Frustrated - Recent Lates & Util ?s

[MBOhio2]

A little background info before I ask my questions:

Due to unemployment after college, I had a handful of my student loan accounts charge-off in late 2009. After the charge-offs happenned, the creditor began reporting the accounts as ND and I have been making monthly payments to the student loan creditors. Over the past year, I've significantly raised my credit scores and was feeling great about the house we're building and being able to close in the near future.

Then, at the beginning of November, a dispute letter that I wrote to the student loan companies in June 2010 (yes, 18 months old!!) finally made its way to the student loan creditor and, as a result, they updated all of the charged-off accounts with 120-day late payments through October 2011. So for those accounts, they used to look like I hadn't had a late payment for almost 2 years and now they look like I had a serious late payment 2 months ago. This plummeted my scores 50 points and now I'm shy of the 620 I need to close on my home. Scores are hovering around 600-605.

I'm devastated and just curious what everyone's thoughts are on the following:

1) I know late payments hurt less as time goes on and many people see a bump especially around the 2-year mark, but will I see any score increases at all with the late payments going from 2 months to 4 months old? I know this is really grasping, but I'm desperate.

2) My current utilization is 37% - all of my CCs are $0 balance, but I do have a large LOC credit that still has a balance. With scores of 600-605, what are everyone's thoughts on what utilization % I would need to be at in order to get the 15 or points I need to get to 620? I cannot pay this LOC down to $0, but can pay it down some.

Thanks!!

[MBOhio2]

Any thoughts??

[MarineVietVet]

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@MBOhio2 wrote:

A little background info before I ask my questions:

Due to unemployment after college, I had a handful of my student loan accounts charge-off in late 2009. After the charge-offs happenned, the creditor began reporting the accounts as ND and I have been making monthly payments to the student loan creditors. Over the past year, I've significantly raised my credit scores and was feeling great about the house we're building and being able to close in the near future.

Then, at the beginning of November, a dispute letter that I wrote to the student loan companies in June 2010 (yes, 18 months old!!) finally made its way to the student loan creditor and, as a result, they updated all of the charged-off accounts with 120-day late payments through October 2011. So for those accounts, they used to look like I hadn't had a late payment for almost 2 years and now they look like I had a serious late payment 2 months ago. This plummeted my scores 50 points and now I'm shy of the 620 I need to close on my home. Scores are hovering around 600-605.

I'm devastated and just curious what everyone's thoughts are on the following:

1) I know late payments hurt less as time goes on and many people see a bump especially around the 2-year mark, but will I see any score increases at all with the late payments going from 2 months to 4 months old? I know this is really grasping, but I'm desperate.

2) My current utilization is 37% - all of my CCs are $0 balance, but I do have a large LOC credit that still has a balance. With scores of 600-605, what are everyone's thoughts on what utilization % I would need to be at in order to get the 15 or points I need to get to 620? I cannot pay this LOC down to $0, but can pay it down some.

Thanks!!

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These of course are my opinions only.

1) Going from 2 months of aging to 4 months will make no difference. It's still looked at as a recent late. If I'm reading correctly the late is reporting as a 120? That is something that will hurt for the entire 7 years it's allowed to report.

2) What is your current CL and balance of the LOC? How much can you pay on this and how quickly?

Edited for a typo.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[MBOhio2]

Hi marine - I appreciate any and all feedback at this standpoint!

Yes, the student loans are being reported as 120-day through October 2011 and then for November 2011, it says "OK." It appears that the lender just doesn't update the accounts unless they are somehow propted (e.g. by my dispute letter that arrived 18 months late!) so they are back to being reported as "OK" in November and suspect that, like before, they will continue being reported as "OK" for December 2011 and each month going forward unless something prompts them to update otherwise.

The total of my CLs is $34,950 (LOC = $29,200). At the time of the 598 credit score, all CCs were $0 except one with a balance of $478 (since paid to $0) and I had a balance on my LOC of $15,100 (since paid to $10,700) - I have not yet received a SW alert for these recent CC or LOC payments. My math says that the util %s are as follows:

Overall =  44%

LOC = 51%.

I won't be able to quite pay it off, but I could probably pay the LOC down to $5000 or even lower, but not all of the way off. If I do this, then the util %s would be:

Overall =  16%

LOC = 17%.

Is it reasonable that this could get me 16-22 points?? Thoughts? Thanks!!

[MarineVietVet]

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@MBOhio2 wrote:

Hi marine - I appreciate any and all feedback at this standpoint! The student loans are being reported as a "90-day" late... for some reason it hasn't bumped up to 120-day even though the accounts charged off 2 years ago., It appears that the lender of these loans just don't update the account unless they are somehow propted (e.g. by my dispute letter) so they are back to being reported as "OK" in November and suspect that, like before, they will continue being reported as "OK" for December and each month going forward unless something prompts them to update otherwise.

The total of my CLs is $34,950 (LOC = $29,200). At the time of the 598 credit score, all CCs were $0 except one with a balance of $478 (since paid to $0) and I had a balance on my LOC of $15,100 (since paid to $10,700) - I have not yet received a SW alert for these recent CC or LOC payments. My math says that this is an overall util % of 44% and a LOC util % of 5%. I won't be able to quite pay it off, but I could probably pay the LOC down to $5000 or even lower, but not all of the way off.

Thoughts? Thanks!!

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I come up with different numbers. Overall utilization is 31% (Total balances of $10,700 (LOC) divided by Total CL's of $34,950).

For the LOC I get utilization of 37% ( Balance of $10,700 divided by the CL of $29,200).

If you lowered the balance on the LOC to $5,000 that means a utilization of 17% for the LOC and overall utilization of 16% (Balance of $5,700 on the LOC divided by total CL's of $34,950.

That's a pretty good drop for both overall and individual utilization. I just can't say exactly how much of a bump your score will get though. All you can do if pay and wait for everything to update.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[MBOhio2]

I should have clarified - the utilization %s that I mention above are based on the balances that I had when the 598 score was pulled - so $478 on one CC and $15,100 on the LOC. I have recently paid those accounts down to $0 and $10,700 respectively, but have no idea how that has affected my score yet because I have not received a SW alert yet. So basically, I was using the original balances as my starting point since those are the balances that correlate to the 598 score.

Thanks for your thoughts... getting it down to $5000 is a significant drop so I really hope it causes a good score bump. Since I have some time (and can get the LOC to update the balance with the CRAs at any time), I'm going to start a process of paying $2000 and then seeing what happens to my score, paying $2000 and then seeing what happens, etc. I have to get my score to 620 and will do whatever I need to get there, but I want to keep as much $ in the bank as possible!

Is it at least reasonable to think that the drop from 44%/51% to 16%/17% will get me 16-22 points?

[Trigga]

I have a question please if a 120 day late is allowed to report for 7 years how long does a 30 day late get to report on my credit report ? Thanks  in advance !

[llecs]

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@Trigga wrote:

I have a question please if a 120 day late is allowed to report for 7 years how long does a 30 day late get to report on my credit report ? Thanks  in advance !

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The same...7 yrs.

[Trigga]

What i figuerd darn ! Thx again