In February I financed a car at 13.9%. My Experian FICO is currently 593. I would like to repair my credit so I can refinance the car at a lower rate, but I'm unsure of the best place to start this process.
My accounts on my CR are:
I have 2 First Premier Bank charge offs - $466 and $482 - Date of last activity both 10/2009
Jefferson Capital LLC - $320 - date of last activity 2/2007
--- These three are are reporting as 120-days past due, making my credit utilization 161%.
Also a collection account for $433, Date of last activity 8/2007
One other collection of $173 fthat doesn't have all the details but I believe was charged off late 2009.
I do not have any open credit cards. My only account is my car payment which I have made on time since february.
I have heard First Premier doesn't do PFD but I sent them the letters anyways. Assuming rejection, how much will accepting an offer from them and closing those debts help my score? Am I better off paying the other two accoutns which do not affect my utilization first?
In your situation, I would suggest putting % util out of the picture, at least temporarily. Any current impact of high util will disappear once util is lowered.
FICO scores only on current util, not prior history.
The major derogs are having significant impact that you cannot control on your own by reducing util.
You can either wait for them to be excluded due to their own aging at 7 yrs + 180 days from DOFD, or attempt earlier deletion by use of pay for delete offers.
Also lingering is the potential for those derogs to become worse. Charge-offs are often sold to debt collectors, which will result in an additional collection being reported.
And if the debt is still within SOL on any account, you face the potential of legal action for its recovery, with the addition of a judgment to your CR.
What is the DOFD on the respective OC accounts for each charge-off and collection? That is your starting point for evaluating future actions.
Thank you RobertEG. I got my credit report and FICO score from this site (myFICO) and unfortunately the information in the report is a bit limited. The report only gave me the "date of last activity" (as listed above). It is very close to my DOFD on each of those accounts. I'm guessing those are the dates they originally charged off my accounts, so the delinquincy should start a couple months before that?
I sent PFD letters to First Premier and Jefferson. I read here that First Premier doesn't delete. Will it impact my score positively if I pay the accounts off? From the best I can understand, it would improve my utilization but I'd still have a chargeoff.
If paying would significantly increase my score I would do it. Otherwise I see no sense in spending the money compared to just waiting them off.