This is a how to guide for those of you who may a lot of debt that is affecting your score and have been denied a personal loan due to that reason.
Here's some info about me.
AAOA - 1.1. YEAR
OLDEST ACCOUNT - 2 YRS 1 MONTH
REVOLVING ACCOUNTS - 7
NO BAD MARKS AT ALL
FICO AT THAT TIME - 620
**SIMULATOR SAYS IF I PAY ALL DEBT DOWN TO 1% I WOULD HAVE A FICO OF 722+.****
Long story short, I racked up about 3k of debt on my credit cards and store cards... at least 3 cards were maxed out an my attempt to gradually pay them down every month failed. I was paying over $400 every month and saw no end to it. I figured a debt consolidation loan would be very beneficial to me but could not get approved by a descent lender; i.e. Wells Fargo, and other places I dont remember.
I didnt want to keep applying everywhere and add too many inquiries to my report so I got a loan at One main Financial. Literally the worst place you could go to. I got a 3k loan at 29.99% APR for 48 months. monthly payments a little over $100
Now, heres how I fixed myself up. I accepted the loan. I would be paying 6,000+ at the end of my term. Once I got the loan, I paid off all credit cards.. Fico went up over 100 points and I refinanced that high interest loan through my credit union.
New loan - 3k @ 10% interest for 3 years. Payments are even less!
I now have a FICO 720+ and have a cheap monthly payment for my personal/debt consolidation loan.
One main financial isnt a scamming company.. they prey on those with bad credit.. and charge you ridiculous interest rates. They couldnt do a thing when i gave them their money in full and saved myself about 2k off my term
hope this helped someone!!!
Very interesting. I wonder if this is an option for someone looking to buy a house in the next 6 months. I know introducing new accounts to your credit report isn't good, would love some insight on this.
Thanks,
Starting Scores (10/18/2013): EX: 603 | EQ: 572 | TU: 659
@guykara wrote:Very interesting. I wonder if this is an option for someone looking to buy a house in the next 6 months. I know introducing new accounts to your credit report isn't good, would love some insight on this.
Thanks,
I'd be glad to lend some advice in anyway I can. Let me know as much of this info below and I'll see what the best course of action is before applying for that mortgage.
AAOA -
OLDEST ACCOUNT -
# OF REVOLVING ACCOUNTS -
# OF INQUIRIES IN LAST 12 MONTHS
PAST OR CURRENT LOANS -
ANY BAD MARKS ON YOUR REPORTS -
ANNUAL INCOME -
ESTIMATED MORTGAGE AMOUNT -
CURRENT FICO SCORES -
MOST IMPORTANTLY *** CURRENT TOTAL DEBT/CREDIT RATIO***
AAOA - ~2.5 years
OLDEST ACCOUNT - ~6.5 years
# OF REVOLVING ACCOUNTS - 3
# OF INQUIRIES IN LAST 12 MONTHS - ~6 - 5 of them are to fall off by October of this year
PAST OR CURRENT LOANS - 1 current car loan, no lates, opened 2011, 11k/22k, another car loan, closed, never late, opened 2011/, 0/8350
ANY BAD MARKS ON YOUR REPORTS - yes, 2 charge offs from 2008, 2 collections accounts that are pending deletion (received confirmation on one, the other is with the BBB, have high hopes for this one based on others in similar situations) and a judgement showing as pending but was paid back in 2009, have an attorney on getting this updated correctly
ANNUAL INCOME - $58k w2, ~$15k 1099
ESTIMATED MORTGAGE AMOUNT - $245k
CURRENT FICO SCORES - see sig, had a collection deleted since then, so I'm expecting they're a bit higher at this point.
MOST IMPORTANTLY *** CURRENT TOTAL DEBT/CREDIT RATIO*** - about 25%
My main concern would be adding a new account like this so close before applying for a mortgage. I could definitley use the credit boost, though.
@guykara wrote:AAOA - ~2.5 years
OLDEST ACCOUNT - ~6.5 years
# OF REVOLVING ACCOUNTS - 3
# OF INQUIRIES IN LAST 12 MONTHS - ~6 - 5 of them are to fall off by October of this year
PAST OR CURRENT LOANS - 1 current car loan, no lates, opened 2011, 11k/22k, another car loan, closed, never late, opened 2011/, 0/8350
ANY BAD MARKS ON YOUR REPORTS - yes, 2 charge offs from 2008, 2 collections accounts that are pending deletion (received confirmation on one, the other is with the BBB, have high hopes for this one based on others in similar situations) and a judgement showing as pending but was paid back in 2009, have an attorney on getting this updated correctly
ANNUAL INCOME - $58k w2, ~$15k 1099
ESTIMATED MORTGAGE AMOUNT - $245k
CURRENT FICO SCORES - see sig, had a collection deleted since then, so I'm expecting they're a bit higher at this point.
MOST IMPORTANTLY *** CURRENT TOTAL DEBT/CREDIT RATIO*** - about 25%
My main concern would be adding a new account like this so close before applying for a mortgage. I could definitley use the credit boost, though.
If those got deleted your score would be 760+.
What's your current goal? Is it paying down your debt? If so, how much debt is it?
Hah. I could only wish it to be that. I called my mortgage broker and he.thought doing what you suggested in the original post would be smart, especially if my monthly payment is similair. Which it is. The only way I wouldnt do it is if they required me to close my card. Im going to wait a few weeks and then apply for the loan.
In other newa, capital one executive office called me and a nice guy said he's received my email to the CEO and he's going to see what he can do and get back to me within a week. This is the most success I've ever gotten from them. Wish me luck!
In other newa, capital one executive office called me and a nice guy said he's received my email to the CEO and he's going to see what he can do and get back to me within a week. This is the most success I've ever gotten from them. Wish me luck!
@guykara wrote:
Hah. I could only wish it to be that. I called my mortgage broker and he.thought doing what you suggested in the original post would be smart, especially if my monthly payment is similair. Which it is. The only way I wouldnt do it is if they required me to close my card. Im going to wait a few weeks and then apply for the loan.
In other newa, capital one executive office called me and a nice guy said he's received my email to the CEO and he's going to see what he can do and get back to me within a week. This is the most success I've ever gotten from them. Wish me luck!
What I would do is use Lending Tree. It does a SOFT PULL and finds lenders that are likely to approve you based on the information it pulls. It can find multiple offers so you can compare them. The best thing is that its a soft pull..so you dont have to worry about the inquiry until you actually select a loan and apply with the lender.
To look at the bright side of things. If you find a deal.. evenm if it has high interest then I would just take it (if you have fully thought it through) and pay off all debt. Then once bureaus update your score and balances you can find a company to refinance ASAP. (I highly recommend credit unions)
If you don't have score watch from my fico. I highly recommend you to get it. It will give you a simulation of what your score will be if you were to pay down the balances and suggests the best course of action for you. You can use it and cancel at the end of the month. I think theres a promotion, less than $10 for the first month.
Thanks for the info. Yup I use score watch. I'll check out lending tree!