Posted on: 18th Jun, 2012 12:12 am
Due to being irresponsible, I have destroyed my credit. But I want to improve my credit. Will it be better to pay off a debt of 2005 and then take out a secured card or should I take out a secured card before paying off? Just not sure what I should do first. Any input is appreciated. Thanks
Hi GP,
If the SOL period for that debt in your state is not over, then you can pay off the debt in full and then take out a secured credit card in order to further improve your score. Paying off an old debt will have positive impact on your credit scores.
Thanks
If the SOL period for that debt in your state is not over, then you can pay off the debt in full and then take out a secured credit card in order to further improve your score. Paying off an old debt will have positive impact on your credit scores.
Thanks
Keep in mind that credit items stay on your record for 7 years. If you pay off a debt, the 7 years will start over. Since the 2005 debt should drop off soon (from the date of last payment), I would not pay off the debt.
It is my understanding that whether the debt was paid off or not has little impact on your credit score.
It is my understanding that whether the debt was paid off or not has little impact on your credit score.
Based upon the age of this debt, there's a good chance it's very close to falling off your credit reports. Do you know what the DOFD (Date of First Delinquency) is?
I would also go ahead and get yourself a secured credit card so you can begin building positive payment history again. There's no reason to wait on that. Once you get the card, make sure that you keep your credit utilization ratio low (under 10% if possible) and always pay your bills in full and on time.
I would also go ahead and get yourself a secured credit card so you can begin building positive payment history again. There's no reason to wait on that. Once you get the card, make sure that you keep your credit utilization ratio low (under 10% if possible) and always pay your bills in full and on time.
It is nice that you have realized that you were responsible for your poor credit situation. Now, your first priority would be to repay the earlier debts first. Only thereafter you can think of taking out a new secured debt.
You can also take professional help who will analyze your financial situation carefully and will offer you the right solutions.