Why Is My Credit Score So Low
Q: With the new year upon us I decided I should check my credit score. I was rather surprised that it came back with a score of 587. I thought my credit was pretty decent. I carry no balances on credit cards, have a car paid off, spend only 14% of my income on housing, pay all my bills on time, have 6 months of emergancy fund in a high-interest savings account, etc. What can I do to raise my score?
A: Is "potentially negative" like being "somewhat pregnant"? These are huge craters in your credit. They are two charge offs due to non-payment. Of the 6 items on your record, 1/3 are credit disasters. The charge-off for the work credit card should be investigated. If you paid the bill, it should be ok. If the employer failed to pay the bill, then it shouldn't be your fault. Try disputing it using the official formal dispute procedure. That would be the procedure that is documented at each of the credit agencies, not one from the back of a cracker jack box. If you don't do it right, it isn't legal or binding. The $500 bank thing should be cleaned up. What has happened is that the bank gave up on you, and sold the debt to a boiler room company for something like $8. Anything over $8 that the boiler room people get is a windfall. Since the debt was just sold, it likely just started to be reported, and will stay out there for many years. The quicker you take care of it, the quicker it goes away. Offer $100, and they will likely be tickled pink. Just make sure you get any offer for settlement in writing first, and pay only by money order or certified check. Not following these two rules will likely end up with you getting screwed by these people. If you write a check, they will try to draft your account later for more money. If you don't get the deal in writing, they will forget about the deal and consider your money just one payment. .
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