Question: I ran up almost $6,000 on a half-dozen credit cards – buying women clothes and my buddies beer. I was late on payments and got lots of unfriendly calls from bill collectors.
Then last year, I grew up and got engaged. I got a better job and a weekend job and paid off all of those bills. But my credit score still sucks! How long before it doesn’t suck? And is there anything I can do to make it not suck faster? We’re getting married next year, and we want to buy a house. Help!
— Bryan in Pennsylvania
Howard Dvorkin CPA answers…
First off, congratulations. Not only did you realize you had a problem, you buckled down and fixed it. You will be rewarded with a higher credit score. Sadly, I can’t tell you exactly when.
Why? Because you’re dealing with a lot of variables. Here are some questions for you…
1. Have you checked your credit report for errors?
It’s more common than you think. The Federal Trade Commission says one in every five credit reports has some kind of mistake on it. How do you find and fix these mistakes? Follow Debt.com’s Step-By-Step Credit Repair Plan.
2. Do you still have your credit cards? Or did you cut them up?
Credit scores are simple numbers with complicated mathematics behind them. Broadly speaking, there are five factors that determine your credit score – the biggest being your payment history, which makes sense. But a big chunk is length of credit history. So if you didn’t close out your credit cards, keep them open. You can learn more here: Understanding Your FICO Credit Score.
3. How long has it been since you paid everything off?
Depending on your circumstances, it can take months for everything to register. You might want to consider a credit repair service just to make sure your messy situation is cleaned up. Be careful, however: This is an industry that’s seen its share of unscrupulous businesses. Check out our section called Setting Credit Repair Expectations to see if you could benefit from such a service, and how to find the right one.
Bottom line, Bryan: You did the right thing, and with a little effort and patience, your score will reflect your hard work in just a little while.
Have a debt question?
Email your question to firstname.lastname@example.org and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.