMAN1 on 2010-01-13, 08:26:16

Well first of all paying off old debt doe's not help your score at all, the only thing that changes is they show as paid with a $0 balance which looks a lot better but doe's nothing for your score. The good payments on your car and credit card should be helping but since scores are based 90% on the last 24-months of activity it will take some time. You should also think about getting a couple more credit cards to increase your debt to credit ratio this makes up a full 30% of your score. Good luck.

Posted by: cashmaker81 on 2010-01-13, 08:11:12

Depending on the number of delinquent accounts you had, it will take a while. Your credit score is based on actions over a period of time and the number of certain types of accounts. Although the accounts are in good standing, they still affect your score until they are gone, which takes seven years. That's not to say your score can't go up, but don't expect it to be fast or dramatic. One thing that might help is getting more credit- the number of new accounts does negatively affect the score, but the ratio of credit to debt could increase your score. try getting one or two more cards.

Posted by: Janey on 2010-01-13, 10:57:12

First of all, you should understand that those defaulted accounts make no difference to your score whether they show paid or unpaid. There are steps you can take to get your score to actually move. 1-You mention you have one credit card and one car loan. It is good to have the two different types of loans but it is very important for you to keep the balance of your card less than 30%. So if your one card has a credit line of $1000, you should never have more than $300 on the card. 30% of your credit score is based on your utilization so it is a huge factor. if you can't pay your balance down, you may want to consider getting another card to raise your available credit. 2-You can always file a credit dispute and dispute those negative items on your credit report. Since they are paid, the lender may not bother to verify the account and if they don't verify it, the credit reporting agency must remove that account. This blog has some more information on things than affect your score. comebackcredit.com/ clean-credit-improve-credit-rebuild-credit-how/ Good luck!

Posted by: Hoosier G on 2010-01-14, 04:18:26

It can stay on your record for 7 years + 6 months. If any of the debts are aged, or past that time period you can have them removed from your credit report. It will take time for the old debts to come off and for the new debt which is being paid on time to bring up your credit score. This is happening all over the place to everyone so don't feel bad.