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Hello all, this is my first post on these forums. I have been browsing for a few days and see that this forum has some very knowledgeable contributors. Any help that you guys can give would be greatly appreciated.
I am about to start a rebuild of my credit after a long negative history. I recently got the MyFico Scorewatch which gave me my credit score (572) and my report. My report shows 7 years history, with 8 accounts (2 with balances), 1 inquiry, 1 collection, and 1 public record.
The 8 accounts are all student loans that are being taken care of. I have finished a rehab program for those and am in the process of getting a IBR plan which should be in place in the next 2 weeks. The first question I have is, how soon should I hope to get those removed from my credit report once I begin the IBR program? I will speak with my new loan servicer about this, but I wanted to have a general idea first.
The second question involves getting secured credit cards to begin the rebuild process. Should I wait until I have completely paid off the open collection and the public record before I obtain the secured card? It will take me 6-8 months at least to pay those off completely. My original plan was to get a secured card and then use that to pay off two negative accounts. But does it make sense to do that? I know there are negative issues with carrying a balance and things of that nature.
The final question is just a general one. Assuming that I do everything that I am supposed to (pay off the accounts, maintain secured card responsibly, upgrade to unsecured card when I get a chance, etc.), what is a reasonable timeframe for my obtaining a good credit score (say 700)?
Thanks in advance for any and all responses.
Hello and welcome to the forums. First, I really can't tell you a lot about the student loans part. It could take just a bit for everything to show up. As far as the secured cards, you can get them and start building good tradelines now while continuing to clean on your reports. What about the collection and the judgement? Are they paid? There are some things you could try to clean those up, let us know where you stand. As far as the 700 goes, it depends on what you can clear up and what you can add to your CR. It's quite possible in a reasonable time frame. Good Luck
The Department of Education will immediately report your defaulted loans as current/never late as soon as they are picked up by a new servicer. The best part about it is that they report it as never late, but from the date that you opened them. Depending on how long ago it was that you got the loans, this could really help your AAOA. You would be surprised at how fast your score will increase with a couple secured cards and rehabbed student loans -- I was. Just hang in there and be patient. Keep your cc util nice and low <10%. You have already taken the biggest step. Congrats.
Thanks for the replies Shogun and Swapmeet.
Shogun- The collection and the judgement are in the process of being paid, but it will still take some time. Probably 6-8 months.
Swapmeet- I spoke to the new servicer today and they basically said what you said. They automatically report at the end of each month. So i'm hoping that all 8 of theopen accounts will be showed as current by the end of december. Hooray for fresh starts!
So, hopefully all of this means that I am on the right track. I'm going to apply for a secured credit card later this week. Would it make sense to have 2 cards with different banks? I know that having more accounts can help your score, but does that matter with secured cards?
2 cards would be good, doesn't matter if they're from different banks or not.
+1