Christopher Gassler
Christopher Gassler, 25, is just graduating from nursing school in New York City. Despite his straight a’s in school, he still had to take out some student loans, even with help from scholarships. In order to support himself and be able to live in the big city, Gassler pulled a few lines of credit. Month after month, he forgot to pay his rent and his credit card statements. In time, the bills were sent to collection agencies and are currently marked as “UNPAID” on his credit score. Gassler needs to move into a bigger apartment, closer to the hospital he works at, however; he can’t seem to find an apartment that will lease anything to him for a reasonable rate.
Instead of paying the creditors the amount owed, he is paying an outrageous monthly amount for his apartment and cannot seem to save anything, let alone start to think about paying the student loan back. Christopher is currently living in NYC with a credit score of 508, all of his collections accounts are marked “UNPAID” and he has delayed the payments of his student loans and taken a higher interest rate.
What does this score mean?
If you have a credit score around 500, chances are that you already know this is not a great credit score. But, with just a few simple steps, this score can be improved drastically. If you have a credit score around 500, you can be prevented from enjoying some of the best moments in life. For example, you probably would not be able to find a credit card with a desirable interest rate with this credit score, you would have a hard time finding a mortgage lender and you might not even be able to lease an apartment.
How do you get a credit score around 500?
If you find yourself with a credit score around the 500 range, you might have made some of these mistakes with your finances:
- Having bills that you have not paid.
- Having accounts with collection agencies that are not paid.
- Consistently being late on payments.
- Having a recent foreclosure on a house.
- Having more than one item in collections.
- Having claimed bankruptcy recently.
- Having an open loan – for example, a student loan.
How can you improve this credit score?
In order to improve this credit score, consider taking some of the following steps:
1) Get some lines of credit open and make sure to pay off your statement, in full, each month.
2) If you have an account in collections, you should pay the amount due. There is a huge difference between a collection account that is “PAID” and “UNPAID”. This could be the difference in you getting approved for a lease or being rejected.
3) If you have more than one account in collections and do not have the money to pay them all off immediately, you should try paying off the items with the largest monetary value, opposed to the smaller values.
4) If you have troubles with your credit score, you should try talking to a credit counselor. Each credit situation is different and therefore, the solutions vary for each person.
5) Give it time! We know that it can be a lot of pressure to wait for a score to go up. However, this will not happen over night. Time will heal this credit score – if you take necessary measures to help.
