Credit Score of 520's - Is there hope?

[Anonymous]

Greetings, this is my first post and I am clueless when it comes to how credit works and what me and my husband can do about ours!  You people seem very smart and would love your help.

To explain, my husband has a credit score of about 520.  He was a rebellious teenager (as some of us can relate ) before joining the Army.  I believe he has two car repo's and several collections, a total debt of about 44k.  Those were about four years ago, and for the last year or two he has tried to repair his credit, but it hasn't gone anywhere. He has about 3-4 credit cards and I don't think he's missed any payments for a long long time. So he's fine on present credit cards.  It's the old repos and medical collections that seem to be hurting?  But once again, I do not know much about these things and would love to know more.  

As for me, I'm only 20 and have no established credit. I have one credit card from First Premier Bank with a limit of 200$ just to start out with and I've had only for a few months and have always payed on time.  

We are being stationed in Fort Leonard Wood, Missouri in a few months and wanted to get a home.  As you may already know, we were denied and it's a bummer we cannot buy a home.  After finding out about his credit and how it still has not gotten better, I came to find this place.  I don't want to rent a apartment for another 3 years and wait for those things to fall of his credit, and want to find a way to help!

My questions are thus,

1.  How can my husband repair his credit?  He said he cannot afford to pay 44k in debt and wants to wait 3 years or so for them to fall off. Is this okay, and what can we do in the mean time?  

2.  What can I do for myself to build credit?  I've heard of secured credit cards but don't know much about them or how they work. Would these help establish credit?

Message Edited by Snfrailey on 01-13-2010 12:19 PM

Message Edited by Snfrailey on 01-13-2010 12:19 PM

[Anonymous]

Howdy and Welcome!

First off, you may want to check the "start here" threads so that you learn the terminology if you plan on using the FICO forums to help you monitor your progress.

I just started being proactive last week and I created a chart.  Across the top I created four columns for each of the 3 CRAs and a final "Plan of Action" column.  Along the left I listed all my baddies individually.  Then I put a check under each CRA if it was reported there and under that I wrote how the TLs were reported. 

For the accounts in collection I put "DV" for the delinquent accounts I knew were mine, I wrote "PFD" but first researched on here how to deal with OCs and CAs.  I also listed "GW" for any accounts that applied.

To date, I received a response from two baddies: one after writing a GW after requesting that the debt be removed and the second was a dispute where I contacted the CA directly and was told they would remove it.

I hope this helps.  Good luck!

One thing I've learned is that it takes diligence and patience.  Good luck!

[bigtim]

There is hope. You're still very young, so you have time to plan for house buying. If your husband is in no position to pay off his rather large back debts, it may be best for him to let sleeping dogs lie... 3 years sounds like a long time, but circumstances could change between now and then, and at least by then, if he keeps his current credit in check, his scores should be decent and you will have had time to save more money, etc. for the house - try to be patient.

As for yourself, you should have a look at a current report/score - I think you need six months history in order to have a score, so the card you have might take a month or two to update, so you may not have a score until about 8 months after you received your card. Join a credit union and loan yourself a $1000 - a SECURED loan - this will establish installment loan history for you and definitely improve your scores. After you have established a score, I would say look for a store charge card that is known to give out credit for new history - do some research on here - this should help your score over time as well. Also, if you have a relative or someone who can put you as an AU on a GOOD card with a high limit, low util, this will give you immediate points.

Good credit is established over time - keep paying your bills, etc. and within a few months you will see your score improve, and by time your husband's credit clears up, you will have a solid credit profile and enough money saved to get a nice place. Good luck.

[DI]

Yes there's hope if you're willing to put in work.  I started with a 544 EQ FICO in 2004.  My scores are excellent today.