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How long will it take for my credit scores to increase?

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mpierc01
Member

How long will it take for my credit scores to increase?

Hoping someone can offer me some advice here.  I am looking to purchase my first home with a USDA rural development guaranteed loan.  My income and the property I am looking at are both eligible.  The only thing holding me back- I found out my middle FICO score is 601.  I know that lenders in my area won't consider anything under 620.  I have limited credit history, only established since 2008.  The only things on my credit reports are:

Capital One credit card with a $1000 charge-off in Dec 2008 that was settled in Dec 2009,

4 medical collections from 2007 between $19-$144 that have all been paid in full,

mastercard with a $320 limit that has been open since Nov. 2010 which I pay off completely every month,

CD loan for $500 that I paid over 6mos which I paid off in Dec. 2010. 

I know I messed up with the Capital One card- I got the card while I was in college without a job.  As far as the medical collections go, I had no idea they were there as I was on my parents insurance at the time and assumed that the expenses were paid- I never received any notice that I owed.  I paid these accounts as soon as I saw them. 

I have virtually no debt- my car is paid off, I don't owe any student loans.  I have 3 yrs of rental history and I have never missed a payment or paid late. 

I am looking for advice for what I should do next.  What is my next best move to get my credit scores up?  I would like to be able to get the mortgage by the end of this year if it's possible.  Any input is greatly appreciated.

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mauve
Valued Contributor

Re: How long will it take for my credit scores to increase?

Visit the rebuilding boards.

 

Capital One - call them and ask if there's any way they'll consider reopening your account and removing negative entries.  It is unlikely, but if the answer is "yes", that's the best case scenario.  If they say no, search here and elsewhere for contact info and stories about what's been successful with them.  Write them goodwill letters to get the negative info removed....hopefully just the negative info and not the tradeline.

 

Medical - you can call the OC and ask them if there's any way they'd consider removing the info from your reports, especially since it's paid.  You can also google "HIPAA letter process" (we can't link here) and follow that.  If you go this route, do NOT contact the CA.  It's unclear from your post if you paid the CA or the OC, but she has a letter specifically for medical debts paid to the CA on that site as well.

 

I've read here that you shouldn't open a CC within 12 months of trying to get a mortgage, but it is one of the ways to get your score up when you only have one card open.  I believe that they normally want to see 3 open tradelines reporting, too, so perhaps you really need to try to have 2 more open tradelines reporting.  Look in the bankruptcy forum for their "bankruptcy-friendly" cards sticky - that includes, by score, cards that you're likely to be approved for.  You can also check out whogavemecredit.com for suggestions based on your scores.  I recommend favoring cards without annual fees if possible.  For ideal scoring with 3 credit cards, keep two of them at $0 balances and allow the other to report no more than 9%.  I'd rotate which card has the balance each month.  You're actually going to take a point hit if you're reporting $0 every month, as counterintuitive as that is.  

 



Starting Score: EQ 583 TU04 619 EX 592 (lender pull) 2010
Previous High Score: EQ 700 TU04 712 EX 726
Current Score: EQ 740 TU(Discover) 750 EX(AMEX) 747
Goal Score: 740+ all around


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