Quote:
Originally Posted by Pushead2
So my credit score is considered average, but upon looking through it recently, I have one card that went into collection in 2010.
I clearly remember having it, being a jackass when I was younger and I just let it go thinking it was no big deal. After doing a lot of research, it seems like there are a bunch of answers on what I should with that collection.
I would like my credit score to improve (who wouldn't?) but some people have written that it could possibly bring my score down because it would make it "recent". Other people have put to let it take its course for 7 years and it'll disappear.
Has anyone here gone through the credit rebuild? Or even my situation of just trying to get it from average to great credit?
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You can do what's called a "pay for delete". If you haven't paid off the debt, write a letter (actual letter!) to the collection agency offering to settle the debt. You can pay in full if you want (or try to negotiate a lower settlement), but stipulate in WRITING that you wish to have the collection deleted from your record. If they call you, ask for correspondence in writing prior to paying them to leave a paper trail. I did this with several creditors from my past who didn't even put up a fight and immediately removed derogatory marks from my record. Google around for some pay for delete letter templates, not too hard to find. Otherwise you have to wait 7 years for the record to drop off.
Otherwise, the keys to having a good credit score are:
1. Open revolving balance (credit balances available to you)
2. Debt utilization between 1-20% of your total revolving balance
3. Number of open accounts (the more the better, to a point)
4. Average age of open accounts (anything 3-4 years and over is decent)
5. No derogatory marks
6. Keep hard credit inquiries low (under 5)
7. Good mix of revolving and installment accounts (credit cards and loans)
Creditkarma.com is an excellent tool, and free. The estimated score is usually very close to the actual score, and you can manage your accounts through it.