How Can I Quickly Better My Credit Score ?!!!
I recently requested a loan of $20k and was denied due to a credit card with a $1500 limit that is in collections. I would like to pay this off, but wish to borrow this money within the next 2 months. Will my credit score go up enough by then if I pay it off? My current score is 550. Thanks for any help you can offer.
The Answer : While it would be a good idea to pay it off, you need to keep in mind that paying it off, isn't going to be enough. 35% of your credit score is based on payment history, so with that credit card being in collection, it's damaged your score. Even if you did pay it off, the negative payment history would still show.
The only chance in that would be to negotiate a "pay to delete" meaning that the balance would be paid in exchange for it being removed from the credit report. Keep in mind that while it's not totally impossible to get this done, it doesn't happen often. If you get them to agree to it, make sure you get something in writing on their company letterhead from them before sending any money.
While it will help your score in the long run doing this, there are also other factors to take into consideration. By removing that credit card in collections and it by chance was the only credit card you had, then you haven't established enough revolving credit. Or also you've lost points on your score for applying for that 20K loan and got denied. My suggestion would be to pay the balances on all your cards to where they're 30% or less of the avaiable credit, and try to negotiate that pay for delete I mentioned earlier.
Even if you would've gotten approved for that loan, the interest that would be charged would be outrageously obscene, especially with a mid-500 score. You're more than welcome to try any ideas you might have gotten from mine or anyone else's answer on here for that matter, but understand that even after doing all that, you still might not get approved.Good Luck!
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