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Expat28
Posts: 4
Registered: ‎09-07-2010
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629 credit score, 100K income - not sure what to do next

[ Edited ]

Good afternoon helpful community!

 

I've been trying for a couple months to get my credit score back on track.  I have a 629 FICO Equifax score which comes from 2 delinquent accounts (now in collections) from 4 years ago and 2 Public records notices - a $10K tax lien (now paid) and a $1200 student loan (now paid).  It seems from what I've read here that none of those will drop off my record for at least 3 years and that it won't help my credit score to pay off the accounts in collections.

 

My most recent late payment was more than 4 years ago and the average age of my accounts is only 6 years (11 years being the longest).

 

So I am a bit lost as to what to do next.  I have no credit cards and no loans (and no debt) and I make $100K per year. 

 

  • I applied for the "Average Credit" Capital One Rewards card but was declined and told not to re-apply for another card for 45 days
  • Orchard Bank only approved me for a secured card and I just sent them my $500 deposit
  • Also applied for Best Buy RewardZone because some people here said "everyone gets approved" - and got declined :smileysad:

Seems I don't qualify for a car or home loan (not that I need either at the moment although I would buy/lease a car if it helped me) but I want to build my credit for the future so I can someday buy a house and just generally build a healthy credit history.  After getting declined twice this week, I am afraid any more credit card applications will adversely affect my credit.

 

Any advice on what more I can be doing now?  I feel stuck.


Thanks for your advice.


Starting Score (9/1/10): EQ: 629 -- EX: 594
Current Score (9/1/10): EQ: 629 -- EX: 594
Goal Score (9/1/11): EQ: 740 -- EX: 720


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Regular Contributor
Laurenlou
Posts: 143
Registered: ‎05-29-2008
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Re: 629 credit score, 100K income - not sure what to do next

I'm not an expert so I won't try to answer your questions... I just wanted to wish you luck and tell you you're in the right place. 2 years ago I came here with scores in the low 500's. Now I'm in the mid 600's and have recently been able to purchase my own home with the help of all of these guys! Good luck!

Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010
0

Re: 629 credit score, 100K income - not sure what to do next

Try to get two national credit cards - Orchard secured will be one.

 

I joined a Credit Union (Navy Federal based on my father's retired military status), but look for one in your area.  Apply for a Credit Card from the CU, or do a one-two secured approach.  Put money (as much as you can tie up) into a Savings account, take a secured installment loan.  Then put those proceeds into savings and get a secured credit card. 

 

This way you wind up with two cards and an installment loan reporting to the bureaus.  Use the cards sparingly, try to keep utilization below 10% at the time they report - you'll see others talking about this on the boards here.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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Established Member
FalGra
Posts: 16
Registered: ‎08-18-2010
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Re: 629 credit score, 100K income - not sure what to do next

I signed up with Navy Federal a few months ago. Just to attempt that. I went into the office to open a $2k secured loan. I was told that they do not report secured loans against any of the 3 CRA's unless you default. I declined and switched to another credit union, but they have only been reporting to EQ. Obviously not ideal.

 

The sad part is, the lady was probably clueless and told me the wrong info about reporting. The worst part is that was the world headquarters branch...which is here in my city. So if you indeed did this yourself at Navy Federal can you report what CRA's and how often they actually report?


Starting Score: 510
Current Score: 652
Goal Score: 780


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New Member
stevenmixon
Posts: 24
Registered: ‎09-04-2010
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Re: 629 credit score, 100K income - not sure what to do next

Just be patient on the ed loans and tax lien. They will count less and less every year and eventually will go away. The thing hurting your score now is not having any open credit lines. Get at LEAST 2 major CC like a Capital One Secured CC and one other. Try to stay away from smaller cards like Orchard, Tribute, First Premier and never do pre-paid cards as 99% of these dont report. The 1% that does usually only reports once and usually only to one bureau.

 

Next I would do a large CD secured loan for say $20,000.00 and drag the payments out over at least 3 years. Take the loan check and put it in a savings account and set the loan payments for direct draft and put the extra interest in the savings as well so it is one of those sign up for it and forget about it. Granted your out 20k for three - five years depending on the length of the CD but it will build your credit and you dont have to worry about making payments.

 

Your income has no influence whatsoever on your credit score. They only reason your income would be related to your credit is for the lender to figure out what credit limit to approve you for.

 

Department store cards are another thing that helps your credit granted not alot as compared to installment loans or major CC but all combined will give you an attractive credit "profile". Which is what lenders are looking for. All lenders are different so there ideal profile may differ greatly from this. Just pay on time, wait for those derogs to fall off, open a couple CC and use them responsibly and try to keep balances below 15-30% and always carry a very small balance. Even if its only $10 on a CC with $10,000 limit. Lenders look to see that you can handle a balance and make payments to pay it off. If you always show a 0 balance (paying off CC every month) lenders will see that they arent going to make extra money (interest) so will more than likely either give you a higher CC rate or not approve you based on your score.

 

Either way you need to get some positive items on your report and keep them open and current. keep your debt to credit ratio as low as possible, and always carry a small balance, and pay on time and you should see your score increase slowly over time.

 

Do all this over a 6 - 12 month period as even though having credit improves your score it will initially bring it down because of inquiries and new credit w/ "no payment history".

 

There is no "quick fix"! Repeat this with me THERE IS NO QUICK FIX FOR CREDIT REPAIR!!!!!! It takes time. At the very lease it will take 30 days. I personally have been improving my credit over the last 6 months and I have only gotten some not all negative items removed.

 

So just be patient and keep your eyes on the prize!

 

Good Luck


Starting Score: Ex - 545, Eq - 566, TU - 552
Current Score: Ex - 720, Eq - 711, TU - 718
Goal Score: 3 - 850's


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Moderator Emeritus
MarineVietVet
Posts: 14,084
Registered: ‎07-14-2009
0

Re: 629 credit score, 100K income - not sure what to do next

 


stevenmixon wrote:

Just be patient on the ed loans and tax lien. They will count less and less every year and eventually will go away. The thing hurting your score now is not having any open credit lines. Get at LEAST 2 major CC like a Capital One Secured CC and one other. Try to stay away from smaller cards like Orchard, Tribute, First Premier and never do pre-paid cards as 99% of these dont report. The 1% that does usually only reports once and usually only to one bureau.

 

Next I would do a large CD secured loan for say $20,000.00 and drag the payments out over at least 3 years. Take the loan check and put it in a savings account and set the loan payments for direct draft and put the extra interest in the savings as well so it is one of those sign up for it and forget about it. Granted your out 20k for three - five years depending on the length of the CD but it will build your credit and you dont have to worry about making payments.

 

Your income has no influence whatsoever on your credit score. They only reason your income would be related to your credit is for the lender to figure out what credit limit to approve you for.

 

Department store cards are another thing that helps your credit granted not alot as compared to installment loans or major CC but all combined will give you an attractive credit "profile". Which is what lenders are looking for. All lenders are different so there ideal profile may differ greatly from this. Just pay on time, wait for those derogs to fall off, open a couple CC and use them responsibly and try to keep balances below 15-30% and always carry a very small balance. Even if its only $10 on a CC with $10,000 limit. Lenders look to see that you can handle a balance and make payments to pay it off. If you always show a 0 balance (paying off CC every month) lenders will see that they arent going to make extra money (interest) so will more than likely either give you a higher CC rate or not approve you based on your score.

 

Either way you need to get some positive items on your report and keep them open and current. keep your debt to credit ratio as low as possible, and always carry a small balance, and pay on time and you should see your score increase slowly over time.

 

Do all this over a 6 - 12 month period as even though having credit improves your score it will initially bring it down because of inquiries and new credit w/ "no payment history".

 

There is no "quick fix"! Repeat this with me THERE IS NO QUICK FIX FOR CREDIT REPAIR!!!!!! It takes time. At the very lease it will take 30 days. I personally have been improving my credit over the last 6 months and I have only gotten some not all negative items removed.

 

So just be patient and keep your eyes on the prize!

 

Good Luck


Can you clarify what you mean by these statements?  If you mean carrying a balance over from month to month which results in finance charges that is never necessary.
One way to approach using credit cards responsibly and for the maximum scoring potential is only have one of your cards show a small (<9% of your credit limit) balance on your monthly statement and then always pay in full before the due date to avoid interest. If you have any other cards always have them report a zero balance on the statements.
That doesn't mean you can't use them it only means that you time your payments on these other cards so that the balances report zero each month.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work


 

New Contributor
cascade159
Posts: 72
Registered: ‎11-20-2009
0

Re: 629 credit score, 100K income - not sure what to do next

It may be possible to get the Tax Lien removed immediately - some good information from another thread:

 

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Tax-Lien-Question/td-p/701093

EQ: 680, TU 665, EX 615 (FAKO)
Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010
0

Re: 629 credit score, 100K income - not sure what to do next

NFCU reports to all three bureaus monthly, for both secured installment loan (reported as "secured loan") and for secured CC (no mention of being secured).

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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New Member
Expat28
Posts: 4
Registered: ‎09-07-2010
0

Re: 629 credit score, 100K income - not sure what to do next

Thanks for all your suggestions.  May I follow up with a couple questions or should I start a new thread?

 

  • Is the suggestion to use a credit union because it's easier to get a loan or credit card from a credit union than from a traditional bank?
  • So far I haven't found a credit union that I qualify for in Denver.  Are there national online credit unions that don't have some military or place of employment requirement that you would recommend?

Thanks again.  I am diligently searching for answers.


Starting Score (9/1/10): EQ: 629 -- EX: 594
Current Score (9/1/10): EQ: 629 -- EX: 594
Goal Score (9/1/11): EQ: 740 -- EX: 720


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Moderator Emeritus
MarineVietVet
Posts: 14,084
Registered: ‎07-14-2009
0

Re: 629 credit score, 100K income - not sure what to do next

 


Expat28 wrote:

Thanks for all your suggestions.  May I follow up with a couple questions or should I start a new thread?

 

  • Is the suggestion to use a credit union because it's easier to get a loan or credit card from a credit union than from a traditional bank?
  • So far I haven't found a credit union that I qualify for in Denver.  Are there national online credit unions that don't have some military or place of employment requirement that you would recommend?

Thanks again.  I am diligently searching for answers.


 

IME it seems like CU's are a little more forgiving of past mistakes than a national company.

 

I'll let others recommend a national CU.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work



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