Hi all, first post here. I read through the guidelines and am still looking through credit scoring 101, and various other docs, but wanted to list my situation specifically and see what advice might crop up alongside the generic advice I'm finding on the website.
I purchased my first house in 1999. At that point I was fairly young (23), had some fairly low credit card balances (~$2k maybe), car payments, etc. Probably typical debts for someone just starting on their own out of college. As fate would have it, I lost my job shortly after I purchased the house. My income went from around ~40k a year down to 20k (unemployment and part time work only for nearly 2 years.)
I made ends meet by using my credit cards where I could and cutting expenses. In retrospect, of course, I don't think I ever would have purchased a house at all until my credit card debts were paid and probably my car was paid in full. I'm guessing my story isn't unfamiliar on a forum such as this.
So, eventually I get a new job and have been gainfully employed ever since 2002. In fact, I've been fortunate enough to raise my salary from that 40k previous position to nearly 6 figures in about 5 years. Unfortunately, in the time that I was unemployed, I hit the max on my credit balances and could no longer afford to pay them. I was able to afford minimum payments, but the credit companies (both of them) jacked my interest rate from ~12% up to 25% when I was late on payments during my unemployment. I literally called them both and said "I'm not (and can't) paying you anything anymore, you're taking advantage of me when I have no job."
Both credit card companies moved that debt to collections agencies, and I basically held those companies off until I was able to get employed again and save up enough to pay them off in full.
At this point in my life I still have my original house that I purchased, and that is the only debt I have. My vehicle is paid off, I paid off the collection debts, I paid off my student loans, and I have no credit cards debt (or credit cards at all for that matter.)
Since that time I was married (my wife has no credit history, as her parents paid for everything in her life with cash before now) and we're looking to move closer to our places of employment. We're renting a place in our current city and renting out the aforementioned house. I fear we will end up with a horrible interest rate if we purchase a house now, assuming we could even get a loan (my equifax score is only a 604 currently, it appears.)
Our combined salaries are approximately ~150k a year and we have no debt. However, obviously my credit score has suffered from these previous setbacks. The only other thing that likely affected my credit score was occasional late payments on my mortgage. Citifinancial Mortgage didn't allow you to pay a bill online or automatically until literally a few months ago, so I was stuck calling in via telephone to pay. Occasionally I might be a day or two late if it was a weekend and I didn't get to call until the following week, etc.
My next question should be obvious.. how do I go about improving my/our credit score? From my perspective I've always repaid money I've borrowed or have owed, but obviously when I lost my job I couldn't do it in the manner I wish I could have. We're purposely living way under our means now so if one of us lose our jobs we can still easily pay all of our bills, and refuse to take on any debt that's not completely necessary (car or mortgage are all we consider acceptable debt.)
Are there ways to make these collections "look" better or to raise my/our credit score even with these on the report for the next ~5 years? Any other thoughts or clarifying questions? Thank you for reading, any responses are appreciated.
