Fixing my credit score while Rehabbing defaulted student loans... Help!

[StudentSam]

Hey guys. Ive been through a lot, a long road here... And i'm finally getting things back on track. I was very disorganized before, and during college. I left school after 2 years to start my own business. I have been semi-sucessful and making good money for my age (24). I started getting collection calls and threats around jan-feb of this year. Last time I've been to school was May 2010 so I assume my deferrment/grace/etc period passed and I defaulted on a few loans. They had all old contact information on file, I understand it's my responsibility to keep them updated and current, I learned from that now...

- I Have $4k balance with Nelnet (not defaulted) That I have been paying on time no problem..

- $2600 balance on defaulted perkins loan (being rehabbed as we speak, $300 a month for 8 months)

- $600 Balance on a defaulted loan with federal gov department of education (just entered rehab program, $110 a month for 9 months)

- $1000 limit on Bank Of America Card completely paid off

- $500 limit on Capital one credit card completely paid off

- Defaulted/settled Chase Credit Card (settled for less then to ttl ammount)

These are all of the things on my credit report. Plus 6 hard inquiries (3-4 from debt collectors, 1 from a potential housing building)

I am in fix-credit mode and really would love if you guys could help me. My score is a 517 until experian updates, should go up to about 556 with my credit use at 0% (both cards are completely paid off)

I keep a good balance in the bank, and could afford to make some larger payments if it was the smarter thing to do. Right now I'm in a deadlock because I can't raise my score until those defaulted loans get rehabbed and converted into new loans that i could either settle with or make a nice payment plan.

My goal now is to fix my credit and get it over 600 if possible. Should I max out my credit card then pay it all off at once and do that a few times in a row ? Will they increase my credit at all?

I have a small business and can't even open a credit line for my business because my personal credit is so poor. I would love to open a biz credit card and one day an amex. I make a good amt of money monthly being self employed so I really want to be smart about my money now in repairing the damage done with my own naivity and stupidity

Thank you very much! 

[apandabear]

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@StudentSam wrote:

My goal now is to fix my credit and get it over 600 if possible. Should I max out my credit card then pay it all off at once and do that a few times in a row ? Will they increase my credit at all?

What?? No. That won't do anything.

So you now have 2 open credit cards? That should be good enough to garden. Use them for monthly expenses and pay in full before your statement cuts (before you get the bill). You can try leaving a small balance on one of the cards (1-9% of your credit limit) to see if that scores you a few more points. But maxing it out and paying it down a couple times isn't going to do anything. It might even hurt (temporarily) depending on when you make your payments.

You might try GW any late or otherwise derogatory accounts. 

Were those your only baddies?

Also, where did you get your credit score, and what bureau is it from?

[StudentSam]

I have 2 open credit cards. Only baddies are the defaulted loans (Which r being rehabbed) and this chase credit card from college that defaulted but I paid/settled for less...

I will use my cards fo expenses then pay before the satement hits. Anything else I can do ?

Thank you guys

I got my credit score from citi identity monitor and experian.com

[apandabear]

I'm in a very similar position. I have way more bad things on my account from about 2 years ago though.

I have 2 open cards and am in the process of rehabbing my student loans. 

Did you read some of the LONG thread in the student loans section about rehab? You might be able to get some of the negative remarks and late payments removed once the rehab process is complete. I read that thread and keep an eye on it. I'm done with rehab in September/October as long as someone buys my loans.

I don't know how Chase is with goodwill adjustments (GW), but you could try to see if they will remove late payments or negative remarks. Read a little bit about GW if you haven't already and try that.

How long have you had your two credit cards?

Also, your actual FICO scores might be higher. You can buy your equifax and transunion scores at this website. These are generally used by lenders, whereas the scores you are seeing are not. I have scorewatch to track my EQ FICO. I use USAA to pull my credit report daily.

Keep an eye on the forums and keep asking questions.

[StudentSam]

ive had both cards since 2007. How do i go about asking chase for GW ? I already paid /settled for less

[StudentSam]

Thanks a lot guys! Some updates..

My business partner has added me as an authorized user for his Amex Plum card, I should be receiving it this week. In my line of work, we use credit cards to purchase things daily and then we pay it off when our accounts receiveable comes in weekly or bi-weekly. The credit cards allow us to extend credit to fund our marketing campaigns while we wait for the returns to come in a week later.. I should be starting to use that next week, paying it off every week at least also..

Besides that, I have been using my BoFA 1k limit card for these types of 'credit buys' for about 3 weeks now, I receive the funds within a week then pay off the bill back to $200-300.. Never back to 0 though..

This has bumped more score 6 pts.. Also I am using Experian to check my score, should I be using something else? Sorry, I'm a newb but really want my score to be 650+ before all is said and done, i'd love my own Amex one day!

I'm hoping once I rehab these loans I will get a big bump.

my score currently is a 567, I wonder how many pts it will go up once Amex reports me as an authorized user on the plum card...

Thanks again guys!