Q: First, let me start by saying thanks for all the wonderful advice. I listen to you on Sundays and when you fill in for Clark Howard. With the information you have given me I am looking to be debt free except for my mortgage within the next few months.
I have paid down my debt from about $30,000 to $9,000 in the last year and a half. I have even taken your advice about getting and keeping up with your credit report.
My credit score is currently in the high 500s, which I know is not that good, but can only imagine what it was before all this work I have been doing to clean up my credit score.
My question is regarding duplicate information on my credit report. I have an credit card that was closed by the creditor. They said it was stolen so they sent me a new card with a new number. Does that affect my credit score? It shows up on my credit history two times? I have another creditor with a similar situation.
Now that I’m paying my bills on time, how long do you think it should take to get my credit score to at least 700?
A: First, congratulations on making such tremendous progress on paying down your debt in the past 18 months! That’s a huge accomplishment, and I’m sure you’re feeling the weight start to lift from your shoulders.
The fact that you have a new number for your existing credit card account shouldn’t affect your credit score at all. But you should talk to the security department, just to make sure they’re not showing that the account was closed because you mismanaged the account, but because of fraud.
If you’re paying your bills on time and you’re paying down your debt, and you don’t have any lingering negative pieces of information, your score should rise into the 600s within the year and hopefully by next year (after your debt is paid off) to perhaps 700. Part of that number hinges on not having any late pays, and part of it is managing credit over the long haul. Having the same credit card for 20 years can add 25 more points to your credit score compared with having the same credit card for 15 years.
The good news is that once you clean up your credit history, your credit score should start to rise. I’d stay on top of it. Don’t open up any new charge accounts. Make sure your balance is paid in full and on time, and do make sure to keep checking your credit history regularly so that you don’t become a victim of identity theft.
Thanks for listening to me on Newstalk 750 WSB. I love knowing you’re out there!
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