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Best Order for Rebuilding Score and Overall Picture

Best Order for Rebuilding Score and Overall Picture

Story --> 5 Defaulted student loans, 7 student loans in forbearance, 2 CO's, and 2 CA's.  No revolving CC's.

 

What is the best order of approach?  

 

Start with the CO's and CA's, then by that time forbearance will be up and pay on student loans, then save and rehab defaults, then add a secured CC or 2?

 

 

Message 1 of 5
4 REPLIES
Valued Contributor

Re: Best Order for Rebuilding Score and Overall Picture

I'm not sure how to handle the student loans and I'll let someone else weigh in on that. But for the CO's, depending how hold they are, you should try and pay them. They are affecting your utilization which is kicking your score in the nuts. You can try a PFD for those but don't expect much.

 

For the CA's, see if they will PFD. Tell us who they are and we can tell you whether or not they will PFD or at least get you some inside contact info.

 

Then, get a couple (or 3, depending on your comfort level) of secured cards. Never let anymore then 9% of your total revolving balance report to the CRA's at any one time from one card.

 

 

Scores: about 700 across the board
Total CL: $275k
Message 2 of 5
Highlighted

Re: Best Order for Rebuilding Score and Overall Picture

Thank you for the reply madmann, I have followed your rebuilding thread veerry veerry cllosseely.  

 

"They are affecting your utilization which is kicking your score in the nuts... You can try a PFD for those." -- I literally (not figuritively) laughed out loud.  The CO's are with Cap1 and First Premier.  I have seen both are difficult to work with.  Cap1 told me on the phone "Nope", but some people have gotten it into the right hands correct?

 

"For the CA's, see if they will PFD. Tell us who they are and we can tell you whether or not they will PFD or at least get you some inside contact info." -- A local medical CA that is old so I think... I will be able to PFD that one.  The other CA is for a CO (balance not $0) for HSBC Best Buy.  The CA is Stellar Recovery Inc.  RobertEG, in another thread, suggested I PFD the CA because Best Buy has received a tax written off and they would have no incentive on PFDing.

 

"Then, get a couple (or 3, depending on your comfort level) of secured cards. Never let anymore then 9% of your total revolving balance report to the CRA's at any one time from one card."  -- Once I pay my CO and CA debt, get on a budget for the current student loans, and payed my 10 months of rehab on defaulted student loans, I will get a thousand secured CC's if that is what it takes lol.  And yes, %7 - %9 util on each revolving account, and total revolving util must also be %7 - %9 correct?

 

Thank you madmann for your help.

 

Message 3 of 5
Established Contributor

Re: Best Order for Rebuilding Score and Overall Picture

With student loans I would not consolidate because if you consolidate then it will pay off the old lender and a new lender will show up on your credit report and that will mess up the credit length which would drop your score.  Most lenders will tell you to do a 6 month payment, and that will take the loans off of default.  Or option 2 use tax refund to pay a lump sum to take Student loans off default.  I don't know what the percentage it is but I am assuming it is at least 8-10% of the loan amount.  I had my loans default , and the U.S dept of Ed took my tax refund of $4500 back in 2007.  I was pissed, but at the same time it was a blessing in disguise because it took me out of default and put me in forbearance,  I ended up going back to school to finish my degree.  With the 7 in forebearance try to ask for an  ICR, which is an Income Contingent Repayment.   Good Luck


Starting Score: 565
Current Experian Score: 634 (Lender pull)
Current Equifax Score: previous 668, 680 as of 11/12/13 lender pull
Current Transunion Score: previous 675,677 as of 09/23/13
Goal Score: 750

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Message 4 of 5

Re: Best Order for Rebuilding Score and Overall Picture

"With student loans I would not consolidate because if you consolidate then it will pay off the old lender and a new lender will show up..." -- I would rehab not consilidate the defaulted loans correct?  And, yes I see it will take sometime but the rehabbed loans will be sold to another lender thus messing up my length, I did not even think about this.  

 

"I had my loans default , and the U.S dept of Ed took my tax refund of $4500 back in 2007."  --  I will be very suprised if they do not take my refund this year, they did not take it last year, I do not know why...  

 

" I was pissed, but at the same time it was a blessing in disguise because it took me out of default and put me in forbearance,  I ended up going back to school to finish my degree." -- I owe ~$10,000 in defaults, I actually want them to take my refund and hopefully put my in forbearance with them.  I received my degree a couple years ago and will start a job Monday that will finally be using the degree I received Smiley Happy

 

"With the 7 in forebearance try to ask for an  ICR, which is an Income Contingent Repayment." -- Yes, I will be doing this once I get out of my family members house, and am able to create a budget to present them, e.g. bills, rent, ...

 

"Good Luck"  --  Thank you jadeite!!!

Message 5 of 5