Jim Thomas
Jim Thomas, 23, just graduated from the University of Illinois with a Bachelors Degree of Liberal Arts, majoring in Italian and Journalism. Because Jim’s parents planned for his college, he didn’t have to pay for tuition, books or lodging. In fact, he didn’t have to hold a job throughout college at all. He did, however, open a Blockbuster account in 2009.
He forgot to return a video that he had rented and now he ended up with an account with a collection agency, with a balance of $15.23. He decided to pay the amount, so his credit report would say “PAID” opposed to “UNPAID”. However; now, he is so terrified of ruining his credit further that he won’t open any lines of credit. His score is staying the same, 658. While this score isn’t terrible, he certainly won’t be able to improve it to a desirable score until he takes some action.
What does this score mean?
If you have a score around the 650 range, it is likely that you understand that this score isn’t necessarily bad or good. This score is about 20 points below the national average. With a score of 650, it is unlikely that you will be able to get a loan for a car with a good interest rate, a mortgage or even a credit card with a good interest rate. With this score, you might be able to lease an apartment, but would have trouble getting a personal loan for anything. But, do not worry. This score is simple to fix with just a few simple steps!
How do you get a credit score around 650?
If you find yourself with a credit score around 600, you may have done some of these things with your finances:
- Having an open loan – for example, a student loan.
- Having bills that you have not paid.
- Having accounts with collection agencies that are not paid.
- Not really had a lot of experience with credit cards.
- Not had a lot of experience with other lines of credit.
- Made simple mistakes with credit and not repaired it.
How can you improve this credit score?
In order to improve this credit score, consider taking some of the following steps:
1) 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.
2) 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.
3) 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.
4) Get some lines of credit open and make sure to pay off your statement, in full, each month.
5) 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.
