Help rebuilding my credit after a short- sale

[Anonymous]

Long story short, I'm a fairly responsible person when it comes to my finances but I was forced to go through a short sale in early 2009.

A simple situation really, I was cosigned on a house with my mother and she died just before the peak of the economic downturn/housing crisis. I had put a 20% down payment on the house for her when the house was purchased and she was to make the payments. Upon her death two years later the 320k note fell to me. Having my own mortgage left me unable to pay both and I chose to attempt short sale.

During the short sale process (which lasted 11 months to the day) I burned through most of my cash savings and eventually went +120 days late on the payments and the bank began foreclosure proceedings despite an active offer on the house. My prized 790 score fell to a sub 600 low. Thankfully, I was able to keep my job the entire time and had stead roomates in my home which helped significantly. The house eventually sold short for 60% of its original sale price and I was left to rebuild my credit worthiness.

Since that time I have been working on rebuilding but I appear to have reached a plateau with both my TU and EQ scores sitting in the upper 600’s for some time. I need some advice on how to keep the ball moving to try to reach my previous score and but the whole nightmare behind me for good. I have only 1 credit card and I pay it off each month and my car is paid off. My main problem I feel is that I much preffer to pay cash for almost everyting. I think seeing the physical money leave my

Current numbers:

TU: 683

EQ: 671

Mortgage debt: $188,000

Revolving debt: $0 of $15000.

What are my best options for raising my score? In the near future (3-4 years) I plan to purchase a new vehicle and hopefully a larger house so I want to be ready.

Thanks

[guiness56]

I would try to get another CC.  Let one report a small balance (at 9% or below), keep the other at 0.

Installment loans, including mortgages, only count 10% of your score for utilization.

Other than the short sale, do you have any other lates or negative information on your CR.

[Anonymous]

only other late i have is a medical bill and a tax lein from when i was in college (2004). both have since been paid (2006ish) and im assuming that record will drop off soon.

So your suggestion is to open a new CC line and not utilize it, and take my existing one and use it to 7-8% then pay it off each month?

[guiness56]

I would start by sending whomever is reporting the medical debt a good will letter and ask for its removal.  They don't have to but they can.

As for the tax lien, this is one of the worst to have on your report.  They don't come off for 7 years from the date paid.  If that was in 06 you are looking at 2013 or maybe later.  Was it a state of federal lien? 

FICO likes to see you use your revolving.  For optimum scoring, use half of your CC and keep them at 9% or below.  PIF before the statement posts to avoid interest.  Keep the others at 0.  You can change them up occassionaly so you are using both of them.

[Anonymous]

State tax lein for an erroneous penatly. I paid it but it was later refunded after I fought franchise tax board on it. Resulting from the financial assistance I gave my mom they came to beleive we were married and filling incorectly.

I got my money back but it looks like the record of the lein is still there.

[guiness56]

You need to contact the state and ask them to remove it based on the erroneous filing to begin with.

Getting that removed will help considerably.

[Anonymous]

I contacte the state and got them to remove the record about a year ago. At that point they said to wait 6mo for it to reflect on my score but it remained. About two months ago I contacted the 3 agencies and requested that it be removed but it appears that only Experian actually removed it.

[guiness56]

Contact the state again.  It should not be reporting.  You might consider filing a complaint with your states AG office.

6 months is a long time to reflect its removal.