Credit Repair Progress - 3 Months in.

[mrrichsin]

Hey guys,

A few months back I asked for some advice on rebuilding my credit, I wanted to share my progress so far with those in the same predicament:

(http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Here-is-my-full-credit-report-Need-help-rebui...) 

First, I got a $300 unsecured card from CreditOne in July. I was totally surprised, but I suppose it was due to no pulls or changes on my credit account over 6 months prior to applying. My credit was in the mid 500's then, so when I recieved it, I decided this was the time to repair my credit once and for all.

Approvals: 

Over the next 2 months I was approved for Wells Fargo Secured ($300), Capital One Secured($200) and BofA Secured($300). I also got a $240 credit line with Fingerhut and paid that off after the first statement. This should be turned into a revolving account, but have not heard from them as yet. 

Denials:

I was denied from Commenity, GE, Discover and so many more. I racked up 12 inquiries in a few days, but I didn't mind since I knew I would be gardening for quite some time after I had enough foundation to build. 

Challenges:

1 month ago I recieved 3 collections on my account all at once, it was demotivating to say the least. I had 2 from Comcast and 1 was a medical bill that was supposed to be covered by insurance. I quickly took the attack to them and the medical collection was removed after paying in full and the Comcast was admittedly their fault, so they will have them removed after the 29th. The rep at Comcast told me that it happens and they have a system in place for things like this. 

Also, I have spent the last couple months rebuilding my portfolio (I'm a web developer) as this credit rebuilding process was just a part of my personal rebuilding process. Money has been tight but I pay $50 to $100 here and there when I can, never late. I am not too concerned with having them report zero until I pay off all my collections ($2500 approx. remaining) and the few recent baddies are removed. I aiming for Febuary to have it all paid off and all credit cards at zero, with one reportin 1-9%. 

Goals:

My goal really is to have $20k in credit available to me in 1 year. This is not a huge number, but in terms of cashflow and keeping my business up and running without the typical feast and famine most freelancers go through. I would like as much as I can get, but realistically, 20k would really change my entire life, seriously.

Hindsight:

I have always been an entrepreneur and I cannot imagine how I spent the last 7 years working purely on cash. Even before then I never had more than $2k in credit cards, AND IT HAS BEEN MY BIGGEST MISTAKE. You need money to make money, especially when your confident in what your doing. You don't need much, but when you are only thinking short term in business, you lose sight, you can lose motivation, you lose you passion. Atleast this has been the case for me. I had a very successful service company in 2012 and was spending $10k a month on PPC, generating close to $40k in revenue and that was a great hit for me, unfortunately, I was running 100% on cash and it just became too much after a while that we had to close down a SUCCESSFUL company. Some people could power through, but when you realize this is going to take 5X longer to get from point A to B because you just don't have access to capital, or that its 5X more stressful because of lack of capital......it's easy to cut your long term losses. This is just my personal story of how credit couldv'e helped me in life and now that realization is tough to swallow, but with the help of this board I hope to turn things around.

Scores:

Over the last 3 months my scare has ranged from 515-610. I don't know how accurate this is, but I am not following it too much as the bottom line is, there is work to be done. 

Just a few quesitons:

1. Should I raise the limit on my secured cards?

2. Does having high utilization on cards affect your score in the long run, or is it just temporary until cards are paid off?

3. Is there anything else I can do, add new accounts or any suggestions that might help me 6 months from now if I started today?

Thanks again, best of luck to everyone, please ask away if you have questions.

[guiness56]

---

@mrrichsin wrote:

Hey guys,

A few months back I asked for some advice on rebuilding my credit, I wanted to share my progress so far with those in the same predicament:

(http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Here-is-my-full-credit-report-Need-help-rebui...) 

First, I got a $300 unsecured card from CreditOne in July. I was totally surprised, but I suppose it was due to no pulls or changes on my credit account over 6 months prior to applying. My credit was in the mid 500's then, so when I recieved it, I decided this was the time to repair my credit once and for all.

Approvals: 

Over the next 2 months I was approved for Wells Fargo Secured ($300), Capital One Secured($200) and BofA Secured($300). I also got a $240 credit line with Fingerhut and paid that off after the first statement. This should be turned into a revolving account, but have not heard from them as yet. 

Denials:

I was denied from Commenity, GE, Discover and so many more. I racked up 12 inquiries in a few days, but I didn't mind since I knew I would be gardening for quite some time after I had enough foundation to build. 

Challenges:

1 month ago I recieved 3 collections on my account all at once, it was demotivating to say the least. I had 2 from Comcast and 1 was a medical bill that was supposed to be covered by insurance. I quickly took the attack to them and the medical collection was removed after paying in full and the Comcast was admittedly their fault, so they will have them removed after the 29th. The rep at Comcast told me that it happens and they have a system in place for things like this. 

Also, I have spent the last couple months rebuilding my portfolio (I'm a web developer) as this credit rebuilding process was just a part of my personal rebuilding process. Money has been tight but I pay $50 to $100 here and there when I can, never late. I am not too concerned with having them report zero until I pay off all my collections ($2500 approx. remaining) and the few recent baddies are removed. I aiming for Febuary to have it all paid off and all credit cards at zero, with one reportin 1-9%. 

Goals:

My goal really is to have $20k in credit available to me in 1 year. This is not a huge number, but in terms of cashflow and keeping my business up and running without the typical feast and famine most freelancers go through. I would like as much as I can get, but realistically, 20k would really change my entire life, seriously.

Hindsight:

I have always been an entrepreneur and I cannot imagine how I spent the last 7 years working purely on cash. Even before then I never had more than $2k in credit cards, AND IT HAS BEEN MY BIGGEST MISTAKE. You need money to make money, especially when your confident in what your doing. You don't need much, but when you are only thinking short term in business, you lose sight, you can lose motivation, you lose you passion. Atleast this has been the case for me. I had a very successful service company in 2012 and was spending $10k a month on PPC, generating close to $40k in revenue and that was a great hit for me, unfortunately, I was running 100% on cash and it just became too much after a while that we had to close down a SUCCESSFUL company. Some people could power through, but when you realize this is going to take 5X longer to get from point A to B because you just don't have access to capital, or that its 5X more stressful because of lack of capital......it's easy to cut your long term losses. This is just my personal story of how credit couldv'e helped me in life and now that realization is tough to swallow, but with the help of this board I hope to turn things around.

Scores:

Over the last 3 months my scare has ranged from 515-610. I don't know how accurate this is, but I am not following it too much as the bottom line is, there is work to be done. 

Just a few quesitons:

1. Should I raise the limit on my secured cards? They alone are not scored.  If you tend to carry balances it will raise your overal CL.

2. Does having high utilization on cards affect your score in the long run, or is it just temporary until cards are paid off?  Only temporary.  When you bring the balance down your utilization will also drop and your score will go up.

3. Is there anything else I can do, add new accounts or any suggestions that might help me 6 months from now if I started today?  Don't let all of your cards either report a 0 balance or all balances.  Have all but one report 0 and the other at 9% or below.

Thanks again, best of luck to everyone, please ask away if you have questions.

---

[SunriseEarth]

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@mrrichsin wrote:

Just a few quesitons:

1. Should I raise the limit on my secured cards?

2. Does having high utilization on cards affect your score in the long run, or is it just temporary until cards are paid off?

3. Is there anything else I can do, add new accounts or any suggestions that might help me 6 months from now if I started today?

Thanks again, best of luck to everyone, please ask away if you have questions.

---

1.  If you don't mind having that money tied up, it could help with UTIL to increase CLs on the secured cards.
2.  FICO scores don't have a memory.  They are a snapshot of your credit at a given moment.   So, the simple answer is "no," in that you can correct UTIL.  However, keep in mind that higher UTIL means more interest accumulating and that could make it take longer to pay down.

3.  I would not add any new TLs at this time.   You'd be hurt by dropping your AAoA and the new account ding.   As it is, you need to let those INQs age for at least 6 months, so they can quit dragging the score down.  The collections being removed will definitely help.  So I think the best thing to do is keep over UTIL under control, maintain a positive payment history, and let your accounts age for a bit.