Back in 2005 I had a dismal credit score, but a year later after I made some smart moves my credit score skyrocketed from around 500 to 744. Since I’ve been on the market to buy some real estate property having my credit score so fresh and so clean is of the utmost importance and so I’ve written about my score woes quite a bit. My most popular post (10 Ways to Improve Your Fico Score) gets a lot of questions from readers, here’s my answer to 3 questions from isotruth:

So far so good on the jump from 550 to 603. Congrats! I’m glad you’re taking control of the situation with your credit score. It is frustrating since you may not see some of your efforts to improve your score rewarded right away.

1. How can I establish credit and not pay crazy fees?

I had this problem when I started fixing my score. My first recommendation would be to check and see if your bank has any credit cards and try to apply for one of their lower tier cards. They’ll have first hand information on your finances and might help you out. I bank with USAA and Wamu, both of whom helped me get my first credit cards.

If for some reason that doesn’t work out, your next avenue would be to get a secure credit card. Usually you have to pay a $200-$500 deposit to setup a secure card and essentially you are taking credit out against yourself. You have to pay the balance in full each month, and it’s a great way to get started on establishing credit especially if you’ve had some problems in the past. I found these secure credit cards that should help you get started:

Make sure you stay on top of these cards, because if you don’t pay them on time, guess what? They go on your credit report. That almost defeats the purpose of having a secured card — which are supposed to be like training wheels on your credit. Once you outgrow these guys you move on to the better cards with better rates. One thing you have to keep in mind about other non-secured credit cards is that if you don’t have a good credit score you’re not likely to be eligible for the cards that have good rates and no fees.

2. How long does it take for a collection notice to be removed from my credit report?

It will take up to 7 years to for collection notice and other negative marks on your credit report to be removed. After which time you can contact the 3 credit reporting bureaus Experian, Equifax, and Transunion to have them removed. You have to be cautious though when dealing with collection agencies because they often times use whatever trickery they can to get their money. There are times when NOT paying off old collections is advisable, especially if it’s close to being written off. Beware if you contact the collection agency or make any reference to paying off the account — they will try to use such communication as justification for changing the initial account date which in effect will make you wait beyond the original 7 years! This is a scam. Remember paying off collection debts doesn’t do anything to increase your credit score!

3. I have some collections paid and I saw that if they are paid it takes 2 years to fall off your credit report. Is this true?

Nope, see the previous answer. 7 years!

Try the Suze Orman Credit Report Repair Kit or if you worried about your score changing you should try the Score Watch that will give you updates to your credit report any time there is a change or inquery! I’ve used both of them =)