How long does it take to rebuild your credit

[dujaidecor]

I am a single mother of two boys and havent always done the right thing when it comes to my credit. I want to purchase a home for us in 2013 and have started now actually looking at whats on my credit report. My current FICO score is 488 TU and 483EQ. I need to get it up to at least 620-660 by 2013. Is that feasible? and how do I get there?

My sister offered to add me on a Citi card limit 10k which she has had since 2000. Her credit history is flawless on this card.

Here is what I have on my report.

Student Loan $12,000

Student Loan $ 23,000

Old Capital One card that was charged off in 2005 balance $1753 ( this hasnt been reported on since 2005

Medical Bill for 1950$ (in dispute) My insurance paid this

Capital One card ( active) $500 limit) balance $135 authorize user

PSEG Bill $165

AFNI 43

FCO $759 collection paid 2008

4 accounts Sallie Mae Accounts Refinaced last reported on 10/05

2 Citibank accounts refinanced last reported on 10/05

[rckstrscott]

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@dujaidecor wrote:

I am a single mother of two boys and havent always done the right thing when it comes to my credit. I want to purchase a home for us in 2013 and have started now actually looking at whats on my credit report. My current FICO score is 488 TU and 483EQ. I need to get it up to at least 620-660 by 2013. Is that feasible? and how do I get there?

My sister offered to add me on a Citi card limit 10k which she has had since 2000. Her credit history is flawless on this card.

Here is what I have on my report.

Student Loan $12,000

Student Loan $ 23,000

Old Capital One card that was charged off in 2005 balance $1753 ( this hasnt been reported on since 2005

Medical Bill for 1950$ (in dispute) My insurance paid this

Capital One card ( active) $500 limit) balance $135 authorize user

PSEG Bill $165

AFNI 43

FCO $759 collection paid 2008

4 accounts Sallie Mae Accounts Refinaced last reported on 10/05

2 Citibank accounts refinanced last reported on 10/05

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Anything is possible... do you have any active accounts? Like credit cards that are currently open and active that you arent' an authorized user on? Most mortgage lenders need 3 active tradelines, that are not AU accounts.

That Capital One charge off. It is showing a balance of $1700? This is a HUGE FICO killer. It will put your utilization way high, right now about 900 percent based on your one open account. You need to work to resolve this, or wait until it comes off (which should be soon) -- When was the last time you paid on that account?

PSEG and ANFI, you should attempt to offer a PFD on those, as they are small.. How old are those accounts?

FCO, they are a pain, you might not have much luck getting them removed.

For a mortgage, FHA at least, you will need to get your scores as close to 640 as possible although some lenders will do lower. You will want no new collections within the last year, no late payments in the last year, and most lenders will want open collections to be paid off prior to closing.

I would open a secured card of your own as soon as possible. If your student loans are in good standing, you will have a decent start w/ active lines, but you have a lot of work ahead of you.

-scott

[dujaidecor]

I don't have any active credit cards.

The Capital One card is showing 1700? The balance was 911$ but it shows as 1753$ being owed. My last payment for that card was back in 2003 or 2004. It was first reported in 2005.

PSEG account was 2008 and ANFI 2005

Does the secure credit card actually improve your credit score?

I have already sent off letters to PSEG ,AFNI and goodwill letters to Citibank and Sallie Mae.

Is there any other action I should be taking?

[rckstrscott]

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@dujaidecor wrote:

I don't have any active credit cards.

The Capital One card is showing 1700? The balance was 911$ but it shows as 1753$ being owed. My last payment for that card was back in 2003 or 2004. It was first reported in 2005.

PSEG account was 2008 and ANFI 2005

Does the secure credit card actually improve your credit score?

I have already sent off letters to PSEG ,AFNI and goodwill letters to Citibank and Sallie Mae.

Is there any other action I should be taking?

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FICO likes to see active credit. That is why your scores are so tanked. If you last paid Cap1 in 2004, that account should not be showing, and you should send a letter to the credit bureaus indicating such. That should take care of that one. And that is the huge killer right now.

Secured cards are counted exactly the same in FICO scoring as unsecured. If you open up 1 or 2 secured cards, even with low limits ($200), use them but pay them off every month (MAYBE leave one card showing a small balance) you will see huge FICO improvements right off the bat.

Bottom line, FICO judges creditworthiness. If you don't have credit, how can they judge you high? So your negs are glaring right now.

Your profile is much much better than mine was, and I got a house in 18 months.

-scott

[injustifiiable]

I'm surprised CapOne hasn't tried to sue you yet. They LOVE to sue us poor saps and kick us when we're down. (I'd know, I have a CapOne judgment on my reports!)

Is it out of SOL in your state?

[Anonymous]

hi thought I could ask some honest advice please, so I been attacking my credit hard, already got 5 or 6 negative items removed. some were easy others were a little bit harder. well anyways I have a charge from at&t with anfi anderson financial for $194 date of 1st delinquency is 11/07 so almost 5 years old (guess im wondering if i should try & wake a sleeping giant or not lol). do I try to get them to now validate this debt or try for a pfd & should I try to do now or wait till next month when it is officialy a 5 year old debt. ps. I live in IL.

[timotiger]

I am not exactly answering your question, but your story touched me, and I want to offer something for you to consider. I am a self employed mortgage officer that was hit hard in 2007-08 with the mortgage mess. I lost my home in 2011 after taking a Chapter 13 bankruptcy in 2009 to prevent the foreclosure then. I do a ton of credit counseling as part of getting people ready to buy. I can't stress enough how important it is to get your credit perfect. It really depends on how much disposable income you have to pay towards the debt. The more you have, the faster the rebuild will be. If you could pay everything tomorrow, I think it would take 6-12 months to get to a 620 for an FHA loan. (Moderators, I'm sorry if I am speaking out of turn.) I would also put a monster down payment of 40% to get the house. The reason I am setting this huge goals is that mortgage debt isn't like credit card debt. Once you get in trouble with the lender for not making payments, 90 days flies by. Now my point, I don't believe home ownership is what it was for our parents. A home is where your family is. Not a bunch of framing and drywall that stoke your ego. If you have a mortgage with 3-5% down, you will end up paying 2.5-3 times what you paid for the house in mortgage interest. My advise is to make a 5 year plan to get your credit to 720+ and accumulate $50,000. I hate paying interest expense and I am tired of feeding these bankers. I do want a house again, but I am payinig cash. I'm not sure how old your children are, but it won't be long before they are off to college. Many people have more house than they need and downsize at that point. Houses will bleed you with decor, utilities and maintenance. It's not just money, it's time too. I would offer that you find the cheapest, but safe apartment to rent. If you want the feeling of a house, rent with another single mom and her kids.  I've heard that the Islam religion instructs there members to avoid interest expense at all cost. Several members loan another member an interest fee loan that is paid back quickly. Once it's paid, another member does the same for them. I admire that one principal in their religion. I totally believe you could patch your credit and qualify for a loan quickly, but please consider what is most important in life and the value of being financially semi independant.

[Shogun]

$194 debt.  It's 5 years old.  SOL on written contracts in IL is 10 years.  You have 5 more years of this bill with you being able to be sued for it.  I'd pay it, PFD it or PIF and GW just to get rid of it.

[rckstrscott]

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@Shogun wrote:

$194 debt.  It's 5 years old.  SOL on written contracts in IL is 10 years.  You have 5 more years of this bill with you being able to be sued for it.  I'd pay it, PFD it or PIF and GW just to get rid of it.

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Agreed.. I would make efforts for a PFD first..

If they don't accept or are unwilling, I would look for something erroneous on the debt reporting, and maybe you could push a direct dispute (not through the CRA, but straight to ANFI) -- mind you, this is only if there is something incorrect about the reporting; you could also push a BBB or FTC complaint IF they are any violations..

If there is nothing wrong with the reporting, or no potential FDCPA issue, I would PIF and then GW... 

Shogun is right, its only $194 dollars.. don't settle, pay in full and you will have a better chance of GW down the line

-scott

[Anonymous]

well this is a old account that I can't even guarantee i actually still owe it should i try to send them a debt validation letter or dig up more info on this account?