What is the fastest way to increase my 490 credit score?

[bryten]

I don't have that much on my credit report. I am currently trying to purchase a brand new car, willing to make down payment of $1500 to 2000. But I am told my score is to low and I don't have enough credit. The biggest item on my report is student loan, which is the only thing positive on there. The rest is a closed out credit account that has gone to collections, in which I have agreed to make 4 payments of $118($120 was paid yesterday, 3 payments of $108 starting in 2 weeks for a cell phone account that's been past due for 2 years. I owe $1,550 revolving charge account on the laptop that I am on right now, plus
$390 to another cell phone carrier and $687 for some other bill. I know my credit didn't get ruined over night and that It won't get fixed over night also. I make $15.49 an hour, plus on September 1, thanks to my union I will receive a 3% pay increase, and on my job anniversary date September 14, I get an automatic pay increase. So what can I do to speed up the process? Do I take the settlement offers in which I won't have to pay as much or should I pay the full amount. That's my situation, what do I have to do to get the vehicle of my choice ( 2010-2008 Cadillac CTS or Nissan Altima Hybrid), instead of a hoopty that might only cost $2000-3000 that would cost a lot in repairs.

[cerin58]

Where are you shopping for cars!?
There should be a TON of choices in that gray area between the '08-'10 models and a rusted out P-O-S... have you looked for a compromise like a '04 Cadillac or Nissan? I get that you need a car and you want it to be reliable, but there are a TON of reliable cars out there that are more than 2 yrs old. Wander to a library (for free!) and check out a consumer reports guide on which makes & models are holding up the best... then start the car search from scratch!

Fixing your credit is going to take time, you said that, and it's true... find a "where I'm at right now" car that is reliable enough to make it 3-5 years, then reassess!

That being said - the other suggestion I can make is that in a month's time when Sept 14 rolls around, live like you never got that 3% increase, as much as you possibly can.
If you were somehow getting by day by day, living without it before... use that extra 3% as part of the money to pay down your past debts fast, and then once those are all taken care of, put that 3% from every paycheck into savings... towards a trade-in and that "next car"... I know, I know 3% doesn't sound like much... but based on the $15.49/hr and a 40 hour workweek, that would be approx $74/mo ...x 5 years = $4440 (x 3 years = $2,664)

Take good care of whatever car you do get now, trade it in in 3-5 years with all that $$ to add to the down payment on the car you *really* wanted, and get the finance terms you wanted thanks to your then your well-healed credit score.

Sorry I don't have a faster answer for you :-/ ... 3-5 years is at least kinda fast since we're all gonna live longer than our parents/grandparents though... right?

[dabbah95]

There is no quick way to improve your credit score. Here's the deal. Anything bad that you do (like letting a debt go into collections) stays on your credit report for 3-7 years. The only way to get something like that off is to pay it up and wait 3-7 years. BTW, the last thing you need to do right now is assume all the debt you would need to buy that car. I suggest downsizing your expectations for a car you can afford to pay cash for. Good luck.

[duane70]

Paying those debts isn't necessarily going to remove them from your credit report.

You should contact the debtor listed on your credit report and request a "Pay For Delete" where you'll settle for a percentage, or pay the whole debt and they'll remove the listing from your credit report. You can also request monthly payment arrangements, where at the end of payment the debt will be deleted.

"Pay For Delete" is very important, because if you just pay the debt the creditor can continue to list it as a delinquent account, which will keep hurting your score.

Lastly, look into ways to build "positive" credit to keep your credit history fresh and growing.

And remember, everything a credit repair agency or lawyer can do to repair your credit, you can do yourself. Find a good credit repair guide, and get to work!

I used the one at http://howtofixyourcreditscore.info and it really worked for me. It came with sample letters I could use to make arrangements and file disputes.

The best part is, it also taught me how credit scores work, and what I can do to raise my score. It really saved my credit.

[finian]

2010-2008 Cadillac CTS
Avg. Paid:$34,406 - $47,444
http://usnews.rankingsandreviews.com/cars-trucks/Cadillac_CTS/

Nissan Altima Hybrid
Avg. Paid:$25,663 - $25,663
http://usnews.rankingsandreviews.com/cars-trucks/Nissan_Altima-Hybrid/

$352 .... balance remaining on collections $472 ($120 paid already)
$324 .... cell phone account past due
$1550 .. laptop
$390 .... other cell phone carrier
$687 .... other bill
$3303 .. total, plus student loan

It looks like you have up to $2000 cash in hand, debts outstanding, and are nevertheless looking to borrow substantial money. Repayments on $23,000 ($25k car price with $2k paid as deposit) - at 6% over 5 years means monthly payments about $406.
http://www.bankrate.com/calculators/auto/low-interest-auto-finance-calculator.aspx

The first car you mentioned costs $35k upwards new. Repayments $600 monthly.
A 2007 version can be got for about $18k - almost half price. To find one, check the Used Car button on the top webpage. Repayments $271. Both calculations assumed $2k paid as cash deposit. I know which repayment price I’d prefer !!!!

The reason you have been refused car finance is that you have proved unreliable in the past. You need to work a bit on establishing your overall credibility.

As things are, car finance approval is unlikely right now. But you could make the effort to pay off the existing $3303, then join your local credit union and start saving weekly. By the time you qualify to apply for a loan, you will have built up a fresh “history” there, and approval is much more likely. But go for a 2007 or earlier car - you simply can’t afford a newer one.

[phinehas]

Put that Cadillac on hold for a while. With 15.45/hour. Cadillac is too much money for your wages. Buy a used car to run 5-7 years until your credit report clean.
No quick fix in this life. Every quick fix will get you into another quick fix, so slow down, take care one thing first. Save up for cash and when you ready, pay cash for it.

Have you heard: " borrower is a slave to a lender"?

David is right, Put money in 401k, Roth IRA for your retirement instead of material thing, junk stuff that will get you in debt. Don't be stupid, you are smater than that. Only security is CASH in the bank. So smart up, learn to invest with your money not wasting it.

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