Help with credit score

[intookst]

Hello..this is my first time here so excuse me if I don't get all the abbvs down. My problem is that I am trying to get an equity loan on a home that has no mortgage. I was declined because of 2 slow pays and a collection. The sp's were 15 yrs old and after my disputes have been deleted. The collection can go no where, it was a mobile home I stupidly bought 10 yrs ago and had to walk away as the interest was 12% and choking us. My problem is my debt ratio hence the need for a loan. I have acquired too many cards and a change in income .I can only make minimums, which is making matters worse. I have $4000.00 and am wondering if it will do any good to pay on any of them, and if so do I pay the higher balances down or pay some of the smaller ones off. I hate to waste any more money than I already am, and am trying desperately to save my credit to retry for the loan. My scores are 597 on exp & 630 on tu. I do not have any late pays now except for the collection. I do not know where to go for help on this so am trying here:-) Also the collection was posted in 2006 so it is almost 2 yrs old. I need to get my avg score above 620 to be considered so would like to get it a little higher to be safe. I hope someone here can help me out here I really appreciate it....

[Junejer]

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@intookst wrote:

Hello..this is my first time here so excuse me if I don't get all the abbvs down. My problem is that I am trying to get an equity loan on a home that has no mortgage. I was declined because of 2 slow pays and a collection. The sp's were 15 yrs old and after my disputes have been deleted. The collection can go no where, it was a mobile home I stupidly bought 10 yrs ago and had to walk away as the interest was 12% and choking us. My problem is my debt ratio hence the need for a loan. I have acquired too many cards and a change in income .I can only make minimums, which is making matters worse. I have $4000.00 and am wondering if it will do any good to pay on any of them, and if so do I pay the higher balances down or pay some of the smaller ones off. I hate to waste any more money than I already am, and am trying desperately to save my credit to retry for the loan. My scores are 597 on exp & 630 on tu. I do not have any late pays now except for the collection. I do not know where to go for help on this so am trying here:-) Also the collection was posted in 2006 so it is almost 2 yrs old. I need to get my avg score above 620 to be considered so would like to get it a little higher to be safe. I hope someone here can help me out here I really appreciate it....

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Hi intookst, welcome to the forums. Well, definitely getting your CC balances down to a manageable uti will get your scores up. By manageable, I mean 30%. Even better if under 10% uti, both individually and overall.

That said, your D/I ratio should go down as well, as your minimum payments will decrease. What is your current D/I ratio and what is the bank looking for it to be? How much do you have in total credit limits vs how much debt you owe on the CCs. Provide a bit more detail, so that we can begin to assist you.

Also, if you haven't already, please read credit scoring 101 at the top of the threads. Invaluable information.

[intookst]

My % is 48 I believe they want 41%. I owe around 30,000. The limits on most of them are around 1000, but I have 5 that are 2000,and one that is 5000. which they are the ones maxed out. I have 2 vehicles totaling 30,000, we make about 118,000. The only bad mark I have is the surrendered mobile home in 2006. So the only bad credit I have is too much credit. If I pay on the maxed ones and don't get the loan then I have thrown that money away and does paying off the littler ones really do anything for the ratio? I can't use spouse's income since he has a repo from his defunked family business. If I don't get the loan by next month we are just going to let them all go and take the consequences, since there are just to many minimums to make , basically that is just throwing them more money.

[fishbjc]

I'd guess that surrendered mobile home is causing you a big hit. 

Have you thought about a DMP?  My interest on BofA cc is 4%, signature loan is 13%.  That's a heck of a lot better than NOT paying your debts.  I pay about $17 monthly for the handling of the account.  They may be able to get your payments down to a manageable level while cutting the interest.  My signature loan is almost paid off, hallelujah!

As far as the collection goes....the fico powers will be along to tell you how to PROPERLY manage that.

p.s.  If you use the 4k to pay down your debt, you're not throwing it away.  It's money you owe.

Message Edited by fishbjc on 02-06-2008 05:17 PM

[Anonymous]

I would also call each credit card company and request that the interest rate be reduced. If they say no, call back. Some of them might also give a CLI to gelp with ratio.

Start paying the higher interest rate card first, or you will not save any money in the long run....

Good Luck!

[intookst]

You said a sig loan is what you have..I have not been able to qualify for an equity loan on a paid off home so figured I was just sol on any other loan. And yes I would be paying off debt with the 4k but it is a loan from my dad and I would just be adding another payment that I certainly don't need right now. i'm not sure if the collection or the debt ratio is hurting me, but with no lates or missed pymts and a score of only 597 something is surely hurting me....I guess my biggest question here is ...to raise the score ,is it better to pay down the maxed ones or pay off the little ones? As soon as I can get the loan they all get paid off it is just getting there.  I need to get to around a 620 or higher if I can.

[Anonymous]

Your collection is your problem. I paid off a $3000 collection that was about 2 years old. I was lucky enough to have it removed later that month. My scores jumped a total of about 70 points from having it paid and then removed. I went from just over 600 to 677.

If you walked away from the MH and the total you owe isn't outrageous, then that would be what I would look to settle with. If you owe 10k there is a very good chance they might settle for 4k and at least mark it paid. That would raise your score 10-20 points as my guess without knowing your entire situation.

BTW, good luck getting any kind of home related loan if you have a collection on your record as unpaid. Collections hurt but if paid, even settled, it's MUCH better for you when going for a home loan/ELOC/refi etc.

[Junejer]

Hi intookst, if you don't mind sharing a bit more information, we could help you lay out a gameplan a bit better. For example:
             Bal    CL     Int rate
CC #1- $800 $1,000 23.9%
CC #2- $1,000 $1,000 12.0%
Loan $12,000 452.74/mo 10.5%

That way we can help you decide both what is the quickest way to raise your score and help you decide which debts to pay off first. Hope that this makes sense to you.

Message Edited by ByrdMan on 02-07-2008 08:44 AM

[intookst]

Ok I'll try this..

CC

1. $399-$500 

2. $762-$1000

3. $1554-$1000

4. $1484-$1500

5. $732-$1000

6. $862-$965

7. $5080-$5800

8. $2330-$2250

9. $2092-$2000

They all pretty much go on like this and the % is all above 20. My uti is 48%. My score is 601 with the 2 old lates still on there. i need to b @ 630. So with 4k paying off which ones helps the most.

[Anonymous]

I would pay down #3 first because unless you made a typo you are well over the limit on that card. Reduce it from the $1554 down to no more than $900. Then use the rest of the money to pay down your highest Apr's first. Or you can spread the money over all the accounts which will not only drop your over all utility, but also your utility on any given card. This may also give you the biggest jumps in scores. But remember that the lower balances will not show until the statements on those cards reports.

Edit: If you can reach a settlement to pay off the collection, I would pay that after taking care of the #3 card that is over the limit.