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HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

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Anonymous
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HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

Until about 3 months ago, I had about 3 maxed out credit cards, a maxed out HELOC, no savings, little income, and two properties with 2 non jumbo mortgages. I knew my score was awful. I didn't even want to know HOW awful. Seems my current score is 690. I need it to move up so I can buy more real estate at better rates. And I have just made a bunch of mistakes that would hurt me more than help me....how do I fix them?? I sold my rental property, paid off that mortgage, paid off all CC's, paid the HELOC to $0 (had $300K available), and closed two of three CC's before I knew I should have left them open(the Gold Amex and Gold Citicard....oops). I also have cash in a CD, a ROTH IRA,a keough acct, and an HSA Medical insurance policy (none of which I had before). I have now moved to another state, I am renting my old home and living in a home I "bought" with my boyfriend...60/40 but I am paying my 40% share (about $500K) via HIS mortgage of $625K @7.5%(so I can't deduct it, which is fine since my income is too low anyway)....because HIS credit score was just under 700 due to an old late payment problem. Bottom line....none of this is affecting my score, since I am not on the mortgage, but I can't make the payments forever so I need to develop a plan for this.....do I use my cash to "buy" my 40%, or do I leverage it elsewhere? Now I have one CC with a $31K limit....they offered more, I refused. I was at my limit last month, I paid it off in full, using some of my available HELOC credit. (OOPS) I opened a Saks card for the 10% discount....and paid off the entire balance at once, but it is new, and open. I applied for a new CC (I forget which) after hearing I should have a low balance to available credit ratio (OOPS) and now I see I shouldn't have applied for new credit if I wanted to raise my score. I didn't really intend to use the card, or perhaps I would just use it as my personal card and keep my Merrill Lynch card strictly business(I am a freelance photographer). Clearly, I have multiple issue here. Anyone have advice on how to move forward?
Message 1 of 13
12 REPLIES 12
Anonymous
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Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

One thing you may be able to do is to call and reopen some of the closedcards, Amex is good for this. For mortgage, your scores aren't bad
Message 2 of 13
SonorityGenius
Established Contributor

Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

Am I reading this correctly??

Your income is too low, you're a freelance photographer, and you are in a mortgage with a boyfriend and your share is 40% which = 500k???????? or is it 40% OF 500k?

Either way.. one summarizes your situation in your own words, OOPS.
 
You paid a maxed out 31k card from your HELOC..
 
I agree with Brammy, call them and see if they would reopen.. no other way, your internal payment history with Amex (for the gold charge) should have been good..
 
Anyway.. I would seriously reevaluate spending pattern///avail income
Message 3 of 13
Anonymous
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Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?



SonorityGenius wrote:
Am I reading this correctly??

Your income is too low, you're a freelance photographer, and you are in a mortgage with a boyfriend and your share is 40% which = 500k???????? or is it 40% OF 500k?

Either way.. one summarizes your situation in your own words, OOPS.
 
You paid a maxed out 31k card from your HELOC..
 
I agree with Brammy, call them and see if they would reopen.. no other way, your internal payment history with Amex (for the gold charge) should have been good..
 
Anyway.. I would seriously reevaluate spending pattern///avail income



Agree w/ two above, call to repopen, and I WOULD NOT be investing in real estate anymore unless you can cover BOTH MORTGAGES entirely w/o a bat of an eye.
 
I would seriously rethink paying a mortgage w/o your name being on it- you will have to figure out what you want to do.
Message 4 of 13
Anonymous
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Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

PS- additionally- investing in real estate plus your current mortgage you need to add 40 perc. minimum to each mortg. payment to figure in all utils, taxes etc.
Message 5 of 13
Anonymous
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Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

Well everyone KNOWS how I feel about joint debt.  ESPECIALLY debt that you get no benefit from...  Worse comes to worsde, you have just help an ex-BF buy a house and your credit is a hardware tool.
Message 6 of 13
Anonymous
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Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

Reason I say NOT TO invest at this time it is appears you are barely squeeking by- so why would you add trying to purchase another house- no matter how low you could get it- cuz you are barely getting by now.
 
Try to turn the "freelance" into full- time.
Message 7 of 13
Anonymous
Not applicable

Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?



Brammy wrote:
Well everyone KNOWS how I feel about joint debt.  ESPECIALLY debt that you get no benefit from...  Worse comes to worsde, you have just help an ex-BF buy a house and your credit is a hardware tool.


Ditto. Ran into this situation a couple of years ago buying a pre foreclosure, had I known then how bad it is to NOT HAVE YOUR NAME on the docs. and title. would have never done it. Oh well, situation is rectified now.
Message 8 of 13
Anonymous
Not applicable

Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

Well, there was a little information missing. I have $350K in a CD...I'm just not sure how to use it best. I have a rental property that pays for itself (though I am concerned my equity is too high (about $1.3M) and could be put to better use by selling and buying 2 smaller places). The mortgage there is $320K at 6.25%, interest only and fully deductible. I am on title for 40% of the home I live in with the boyfriend (but NOT on the mortgage)...and I just want to do the smart thing before I pay down the mtg. with my cash. Do I pay down my 40% (yes, $500K is MY share) as much as possible, and keep paying $150K @7.5% to him? (I would refi if I had a better credit score) I will call Amex about re-opening card. I was a perfect customer for 20+ years. Won't that show up as "applying for new credit? I also learned TransUnion still showed my old loan on the books...though it was paid off in Sept. I have written the letter to fix that too. Still trying to do the right thing, and grow my money as fast as I can.
Message 9 of 13
Anonymous
Not applicable

Re: HOW TO CORRECT CREDIT LOWERING MISTAKES OF CLOSING $0 BAL. CARDS and OPENING NEW ONES?

Your CD should stay where it is- that is why you put money in a CD. Yes, you should buy out your portion of the house and refinance together, there is not a reason in the world to keep going w/o your name on the loan- not just the title.
 
I have never heard of a title that says you have "40" percent of the house- you are either on the title or not. Still that doesn't matter- you are not getting Fico credit for on time payments for your work.  A 690 and little over 700 together will not be bad at a CU for trying to refinance, however, I am wondering- not trying to be mean, but unless you and boyfriend are going to get married- do you want to owe for a house that you might break up over? You will have to think about this one.
 
Still something is not making sense- why is it you have so much money and yet score are a little bit below 720. You dont' have far to go.
 
On the rental house that pays for itself- it won't pay for itself if your renters default and  can't pay their bills. That is what I mean that you should make plans for what happens if you have to evict them and pay ALL the bills, not just the mortgage, but everything that goes along w/ it- utils, taxes, any extras.
 
As far as buying two more properties and liquidating the one that you have, again, if no one can pay the mortgage what point is it? You must ALWAYS be prepared for them to walk out on you unless the mortgage is totally paid. And even if it is, you still have all the extra's to contend with.
 
Again, there is something missing here, why did your scores take a dip if everything else is ok? You say you maxed out everything else and just paid it off- what made it get that way? If you just paid everything off- you will see a jump w/in a couple of mos.
 
Any baddies, etc?


Message Edited by netpanther on 12-18-2007 05:17 PM
Message 10 of 13
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