Awarded money, need assistance

[BlasphemousMusic]

First off my credit score is aroun d 520-530.  I was just finally awarded my disability money and was awarded nearly $20k plus 1300 more a month.  That being said I've been trying to move to get my first home.  I have no been able to buy a home due to my score.

Now, I need help to find out what I should pay off to raise my score and how soon it can get to at least 620.  

I have only 1 credit card and its at it max of 2000.  I have no other loans or cards, just one other debt of my vehicle.  I do have some judgements left I need to pay off and I have some older bad credit card charge offs and old collections.  All will be paid over time but I need to fix this asap.  I want to move within 2 months, before the new school year.   Any advice or even phone numbers I can call (like to transunion or who ever can give me the most direct info) would be appreciated.

[guiness56]

Pay down the CC to a reporting balance of 9% or under.  Utilization is the fastest way to improve your score.  Your entire credit profile will also make a difference.

Paying a collection will not help you at all, and could acutally hurt your score.  If the CA has not updated in a while, once paid, the date will become a current date making it appear newer, thus dropping your score.  FICO scores paid and unpaid collections the same, as a collections.

Are you trying to buy a house in 2 months or just moving to another?  For a mortgage, they normally require everything be paid, depending on the type of loan and the lender.

How many collections and COs do you have?  How old are they?  What is your state statute of limitations on debt?

[BlasphemousMusic]

Trying to move and buy a house, currently renting in another state.

CO's not sure what that is but if its judgements its 5 I think with a total of 3000 and only the one credit card at 2000.  They are around 1-3 years I think.  I live in South Dakota and moving to Minnesota.

I called my CC place and they said they report to the credit agency daily, so im hoping once I pay my card down it will show rather quick.  I did the my fico thing once and put the CC I have at 9% or something and it said my score could go up 100 or so points.  ALl I need to do is hit 620 or 640 I think.  I wanted to just take my money and put it as a down payment on a house but after talking to 2 banks they said they can't do anything unless my score is at 620 middle.

[guiness56]

Don't rely on that simulator.  It is often wrong.

Even if you did manage to get your score to 620 in 2 months by paying down your CC, the other debts would more than likely need to be paid for a mortgage approval.

[PCMedic]

If I am reading the OP's situation right you just received $20K. You have a total of 5K in unpaid debt (2K Credit Card and 3K collections).

I would pay the Credit Card off to a '0' balance.

I would then pay off the remaining collections debt of 3K, but I would also call and work with the CA's to see if you can talk them into a PFD (Pay For Delete).

Considering from the sounds of things these accounts went into collection due to financial hardship resulting from disability, this may not be hard to do.

Also, you do not mention what type of collections these are on your VR's, but if medical, you may also want to look at getting them removed through HIPPA Privacy Rules.

In any case if you legitimately owe the collections pay them off as a paid collection will look much better to any lender doing a manual review of your reports.

[guiness56]

Do not let your only CC report a 0 balance.  FICO does not like that.

There is nothing wrong with a medical collection being on a persons CR.  It is legal.

[coterotie]

Whatever you do, do not tell them about the lump sum settlement.  They will try everything in the world to get you to reveal how you are going to pay them.  They will also try to get your banking information.  Then it is a race to see who will get the money.  Technically since it is a disability settlement they can't touch it.  But, they can grab it and hold it and make you prove it.  This could take months.

So the strategy would be, call them, say your best friend will give you a small amount of money to help you out.  You have other creditors, the one that cuts the best deal gets all the money from your friend.  If you are past the statute of limitations you have a little more flexibility here.  Don't offer more than 20 cents on the dollar with a pay for delete and no 1099.  Give them 24 hours to make a decision, first one that says yes wins.  Then use a Walmart money order to pay.  Do not use anything that can be traced to you.  Keep notes and copies of everything.  Negotiate hard especially if the statute of limitations is passed.  If they agree to 20, tell them someone else agreed to 16, but since they were nice you'll do 18 for them.