I Got My Credit Report But How Can I Improve My Credit Score? – Melissa

“Dear Steve,

I received a credit report print out from all 3 credit bureaus. My credit score ranges from 604-639. I have an outstanding debt from a collection agency for $1500. And another for $183. I have paid a car loan off and I have one credit card with a $250 limit,which is current with a zero balance. I also have a dept store credit card with a zero balance as well. That is pretty much the extent of my credit. I am trying to improve my score in order to rent an apartment on my own.

Will paying off this old debt hurt or help my score? And if so what is the best way to go about paying it off? The first collection agency has offered to settle for 1/2 of what I owe, is this a good idea?
thank you for your time.


Dear Melissa,

I always feel that resolving old debts is a good idea. If you can pay them off, do that. But that alone will not boost up your score. I can give you some general advice but in this case i think you need to click here to buy your credit score and read what the very people that tabulate the credit score have to say about how to increase yours or what specifically is bringing it down.

Typically what I see in situations like yours are people that have resolved bad credit issues but who have not taken the time to generate new good credit to add to their report on an ongoing basis.

I think one of the easiest ways to do this is to get a secured credit card that will report to the major credit bureaus and start getting current good news reported about you.

In addition you should go into the apartment complex management office and ask for their guidance and advice. Show them your credit report and ask what, if anything, needs to be improved to help you qualify. The sales people there want to make their sales numbers by renting, not turning everyone away. Most, if not all, offices will work with you to get you qualified.

Regarding settling the old debt, it could be a good idea. Make sure you get the settlement offer in writing, and make your payment to them by some sort of traceable means so you have proof they got and cashed the payment. Keep that documentation with your most important papers in case someone claims the debt was not paid.

Just keep in mind that the amount of debt forgiven is a taxable event and you’ll have to pay income tax on the forgiven amount but it is cheaper than paying the rest of the debt itself.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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