Advice on what steps to take

[marquezj21]

Ive been trying to rebuild credit for quite sometime, and I am not having much luck.

The backgroung: Between 2007-2009, my wife and i fell into rough times and have had a hardtime recovering.

We are finally getting back on our feet, and I have just received a promotion. With my new icome and my wifes income, we are looking at an annual income of around 160k.

My current credit scores are TU 580, EQ 553 ( my wifes are a different story, were talking 400s!, so we decided to work on mine first)

I have opened a few rebuilder CCs with capital one that I have had for about 18 months, and while they carry a balance now, I plan to pay off all 4 of my CCs and my 2 store cards next month. I have a small credit bulder loan with my credit union that I am making payments on with a balance of $1200. I also have 2 open car loans, no other open accounts.

The baddies showing up are as follows:

Collections

 2 hospital from 2009 with balance of $480

1 cable bill from 07 for 600

1 phone bill for 736

I have negative flags on the following:

Lacks Furniture, opened in 07 paid/closed in 11, but with 11 30 days late!

Lack funriture opened in 07 with 3 30's, closed in 2009

Toyota financial- showing payment after collection for an amount of $536, on an otherwise perfect history-- I have disputed this, I have no idea what this is.

First Premeir 1 30 day late, 1 60 days late from 07, account closed in 08.

I have sat down and developed a plan to get out of debt by July. I can completely pay off my 2 cars and credit cards and loans, while having enough to live on and plenty in savings.

What can I do/ what should I do about the collection accounts?

Do i pay them? We want to buy a house in the next two years... I just want to get my scores up.

What is the best way to do this. Is it smart to pay off everything so quickly, or should i just let the loans ride to the end of their term?

Any advice on steps to take to improve my credit rating would be greatly appreciated.

Thanks,

JM

[marquezj21]

Anyone?

[guiness56]

For the late payments the only thing you can do is send out some GW letters asking for them or some ot them to be removed.   If the GWs don't work know that late payments come off 7 years from each occurence.  When the last one comes off your account will become positive again and remain for up to 10 years from the date closed.

Send all of the CA accounts a DV letter.  If they validate, send a PFD.

Utilization is the fastest way to bump your score.  Have all but one of your cards report a 0 balance and the other at 9% or below.  YMMV on this so experiment.  Some have their best score at 4% others at 8%.  You can tinker around with utilization.  FICO has no memory when that is concerned and you are scored for what is reporting on any given day.  You will need to know when your CCC reports to the CRAs in order to pay it down before it reports.  Once it reports you can pay off the balance so you incur no interest fees.

Installment loans, such as auto and credit builder loans, play a very small role in your score unless of course you are late.  Then the damage is just like any other revolving account.