554 credit score...Credit Repair or DIY?

Question

I only have two blemishes on my credit report( a hospital bill and a old gym membership) but i didn’t have any credit prior to the blemishes. I’ve gotten very serious about going the entrepreneurial (rental properties and a trucking company) route and i know a 700+ credit score would speed up the process. I wanted to know which option would be quicker or smarter.

side note: I don’t have any credit cards. should i get one?

Account Closed · Answer

Typically you need 3 lines of credit (cell phone, credit cards, auto loan, etc) to establish credit. Make sure they are reporting to the 3 credit reporting companies.  The cards need to be used and paid monthly on time. Try to keep them paid down to about 10% to 20% of the available credit. So, if the card is $500 make sure you use less than $400 on that card during the month and when you make your payment pay it down leaving about $50 - $60 balance. You don't need to pay it off every month. Credit Unions and other banks offer "secured" credit cards, where you put $500 in a savings account and they issue a $500 "secured" credit card.

As for the gym membership and hospital bill, if they are more than a couple of years old you can "challenge" the information. There are samples online of how to do that. If they are recent and not too big, it's simpler to pay them off. What you don't want to do is make a payment on an old debt. It starts the clock all over again.

What creditors want is to be paid on time in the correct amount. Remember, you are borrowing soneone's money and they could have invested that in real estate just like you. They want their money back on time, as agreed.