Question: Steve is from Atlanta and he has a credit score of 520. He went to a credit repair company and it helped him out with his credit card debt. But a cash loan ended up with a collection agency and his wages were garnished. He's wondering how to improve his credit score.

David: Steve, first of all, what you need to keep in mind is you're not alone in this. A lot of people had their credit score clobbered during the downturn.

A credit score can go as high as 850. Typically, a creditor is looking for a credit score above 620. If you're north of that you're in good shape. If you're in the 700s you're in fine shape. Since we're in the 500s, you're not destitute but you're south of the Mason/Dixon line when it comes to your credit score. You do need to get it above 600 and there are ways to do it.

What you need to do is demonstrate stability. That means is paying your bills, paying any outstanding liens, not missing payments, showing you have a desire and a willingness to pay the bills on time. Your credit score will go up as a result of that.

(The question and answer are edited. You can hear the exchange here.)

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