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Decisions

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Anonymous
Not applicable

Decisions

New to forum and think this is a great way to help each other.  Looking for some feedback from experienced folks on decisions - currently rebuilding after a rough stretch in 08-09. Looking for fastest and most effective impact.

 

1. Ford Credit auto account

  • Current balance - ~$8K (excellent loan terms - vehicle is worth roughly 2X balance and looking to sell it now)
  • Vechile was repossessed in Dec 09 for a 60 day late - redeemed a week later and account has been in good standing since
  • Although account is current and in good standing, account shows as past due on credit reports (suspect this is dragging score down - shows as negative)
  • Option -- pay off ($8K) the account and close it (this will remove past due status and potentially bump score)

2. Revolving accounts

  • Disco - $1400 bal / $4300 limit [39%] (open, good standing, use peridoically)
  • Capital One - $475 bal / $1500 limit [31%] (open, good standing, use periodically)
  • Dell - $0 bal / $600 limit [0%] (open, good standing, just paid down to $0)
  • Lowes - $0 bal / $176 limit [0%] (open, good standing)
  • VC Furniture Line - $0 bal / $1500 limit [0%] (open, good standing)
  • BOA Visa - $1612 bal / $2000 limit [80%] (closed but balance and limit reporting - great terms)
  • BOA SME VISA - $6610 bal / $8400 limit [78%] (closed but balance and limit reporting - great terms)
  • BOA MC - $10448 bal / $12300 limit [85%] (closed but balance and limit reporting - great terms)
  • Citi MC - $4138 bal / $4800 limit [86%] (closed but balance and limit reporting - poor terms)
  • Chase Visa - $742 bal / $2200 limit [33%] (closed but balance and limit reporting - great terms)

Total revolving - $23,729 bal / $37,776 limit [68%]

 

These are the biggest areas I feel are dragging score down - I have a few old medical collections (50$, 12$, 130$) that I am still disputing, but the revolving and the auto account are the big hitters.  All of my other accounts are in good standing (mortgage, another auto, student loan., etc).   

 

I am debating whether to pay off the auto account and try to put it behind me (remove past due status?), or continue chopping away at the revolving debt.  Which path will yield the best short term results in terms of scores?

 

All feedback is much appreciated!

 

 

Message 1 of 4
3 REPLIES 3
3elizabeth
New Contributor

Re: Decisions

I am not an expert at all, but will offer my opinion.  By your post it looks like you have a win-win situation---sell the car which will eliminate your 8K debt and give you 8K to pay off some debt (based upon your calculations).  If you can get by without this vehicle, I would do this and zero out as many of the CC balances as I could, provided you have 1-2K cushion to fall back on so you don't have to use the cards anytime soon.    In my case, every time I paid a card off, the balance chased downward, so my utility stayed stable, which didn't help my score.   Put a $10 charge on one of your open cards so you have one reporting with a balance every month.   When you have done as much as you can for the small balances (about $4200), throw money (about $3800) at the larger ones to get them first down to 70% or more across the board.  Your problem is that your accounts with big balances are closed, so you have a high utility with them.   Keep paying these off aggressively.  

 

On the medical---if you owe them, pay them asap.  Not sure why you're disputing these, but pay the OC and follow the HIPPA process to deal with them.  Getting these off of your reports will have a positive effect.  

 

I'm confused, though, by your statement that the past due amount would go away when you pay your vehicle loan off.  Did you make a deal with them?  Do you have it in writing?  In my experience, what's there will stay there for 7.5 years whether you pay it off or not.  

 

Good luck!  I'm interested in what others will have to say.  They may have better strategies to boost your score.

In the 600's, moving toward 700's and 10K in credit. My motto: At the end of my life I want to be able to say "I wish I hadn't," not "I wish I had."
Message 2 of 4
Anonymous
Not applicable

Re: Decisions

Thanks for the feedback.

 

As for the auto account, the CRs via Myfico shows the current auto balance ($8K) as being past due and the simulator suggests paying this will boost the score. I understand the blemish will be there another 6 years - but I don't quite understand why the account is showing as past due when we are current. Additionally, the "negatives" side of the scale shows my last past due as 0 months ago, which I am assuming is the auto account.  These are two of the four "negatives" dragging the score down.

 

I like your suggestions and was thinking of going that route - just looking some additional views to consider.

 

Thanks

Message 3 of 4
3elizabeth
New Contributor

Re: Decisions

The past due should go away when you are current.  Maybe the payment reporting hasn't caught up with everything yet.  When you are a payment behind, it can show that the whole balance is past due.  You may want to check with your loan company---see what they have to say.  It may just be a glitch.  

In the 600's, moving toward 700's and 10K in credit. My motto: At the end of my life I want to be able to say "I wish I hadn't," not "I wish I had."
Message 4 of 4
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