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Can I get an installment Loan with a 530 credit score?

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sjrpainting



Joined: 27 Jan 2009
sjrpainting's page
Posts: 1



31 Magic Points

Subject: Can I get an installment Loan with a 530 credit score?
 
Posted on Tue Jan 27, 2009 2:25 am  

Husband is self employed, and we fell behind in bills last Jan-Feb '08. I began working in Feb. '08, and have been paying down credit card debt since. The balances were all over limit, but I have now gotten them to under the limit (not by much). The cards that are still open have all payments on time for 5-11 mos. 2 of my cards closed for behind 90 days (Dec '07, Jan & Feb), but I have continued to make those payments on time as well. The active accounts still show late payments from Jan. & Feb., but all else is paid as agreed. My latest FICO score from 12/08 is 530. Any way a bank would give me a loan for $1,500, to consolidate some debt, so I can improve credit score by reducing credit card debt, and making monthly payments to loan on time?
carol

carol

Joined: 27 Jun 2006
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Posts: 1299
Location: Los Angeles, California


30028 Magic Points

 
Posted on Tue Jan 27, 2009 5:52 am  

Even if you get a debt consolidation loan to pay off the existing debt, your credit score will improve only if the creditor agrees to pay for deletion agreement. If the creditor agrees for PFD in writing, then only after you pay off the debt, the late mark will be deleted from your credit report else it will only show as "paid" or "settled" in your credit report and will stay there as negative for seven years. Since your credit score is very low (530), it will take much time about a year or so to take it back to 600 levels.
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Justin

Justin

Joined: 17 Jul 2006
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28944 Magic Points

 
Posted on Tue Jan 27, 2009 9:51 am  

Yes, paying off debts in full does not mean that your credit score will improve because the debts will remain as negative in your credit report even after you pay them off. The only difference will be that the nature of the debt will change to "paid as agreed" or "paid in full". However, a PFD agreement will help you to improve your score, but it is very difficult to make your creditor agree to pay for deletion. However, if the creditor agree to it, get the agreement in writing. 530 is not a good score and to improve it, you need to make timely repayments on your outstanding debts so as to improve your credit history.
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Justin
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Posted on Wed Jan 28, 2009 6:22 am  

Review your credit report and verify that all the information and history is accurate. If not you can dispute it by contacting the bureau, either by mail, or online.

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