I MESSED UP!!! NOW WHAT!

[clgray]

I ran into some financial trouble a couple of months ago.  I was juggling bills and trying to make ends meet.  Anyway, I ended up maxing out my credit cards.  Fortunately, I landed a great job in the process to fix the damage.  I have been working two full time jobs to clean up my mess.  I came into a lump sum of money and I now have the money to pay six of my ten credit cards in full.  I got an alert today reporting one 30 day late from HSBC auto.  I haven't been late on any of my bills in over two years.  My credit score has plunged tremendously, about 70 points for this.  I was hoping to buy a house in the next six months or so.  What should I do?  Need to fix this fast.

[Anonymous]

First thing is to pay the balances down to under 10% utilization.  I would pay off the one with the 30 day late over the phone, but I would ask to speak to a customer service manager prior.  Ask if out of good will they will remove the late payment as long as you are paying off the full balance.  They might do it.  If not, pay the balance and then submit a GW letter via the mail.  If you get utilization down below 10% you will se a big jump in score.  Get the 1 late removed and you will see even another jump.

[clgray]

The 30 day late is a car payment.  I was never late before.  Do you think that I have messed up my chances of getting a mortgage loan in the next six months? 

With high utilization score was a 606

When late payment hit it is a 536

[Anonymous]

Call the car company and ask them to forgive and remove the late payment.  If they say yes, ask them to send it in writing.  If they say no, send a GW letter in writing.  To be safe, you need to have a 580 midscore or higher for FHA loan. High reserves/Low DTI/High down payment can all affect this.  Usually you need 12 months clean credit with no lates.  If you can not get the late removed, approach a lender after getting utilizations under control and all the balances are reporting correctly.  Explain your situation to the lenders until you find one you are comfotable with and one who is comfotable with your situation.

[FretlessMayhem]

I agree completely. You need to GW the auto late pronto! If they so no, GW again! If they so no, GW again!

Refuse to give up. Somewhere there is a sympathetic CSR out there that has the power to restore 70 points.