Advice/Help on Repairing Credit

[Anonymous]

I am seeking some good advice on repairing my credit & steps of action that would be best for me to immediately start taking.

Negative History-

Filed a joint Ch 13 BK in Sept 2011 while married & after the BK was filed my ex asked for a divorce so I voluntarily dismissed my BK & it is reflected as dismissed in Oct 2011

It wiped my credit out & the only thing still being reported prior to 2011 is a paid off auto loan with Wells Fargo in 2009

After my divorce I needed a car quick & b/c of the BK & no positive credit my only finance option was with Credit Acceptance. My APR was 17% for 48 mo & I put $1500 down. That auto loan is showing to 30 day late payments back in September & October of 2013 due to me splitting my payments in two that month (the best I could do due to un foreseen expenses that came up)

My last credit report pulled in July 2014 shows 3 medical collections totaling $1200, also a casualty of my divorce when I still was on my ex insurance & the following month it ended was when the medical charges were billed, therefor showing no insurance at the time.

I currently have a combined 13 hard inquiries showing from shopping for a car back in October 2012, Jan 2014, & now July 2014. Although, I only submitted apps to one bank in Jan 2014 and one app in July 2014. I have been told that any inquiries only count as 1 within a 30 day period when shopping for auto loans. All of these were done only 1 time in 1 day, but they are showing different dates on my credit report.

The only positive trade line have is a unsecured loan for $760 taken out in April 2014 which I have been making on time payments for.

My total debt as of today totals $5752 which includes $5071 on my current auto loan which will be paid off in October of 2015 (a little over a year) & the unsecured loan with a balance of $681 ($39 of my $55 payment goes toward principal)

I have no credit cards & I have no other bills other than cell phone & car insurance

My current CS are EX 568 EQ 568 TU 548

My annual income is base salary $30,000 plus commission. My commission ranges from $1000-$5000/mo & I am currently working on saving for down payments.

My goals are to be able to purchase a new or used auto 6 months from now & keep my payments the same ($358) with a desired or better APR of 8-12% and finance no more than $20,000.

Also my goal is to be able to purchase a home at the end of 2015 or beginning of 2016 (or sooner if my credit is good for it)

My CS goal is to be in the mid to high 700's within 1year esp before purchasing a home.

I am seeking advice on the steps I can start doing now to help make these goals possible.

I have thought about using a credit repair service but it would cost me $600/per credit reporting agency & I feel this is something I could do on my own

Thanks!

[spike69]

Welcome to the forums! The advice her is stellar.

My thoughts (and I am still a relative newbie). Run Credit Reports using freecreditreport.com for all three CRAs if you have not already. 

For the medical debts- if I read this correctly, you had insurance at the time of services. The fact that they billed after your insurance was cancelled is irrelivent. The coverage is based on when you were seen, not when you were billed. Hit the insurance company up to correct this issue. If the coverage was not in place, you ahve the option to negotiate a lower settlement with the original creditor and perhaps ask them to delete the coolection if you pay as agreed. If you do this get it in writting. 

For the lates you can try to send CA good will letters asking them to delete the lates. Otherwise, the 30 day lates only really "hurt" you for two years. 

You have the car loan and personal loans but no CCs. You will need 2-3 CCs (try 2 bank and 1 retail that you would use and pay regularly) reporting to really build up positive tradelines. You may have to go with secured cards while you scores are in the 500s. Try Capital One (they pull all three reports so that is not great), SDFCU, Bank of Amenrica or Wells Fargo. Also, if you have a relationship with a Credit Union try getting a secured or unsecured CC with them- often times they are more open to working with people they have had a relationship with and they tend to grow more quickly.

I have no info regarding how the BK is affecting you as I have no first hand knowlege.

Lastly, there is very littile to no value in having the "credit fixers" do this for you. It is very costly and they are not doing anything you cannot do for yourself for free. Just keep reading and posting here and you will be amazed at what you can accomplish!

[Anonymous]

Thanks for the great advice!!!

I have never had a credit card & not sure how to best utilize them in building/repairing credit can you explain to me the best way to use these to build my credit up in the shortest amount of time.

Thanks!

[spike69]

You want to use the cards (otherwise the credit grantors will not build a relationship with you) but be able to pay the accounts in full and carry no more than a 10% balance. Carry a 10% balance can be the tricky part. The creditors may not "report out" on your balance on the same date they cut their statements or that you pay your bill. I have fallen victim to this showing a large balance that I had charged but paid in full before the bill was due. This just requires watching how your creditor reports over a period of a few months. I think you can also call and ask but i got a pretty wishy washy answer when I did this. 

If you are not 100% comfortable with credit use you can pick a few small monthly charges that you know you can pay in full when the bill comes to run through your card (I do this with my netflix and credit monitoring monthly billing)