fastest way to fix credit

[LivingAlmostLarge]

My friend getting divorced has trashed credit. I think 600. What's the fastest way for her to rebuild her credit? She's okay not buying a house I talked her out of it. But should she get a car loan? I mean she could afford to pay cash, she's trying to get out of her super expensive Yukon Denali into a used minivan. But does it makes sense to do maybe $5k over 3 years at say 5% interest?

Use a credit card she can pay monthly? She's been all cash. Her credit is trashed because her ex paid everything late in her name. House mortgage, utilities, etc. She had no CC debt before marriage and still doesn't. She lives now within her means by living on cash. But how to rebuild credit fast? Say within 2 years.

[disneysteve]

Within 2 years, she should be better.

You never need to borrow money or pay interest to improve your credit so the car loan would be a bad idea.

Using a credit card monthly for routine purchases and paying the bill in full and on time will definitely help. The easiest thing there is to have a couple of her normal bills automatically charge to the card.

Also, she needs to be 100% certain that her ex is off all of her accounts and his behavior going forward has no impact on her. I've heard too many stories of people getting divorced but still having joint accounts which is nuts but it happens a lot. She needs to regularly check her credit report also to be sure he doesn't use her information to open any new accounts which also happens.

[Smallsteps]

Most all places where I can see me score ( my credit card company / or sites like Mint etc) , also tell you tips/ reasons why a score is what it is.

If it is all from late payments you can't really speed that up.
Most sites give all the factors and how you scored in each category if I was trying to move my score I would look into those recommendations.

[GoodSteward]

Within 2 years, she should be better.

You never need to borrow money or pay interest to improve your credit so the car loan would be a bad idea.

Using a credit card monthly for routine purchases and paying the bill in full and on time will definitely help. The easiest thing there is to have a couple of her normal bills automatically charge to the card.

As Steve stated, in time, all of her negative marks will have less of an impact. In two years with no negative activity, it will likely improve on its own by the way the scoring algorithm reduces impact with age. However, it likely won't improve to the level you want without new, positive activity.

As Steve also stated, you don't have to borrow money to improve credit, but you do need to show payment history. Technically, a credit card reports "paid as agreed" regardless if there is actually a payment made. Just having an open credit card is likely enough to satisfy that part, however, I would put something on it to show some use and make sure the card stays open as well as get you higher limits over time. Just control how much is reported to show a low utilization, or this could hurt more than help. Keep it under ~9% if you do want to show activity.

Cars are some of the easiest things to get approved for, but with a 600 score, I don't believe you will get 5%, not even on new. You might get 10%-12% on a used van. I would suggest a credit union if necessary. It technically will help if she borrowed a small amount and paid on it for a year or so. Again, she needs as much positive credit history as she can get to re-established herself, so the more items she can report, the faster the history will build up to be "established." However, I wouldn't let a dealer finance you. I would use a local bank or credit union if you have to do this. A dealer will shoot your application to 8-10+ banks, and each pulls your credit. They say all these only count as one pull, and I guess that is true for your score's sake. However, I've been denied credit due to the number of pulls alone, nothing else listed as why. It looks like you are seeking too much credit, which is a high-risk factor. The credit pull amount does matter, and it takes 2 years for those to drop off.

Getting furniture for 6+ months no interest might be a good idea. No fees to finance, and no interest, but it will report. Just don't max out the account. It's revolving usually, so keep the balance to limit low. It's also easy to get approved. She needs to avoid applying for things she likely won't get approved for. Those pulls will hurt in a hurry.

My advice for now -Get a credit card and use it occasionally until the score builds up. If she can pay cash for everything already, she doesn't need credit at the moment. No need in spending money to hurry up and have a score that has no value right now. It just depends on why she needs her score higher. If she is wanting to buy a house, it might be worth the cost of finance charges and interest on a car loan or similar to get it built up faster with more activity.

[LivingAlmostLarge]

No furniture but I thought a car would be best.

[Nutria]

What trashed her credit? If that's not taken care of, then it'll stay low.

[jacklpalmer]

Straight up - pay off debts. That's the best way to improve a credit score. Contrary to popular belief, accruing new debts is not a way to improve a credit score - let alone one's finances.