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Valued Contributor
Posts: 1,084
Registered: ‎06-24-2007
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Re: I need to raise my fico score really quick I want to buy a house

If I pay my collection account it will lower down my debt so I might get a little jump in my fico score. What do you think?
Regular Contributor
Posts: 226
Registered: ‎03-25-2007
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Re: I need to raise my fico score really quick I want to buy a house

When I paid off the balances owed on my charge offs and collections, I gained about 80 fico points on all three reports.  The only benefit to score came from the resulting reduction to my utilization.  Paying the collection didn't help, it was the reducing the amount owed.
 
Running the fico simulator was helpful in understanding how this works.  When you run the simulator against a report, it will say how much outstanding balances and any past due amounts.  It will allow you to run simulations on how your score will improve by paying off these balances.  However,  predicted improvement is not very accurate.
 
Since 30% of your fico score is utilization, it can have a big impact on your score.  Say you have two open CCs with a total of $600 available credit.  If you owe $3000 on your collections and charge offs, your credit utilization is 500% vs the 1-9% that is ideal.  30% of the fico score is about 150 points, so you are going to see a big jump.  I saw 80 pts in my situation.
 
What's great in your situation is that when you do this, you may well find yourself able to qualify for a prime mortgage in a few months.  That's what I'm looking at doing now.  Don't worry, be happy!
Valued Contributor
Posts: 1,084
Registered: ‎06-24-2007
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Re: I need to raise my fico score really quick I want to buy a house

You have not had enough debt experience. [TransUnion] A healthy balance of credit and loan accounts is key to achieving a high credit score. It is important to build a record of responsible credit use over time with different types of accounts. Consider opening a new account to strengthen your credit report and improve your score.
 
 
What is the easiest credit card to get? Do you think imagine or tribute kind of cards would help? I need to open few accounts.
 
Thanks
 
Regular Contributor
Posts: 226
Registered: ‎03-25-2007
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Re: I need to raise my fico score really quick I want to buy a house

HSBC and Orchard are consistenly touted as good builder cards.  They're the ones I have, but it wont be a quick fix for increasing your score...
Valued Contributor
Posts: 1,084
Registered: ‎06-24-2007
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Re: I need to raise my fico score really quick I want to buy a house

Thanks for your message Rocket. You are right I used the same simulator. It tells me  50 to 100 points jump in my fico score if I pay off my outstanding debt.
Thanks
 
 
Regular Contributor
Posts: 226
Registered: ‎03-25-2007
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Re: I need to raise my fico score really quick I want to buy a house

No problem.  It's been a big load off by learning and taking the advice I got from here.  I was really surprised how quickly things turned around!
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