I’m 21 credit score is 587? Please help, need advice on raising it.?

7 comments

1. 

   ems914 on June 6, 2010 at 6:18 pm

   It’s important to note that raising your FICO credit score is a bit like losing weight: It takes time and there is no quick fix. In fact, quick-fix efforts can backfire. The best advice is to manage credit responsibly over time. See how much money you can save by just following these tips and raising your credit score.

   Payment History Tips
   Pay your bills on time.
   Delinquent payments and collections can have a major negative impact on your FICO score.
   If you have missed payments, get current and stay current.
   The longer you pay your bills on time, the better your credit score.
   Be aware that paying off a collection account will not remove it from your credit report.
   It will stay on your report for seven years.
   If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
   This won’t improve your credit score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.
   Amounts Owed Tips
   Keep balances low on credit cards and other “revolving credit”.
   High outstanding debt can affect a credit score.
   Pay off debt rather than moving it around.
   The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
   Don’t close unused credit cards as a short-term strategy to raise your score.
   Don’t open a number of new credit cards that you don’t need, just to increase your available credit.
   This approach could backfire and actually lower your credit score.
   Length of Credit History Tips
   If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly.
   New accounts will lower your average account age, which will have a larger effect on your score if you don’t have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

2. 

   tkquestion on June 6, 2010 at 6:18 pm

   My advise to you is to be patient. Even if you didn’t mess up your credit with bad habits, your score will be low because of your age and thus lack of credit history. It is even worse because of your past behaviors.

   I see you are doing much better now and are acting very responsibly. It will take few years for your scores to improve.

   Under your situation, raising your credit limit to 3000 will make very negligible, if any, difference. Personally, I would not do it.

3. 

   James Hassle on June 6, 2010 at 6:18 pm

   First do not raise your credit card limit. This is just more temptation. If your limit is 2500 you should never let it get close to that. The way I fixed my credit after my divorce was with a few small balance cards that I charged small amounts on and paid off each month. That’s the vital part. Never let the amount charged become more than you can pay off within a month. After about 6 months of this I was able to get a bank to say yes to a car loan. It’s good that you realize now that credit cards are not only not free money but can overwhelm you easily. Don’t cancel all your cards just don’t let yourself charge more than you can easily pay off. Get that big one payed off asap, follow my plan and the rest will follow. It will take a bit longer for you bcause of age but it will work. You need 3 good open accounts and a good work history to get most banks to look at you for a loan. You still may need a co signer when the time comes but with good credit habits you may not or at least may not need a co more than once. Good luck! You are on the right track!

4. 

   Starting To Feel on June 6, 2010 at 6:18 pm

   Hi. I had some same problem as you did and here’s what I did.

   Cell phone companies do not count towards your credit score unless it goes into collections, which at that point it reports negative.

   I closed out all my paid off credit cards which I later found out was a bad idea. Should of left them open and just not used them which would have not have hurt you because it would have shown that you are responsible enough to have an account and leave it at a zero balance.

   Don’t raise your card limit because if you call to try and get it raised they have to pull your credit, which is bad, and if you get denied it shows as a denial. Pay as much as you can each month and DON’T USE IT. In the past 5 months I have paid off all my balances, except my car, getting ready for our daughter to be born (any day now I might add) and all of my limits have been raised and my score has raised A TON.

   Basically just remember that using your cards isn’t a bad thing as long as the balance doesn’t exceed 30% of the limit (I.E. $1000 shouldn’t exceed $300). now that my credit cards are paid off I only carry 1 and I only use it if I happened to leave my debit card at home. I also pay off the balance.

   Good luck and I hoped I helped you out!!

5. 

   Jenny on June 6, 2010 at 6:18 pm

   I used to work for Wells Fargo in their Credit Card department as a supervisor and people often asked me how they could improve their credit.

   1. Limit the number of credit cards you actually own. One credit card with a high balance is actually better then a bunch of credit cards with small balances.

   2. Avoid opening new accounts/credit checks. All though everyone says monitoring your credit is good (and it is occasionally) repeatedly checking it can effect your credit score negatively. Applying for a CC and checking your credit score dings your credit in the exact same way……it makes your score lower because it appears that you are credit seeking.

   3. Carry a balance. This might seem counter-intuitive but actually PAYING a fee each month raises your score because it shows you are capable of making payments if the amount ever exceeds your ability to pay the bill in full. Paying in full will not harm your credit…but if you are looking to build credit quickly…making payments will significantly speed up the process.

   4. DO NOT go overlimit. While its kind of a given that a delinquency will ding your credit..and overlimit fee is actually worse. I cannot even tell you how many times I recieved calls from people stating that they rationalized the card would just decline if there wasn’t enough room for the charge..NO CARD CAN GUARENTEE THAT. Because of pre-authorizations..and the inability of the CC companies to read your mind….there is no way for them to decline every charge that goes through. Certain charges (such as buying gas for your car) will pre-auth as 1 dollar to make sure the card is good..and then come through for the full amount once the transaction detail is recieved by the bank….this often causes people to go overlimit.

   5. Don’t sweat a late fee. This is more for your own piece of mind then anything else. If you are only 3, 5, heck even 20 days late….don’t give up hope…send in that payment ASAP. Your credit doesn’t get dinged until you are 30-days late. If you miss a due date by a couple days probably the worst thing you can do is just wait until the next pay period. Send in your payment ASAP ….and if you’ve never had a late fee before….call the bank and ask them if they will reverse it. I’m not sure how other banks do it…but I know our department had a pretty relaxed reversal policy. Ironically..if you do get a late fee and pay it….that actually HELPS your credit because its seen simply as a bank finance charge that you paid easily…I’m sure I don’t have to tell you..lenders like that.

   6. DO NOT FALL INTO THE BALANCE TRANSFER TRAP!! Rotating your balance is probably the worst thing you can do if you want to raise your credit score in a hurry. Namely because it may take the credit bureaus 3 months to a year to update the fact that the old card is paid off…so it might seem like you have TWICE as much outstanding debt then you actually do. This of course can be forced in a pinch by contacting all 3 credit agencies…but its totally a pain in the neck.

   Long explanation short….have ONE card….try to pay your bills on time..but if you don’t…don’t freak out. If you all ready have more then one card and need to raise your score in a hurry…don’t bother closing them..it won’t show up for at least half a year anyways. And above everything else..DO NOT go overlimit…I cannot stress this enough…Nothing screams irresponsible borrower then someone who exceeds their credit line.

   edit: If you don’t need the extra credit on the credit card you kept….I wouldn’t apply for a credit line increase ….it too dings your credit like a new cc….and with the cards you recently closed its going to show alot of oustanding credit until that gets updated to your history….chances are the credit line increase will simply be declined anyways with the credit crunch the economy is in.

   I personally would not have closed the other credit cards…..but…..as long as nothing horrible happens in the next year or so…..you should be fine. In the future I would stress that while closing a zero balance account doesn’t do anything for your credit…….applying for a new card can hurt it.

6. 

   Ruben G on June 6, 2010 at 6:18 pm

   To start, congratulations on realizing how important your credit score is and trying to improve on it. You are doing some very right things and some not so right things. Based on the information you gave, this is the best way to raise your score.

   1) Paying down your credit card. Excellent, do not send just your minimum balance as it will take years to pay it off, send as much as you can without breaking your wallet.

   2) Raising your limit MAY increase your score. It will give you, what’s called, Additional revolving available, which in turn will raise your score.

   3) Which brings me to the bad, you closed some credit cards, which reduced you available revolving. I’ll explain this in a bit.

   4) Cell phone plans do not report how you pay to the credit agencies, only if you don’t pay will they report, so no big deal changing plans.

   Now for explanations on what revolving balance does for you. There is on your report, a percentage calculating how much revolving available you have. The higher amount you have available, the higher your score. This percentage gives insight to lenders on how you live. If your revolving available is low, it says that you are living off your credit cards and can barely make it on what you making. If it’s high, it show responsibility because you have this credit available but you don’t use it. So closing your accounts just decreased your revolving available, which just might have lowered your score. But this is an easy fix. Just pay down your balance and/or request an increase on your credit limit.

   So at this point and time, I would advise not to apply for additional credit cards just yet. Give yourself 6 months before you request additional credit. Doing too much at once will affect you in a negative way on your credit score. Just keep up the good work and understand it takes time to build your score up.

7. 

   PureOrLady on June 6, 2010 at 6:18 pm

   congrats! nice job (no you should not have cancelled the cards but what’s done is done-you increased your debt/credit available percentage by decreasing the credit available. 3500/7500=50% but 3500/4000=87.5% so it will lower your score–I did the same thing) same principal applies to increasing the credit limit, that will lower you debt % and look better. now pay on time all the time, Call your CC co every 6 months or so, and ask if they can decrease you interest (just cause they will and you can pay it back faster)