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Regular Contributor
mahiven
Posts: 176
Registered: ‎04-19-2011
0

Help - rebuilding credit to purchase first home.

[ Edited ]

Hello--

 

First I want to start out by thanking anyone who takes the time to read this and give me advice. My wife and I are both twenty-four years old, we have been married for nearly five years and are expecting our third child. I have a very secure job that I enjoy and we're finally in a place of securing the American dream and committing to 30 years of debt for a plot of soil. Here is some background music as to how I got into the mess I am in:

 

In 2006 my soon-to-be wife and I leased two vehicles. A month later we were married. One month later we got the wonderful news that we wereexpecting our first child. Under pressure from our family, we quit our happy jobs and moved to South Texas. The job economy was blighted and depressed and after six months of no success we had to turn in one of our leased vehicles. I landed a job in my industry. Two years later we found out we were expecting our son, who ended up having a heart condition. My insurance through my work didn't cover a lot of the expenses so we were forced to turn in our other vehicle to focus on my child's health.

 

If you're still following me, that means that I have to willful repossessions on my credit-yikes and embarassing. On top of that someone took the liberty of opening a Helzberg diamond card in my social security number, left a $48 balance on it and sent it into collections. I have contacted Helzberg, the credit bureaus and for the most part, I think I have it removed. I found out today that we have a collection account from 2006 for a utility bill totaling $179-- something I (seriously, because I know we've all heard this before) knew nothing about. I mean, c'mon, I'm not going to jeopardize my credit over $180. I am working on getting that resolved.

 

Since all of that drama, I've accepted an awesome job making 20% more than I was and have relocated. My job is secure and my pay is excellent. With that, we're working to pay everything down. Between my wife and I we have half a dozen credit cards with low limits on them. $6000, $1500, $750, $700, $500, $300. Grand total they're at 90% utilization and we're working on paying those down. I make more than the minimum payment each month and we're not actively using any of them.

 

A huge thank you if you're still reading this. We're now sitting with two turned in leases (both of which I settled and paid in full), one collection account (which I have no idea what it is for, and will pay it as soon as I hunt it down) and some high credit card debt (but managable balances.)

 

Prior to finding this forum I didn't know that websites such as TrueCredit.com were consider FAKKO. I had been paying them to monitor my credit (and that collection account slipped through their cracks) and we told that my scores were 634 TU, 582 EQ, and 638 EX. Excellent, considering the mortgage company we were speaking to said I needed a middle number of 620 to get a mortgage loan (mind you that is 20 points lower than the 640 my bank told me I needed.)

 

Today I went in and they pulled my credit and I found the opposite. My middle score is a 602 with TU being the lowest at 590, and EQ/EX being 602 and 604. That really puzzled me that they were so far apart, especially the TU one since it was my second highest according to TrueCredit.com. Needless to say I have cancelled that subscription.

 

The mortgage company said they cannot lend to someone with a 602 (which frustrates me because what I am reading online is a lot of people saying they got mortgages in that range.) but that is neither here nor there. What I want to know is, based off of your experience, aside from continuing to pay down my credit cards, resolve that collection account, and wait... what can I do to bring my scores up? My credit shows 5 years of on-time payments for EVERYTHING except those GMAC car accounts. I have a HUGE number of inquiries because of a failed attempt to get a car loan last summer, so I have became very protective over allowing people to pull my credit.

 

Any advice is appreciated! Thank you.



03/19/2011 EQ: 627 EX: 602 TU 590 (lender pull) 07/16/2011 EQ: 646 EX: 629 TU 647 Fell off the wagon in 2012. Starting over in 2013.Current Score: 01/07/2013 EQ: 646 EX: ??? TU 608 Goal Score: 700 club

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Contributor
MrMurphyBrown
Posts: 113
Registered: ‎04-17-2011
0

Re: Help - rebuilding credit to purchase first home.

[ Edited ]

Well in terms of your score(s) -- your utilization is hurting you by at least 25-50 points, maybe more; just buckling down paying that off in order from Highest APR to lowest (save yourself the interest this way) -- will get you well on your way to your target numbers; if not completely to your goal.  Have you tried the FICO simulator to reduce your utilization to <9% or less?

 

I'm sure you are well aware also, that you should not close any of these cards right now -- that will reduce your available credit and impact the all important utilization that accounts for 30% of your score.

 

Run the simulation and see what it says, let us know :smileyhappy:  At any rate your soon to be lender will appreciate that you aren't strapped on the cards going into the mortgage.

 

In terms of the remainder of the baddies on your reports, would help to know how these are reporting -- date of first delinquency etc.  But from your first post, it seems utilization is the biggest hurt.  Are the repos's showing a balance?  Charge off?

 

There's many bright minds around here that will poke their head in and give you some additional ideas.

 

 

Scores:  4/2014 EQ 679 EX 723 TU 719  Cards:  NFCU 25K, Chase 5K, Barclaycard 3K, HC 2.2K Capital One 2K, Target 1.2K, Walmart 1K, Misc GEMB Cards 6K Oh.. and a nice new FAT CL from BoA! :smileyhappy:



In the garden until 10/23/2014


Moderator
Shogun
Posts: 12,952
Registered: ‎04-15-2011
0

Re: Help - rebuilding credit to purchase first home.

Yes paying down your utilization will definitely show improvements in your scores.  Keep paying them down, don't use them.  If the collection is from 2006 it should be outside the SOL of Texas which is 4 years.   Offer a PFD and get rid of that collection.  They're more apt to do it because it is outside the SOL and they can get paid.  Send goodwill letters to the ones that were charged off.  It only costs a stamp and you could get lucky.  Good luck to your family!


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008
0

Re: Help - rebuilding credit to purchase first home.

If a charged off account is not paid, it is highly unlikely a GW letter will work.

 

A CO does not mean you don't have to pay.  I would at least attempt a PFD or a settlement PFD.

Moderator
Shogun
Posts: 12,952
Registered: ‎04-15-2011
0

Re: Help - rebuilding credit to purchase first home.

Guiness I believe he said they were paid in full, that's why I suggested the GW.  Anyway that's what I think.  There's a lot of reading there and my ADD might have kicked in.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008
0

Re: Help - rebuilding credit to purchase first home.


Shogun wrote:

Guiness I believe he said they were paid in full, that's why I suggested the GW.  Anyway that's what I think.  There's a lot of reading there and my ADD might have kicked in.


Again, it's me.  I guess I got lost in the reading.

Moderator
Shogun
Posts: 12,952
Registered: ‎04-15-2011
0

Re: Help - rebuilding credit to purchase first home.

LOL...   You're one of my goto people on here guiness!  I have to watch out for my own reading, easily distracted.  :smileyhappy:


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Regular Contributor
mahiven
Posts: 176
Registered: ‎04-19-2011
0

Re: Help - rebuilding credit to purchase first home.

Yeah, I typed a short novel there, but I wanted to make sure I told y'all everything. Sorry about that.

 

Yes, the two charge offs are paid. On my credit they show as "Charge Off (Paid)" I thought about sending them letters seeing if they would goodwill something nice onto them. Unfortunately, when I paid, I didn't know I could ask them to delete it in exchange for payment. I doubt GMAC would go for it, but in both cases, I was the one that called them to see about resolving it. 

 

Aside from continuing to pay down the credit cards to <10% utilization, is there anything else you can think of that would get us to that magical 640 I need for a mortgage?



03/19/2011 EQ: 627 EX: 602 TU 590 (lender pull) 07/16/2011 EQ: 646 EX: 629 TU 647 Fell off the wagon in 2012. Starting over in 2013.Current Score: 01/07/2013 EQ: 646 EX: ??? TU 608 Goal Score: 700 club

Take the FICO Fitness Challenge
Contributor
MrMurphyBrown
Posts: 113
Registered: ‎04-17-2011
0

Re: Help - rebuilding credit to purchase first home.

[ Edited ]

Did you use the simulator?  It may have that answer for you already.  If you can GW them, and get your util % down -- you'll be set.

 

Good luck :smileyhappy:

 

 

Scores:  4/2014 EQ 679 EX 723 TU 719  Cards:  NFCU 25K, Chase 5K, Barclaycard 3K, HC 2.2K Capital One 2K, Target 1.2K, Walmart 1K, Misc GEMB Cards 6K Oh.. and a nice new FAT CL from BoA! :smileyhappy:



In the garden until 10/23/2014


Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008
0

Re: Help - rebuilding credit to purchase first home.

Just paying down the utilization will have a big impact on your score. 

 

Try to PFD the collection.  If it is newer it is having a big impact on your score.

 

Do you have any other lates or other negative information on your CR?

 

You will never know if the GW will work unless you try.  All they can say is no.


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