rebuilding questions

[Anonymous]

Hello all!  Lurker here with a question.

My situation now:

Auto loan through Nissan Finance: $19,200

Merrick Bank CC: 1600 Credit limit - $600 used

Credit One Bank CC: 1100 Credit limit - $300 used

Capital One Venture CC: $3500 Credit limit - $400 used

Capital One MC: $300 Credit limit - $0 used

Amazon Store Card: $900 Credit limit - $600 used

Walmart Store Card: $900 Credit limit - $340 used

Lowes Store Card: $500 Credit limit - $0 used

Motorcycle Loan through Yamaha Finance - $9.585

My scores range from 610 - 658 depending on which report is pulled.

My question is I will be looking at applying for a home mortgage in 2 - 2.5 years.  I know that I should start paying down these balances of course and I am working on that now, however, should I refinance my auto loan?  I think I can get the interest rate down a couple points.  If I refinance, will that make it a "new" account on my report?

Also, once I have these balances paid, should I just camp for a while and do nothing for the next couple years before I apply for a mortgage?

Thanks for reading and I would love to get the opinions from you guys on what I should and shouldn't be doing for the next couple years?

Josh

[coldnmn]

Welcome to the forum. If and when you go for a mortgage it's a good idea not to apply for anything a year in advance. As far as your auto refinance it will be a new account but in my opinion it makes financial sense to refinance. As far as your credit cards for improving your credit score you can use your credit cards without going over your limit but try to pay all but one off before statement closes. The remaining credit card should post 1%-9% balance and pay off before due date to avoid interest. Good Luck with your financial journey!

[takeshi74]

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@Anonymous wrote:

 I know that I should start paying down these balances of course and I am working on that now

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Definitely keep utilization in mind.  Most of your cards don't look too bad at first glance but $600/$900, for example, is 67% which is high.

How is the rest of your reports?  Any derogs?

[Anonymous]

Great advice guys, thanks!

I do have a few derogatory items that are around 5 years old.  I am really hoping maybe they will fall off my report soon.  

Well, know that I look closer, it looks like there are 5 old collection accounts, all medical - should I pay those immediately or let them fall off?  I would like to pay them for my moral sake as I am sure they are valid.  I would hate for the clock to reset on them though.

Also, cannot believe I forgot these, I have about 18k in student loans, I have never been late on any of my payments for the past 18 months.

Do you guys know why there is such a huge difference in reports from TransUnion and Exp?  According to TU I am a model credit risk, according to Exp I should be shamed in the streets.  Interesting.

thanks for the guidence everyone!!

[jamie123]

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@Anonymous wrote:

Great advice guys, thanks!

I do have a few derogatory items that are around 5 years old.  I am really hoping maybe they will fall off my report soon.  

Well, know that I look closer, it looks like there are 5 old collection accounts, all medical - should I pay those immediately or let them fall off?  I would like to pay them for my moral sake as I am sure they are valid.  I would hate for the clock to reset on them though.

Also, cannot believe I forgot these, I have about 18k in student loans, I have never been late on any of my payments for the past 18 months.

Do you guys know why there is such a huge difference in reports from TransUnion and Exp?  According to TU I am a model credit risk, according to Exp I should be shamed in the streets.  Interesting.

thanks for the guidence everyone!!

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The derogatory items are dragging your scores down. Baddies will stay on your reports for 7 years. If you just pay off the collections IT WILL NOT HAVE A POSITIVE EFFECT ON YOUR SCORES AT ALL! You need to have the baddies REMOVED from your reports. You can find out how to do PFDs (Pay for Delete) in the "Rebuilding Your Credit" forum on this site. Basically you are telling the collection agency: "I'll pay the collection but you have to remove it from my reports." As long as you owe the money you have leverage. As soon as you pay the bill it becomes much more difficult to have the baddies removed.

If you get all your baddies removed and pay down your credit cards to less than 10% of the credit lines your scores should be in the low 700s in my opinion.

[RobertEG]

Many assume that if they just "let it fall off" their credit report, it is gone and no longer affects your credit.

Yes, derogs, once excluded, are hidden from others when they do a normal pull your your credit report, and yes, they no longer affect scoring.

But no, credit report exclusion does not discharge the debt.  It still exists until satisfied.

It can still become known to others and affect their decision making.

it is more than just a moral decision to pay old debt.  It makes the debt go away, and thus removes any future issue should you be asked to disclose any old, unpaid delinquent debt.