Credit Destroyed Earlier this year... help?

[ACAT]

Hello all,

I am 22 years old.  At the beginning of 2011 I did not have much established credit history aside from student loans.  I began with a CAP1 secured card in March and was approved for a Discover card in April.  After gardening with those cards and keeping the balances paid and low I was approved for an auto loan in August 2011 with a good interest rate.  Along with these accounts I have 3 Student loan accounts.

In February of 2012 I experienced an extreme medical circumstance which let to my current credit disaster.  Without getting into all of the details the events events of that month led to the following negative information becoming a part of my credit report:

Negative Accounts

Show All Account Details  

Accounts that contain a negative account status. Accounts not paid as agreed generally remain on your credit file for 7 years from the date the account first became past due leading to the current not paid status. Late Payment History generally remains on your credit file for 7 years from the date of the late payment.

Open Accounts

Account Name	Account Number	Date Opened	Balance	Date Reported	Past Due	Status	Credit Limit
CAPITAL ONE BANK USA   Show Details	XXXXXXXXXXX	03/18/2011	$585	11/15/2012		PAYS AS AGREED	$351

Closed Accounts

Account Name	Account Number	Date Opened	Balance	Date Reported	Past Due	Status	Credit Limit
DISCOVER FINANCIAL S   Show Details	XXXXX XXXXXX	04/15/2011	$0	11/27/2012		PAYS AS AGREED	$500
SCOTT CREDIT UNION   Show Details	XXXXXXXXXXXX	07/14/2008	$2,548	11/30/2012	$2,548	CHARGE-OFF	$500

The Discover card was closed by Discover and as you can see is now paid off.  A 30 day late payment and a 60 day late payment exists on this account's history from March and April of 2012.  I plan to settle the SCU account next month for less than what the balance currently shows.

The one open Capital One (Secured) account actually now is paid off and has a zero balance, it just has not been reported yet.  I do not currently have this card as CAP1 placed a hold on the account after the negative activity began.  I have recieved mixed answeres as to whether or not the hold will be lifted and I will be issued a new card.  I just got off the phone with an account rep about an hour ago and he garunteed me that once my last payment clears through my bank that they will indeed issue me a replacement card and lift the hold off of the account.

Here is a summary of all of my accounts on my Equifax CR:

Accounts

Lenders usually take a positive view of individuals with a range of credit accounts - car loan, credit cards, mortgage, etc. - that have a record of timely payments. However, a high debt to credit ratio on certain types of revolving (credit card) accounts and installment loans will typically have a negative impact.

Open Accounts	Total Number	Balance	Available	Credit Limit	Debt to Credit Ratio	Monthly Payment Amount	Accounts with a Balance
Mortgage	0	$0	N/A	N/A	N/A	$0	0
Installment	4	$10,420	$2,332	$12,752	82%	$279	4
Revolving	1	$585	N/A	$351	167%	$20	1
Other	0	$0	N/A	N/A	N/A	$0	0
Total	5	$11,005	$2,098	$13,103	84%	$299	5

As I previosly stated, the revolving balance should soon adjust to zero at which point I expect my credit ratio for revolving accounts to reflect this.  Also, there are no negative indicators on ANY of my installment accounts including my car loan which is about one year old.

Here is some information regarding my AAoA:

Account Age

Usually, it is a good idea to keep your oldest credit account open, as a high average account age generally demonstrates stability to lenders. Also, especially if you have been managing credit for a short time, opening many new accounts will lower your average account age and may have a negative impact.

Length of Credit History 4 Years, 5 Months Average Account Age 2 Years, 4 Months Oldest Account SCOTT CREDIT UNION  (Opened 07/14/2008) Most Recent Account DEPT OF ED/NELNET  (Opened 02/22/2012)

So my issue is and what I am desperatly seeking advice for is how exactly I should go about trying to improve my credit report and score.  I last pulled my FICO score from this website a few months ago before the DISC card was payed off and it was an abysmal 485-520 TU score.   If anyone has any advice on how I may go about repairing my CRs I would be forever grateful.  Is is truly amazing how little it takes to ruin good credit, and I don't expect an easy way out.

Another question:  If I am given a replacement CAP1 secured, should I depost more $$$ to incresae the limit.  Should I try applying for another secured card from another company?

[fishbjc]

I understand medical issues, we had one of our own.  The MOST important thing NOW is that your health has been improved.  You're only 22 and now is the perfect time to get things under control. 

I would begin by sending goodwill letters to see if the baddies will get removed.  I am *guessing* that Cap One will re-open for you.  They did for me.

Is it possible for you to find a way into Navy Federal Credit Union?

[ACAT]

Fish,

Not sure about NFCU, as I have no military ties.  Good news though! CAP1 did restore my account and is mailing me a new card!  Thank goodness!

[fishbjc]

That's great news!  Begin by goodwilling Cap One....beg plead cry...whatever you have to do, work on those baddies. 

Start asking around about family members being in the military.  If they're members, they may be willing to back your membership.

[Jutz]

This really isn't that bad.  I think your credit scores were depressed because of the balances at the time.  You can fix this to look not so ugly within 6 months.

1) Cap One - You already fixed this one!  Is there any negative payment history, like 30+ days late?  If not, I would just increase the secured balance to at least 600, this way the high balance doesn't show as higher than the credit limit.  This would matter only in manual review, so it's kind of nitpicky, but it will look better.

2) Discover - Only negative thing about this is the late payment history.  Try to GW these off, make sure to explain the medical situation.  Life happens.

3) SCU - This is the only one I can see affecting you for more than a couple years.  What happened here, it shows a credit limit of $500, but the balance at $2,500?.  This is surely killing your scores, because it's still affecting your utilization if I had to guess.  If you can somehow negotiate them deleting the line, then even better, but if not, as long as it's reporting a $0 balance you can move on.  You can always GW them after the fact.

Revolving

1

$585

N/A

$351

167%

$20

1

This table is the most important.  With 167% utilization reporting it is supressing your score a TON.  Get that down to 0-10%, which it looks like you already solved part of it with the Cap1 card, and your scores will rebound.

Ignore the part about the installment accounts with high debt:credit.  These don't factor into your utilization, nor your score.

[webhopper]

2) Discover - Only negative thing about this is the late payment history.  Try to GW these off, make sure to explain the medical situation.  Life happens.

I agree with GW to Discover...  They may do this for you if this was the only time this account has been late...  Definately call, write, email etc. to ask for GW adjustment.

I also agree with negotiating a PFD with Scott CU...  they may be receptive to this....

[ACAT]

(bump)

I searched to forums to no avail... has anyone had any GW luck with Discover?

[Shogun]

Were there only 30 and 60 day lates with discover?  If so, those are only minor derogs and will diminish quickly.  After a year they lose a lot of sting, and just about no impact after 2 years.

[fishbjc]

Work on that Scott.  I think you'll be in a lot better shape come Spring if that's taken care of.