I have lots of cash, how best to rebuild

[Anonymous]

I've been a lurker for the past few months and want to say thanks to everyone.  You've given me the knowledge to get back on track. 

2.5 years ago I couldn't get anything aside from a Capital One $500 credit limit and 480 credit score. Last year I couldn't get a car loan with a 520-550 score. 

Now I've gottan a car loan (last month, dealer was able to beat USAA financing), $1500 Cap 1, $2k secured USAA Amex, $500 Credit 1, $500 VS, $500 Care Credit (just got that tonight and will call for a CLI tomorrow, and was very surprised I got anything as I burned them about 3 years ago)

I'm a doctor and doing well now. I had to charge off some debt before going to school and then my ex-husband worked hard to destroy my credit while I was away at school.  I divorced him in 2011 and graduated in 2012. I'm still single, btw.... I promise there are a few single sexy female doctors left. 

I'm banking cash and aiming at getting a house this fall. This may be unrealistic but I'm trying. Current MyFico is 607. 

I've gotten tons dropped off my credit and have sitting next to me currently a stack of 12 letters to every single badie printed, a combo of GW, PFD, and for the 2 judgements, asking for a nonsuit motion.  I charge everything and pay it off every 2 weeks, leaving a 10% balance before reporting time. Everything (car payment) is paid well in advance and never late. 

I'm looking for more ways to boost my score. Thoughts I had:

-Authorized signor.  For example, best friend has very (10K, maybe unlimited on her Amex?) high limits on her credit cards

-More secured cards (can go up to 5k with USAA I think, maybe get a USAA mastercard secured?)

-Stop randomly applying for lines of credit

I'm also having a hard time getting one student loan (Navient, sold from SM) corrected, that says it was randomly 120 days late 2 years ago.  3 of the loans say this, the other 20 don't. I have disputed this with the credit agencies and not gotten far. All Navient student loans show actively current (deferred without a payment due until December). 

I did charge off around 24k in private Citibank student loans I took in 2008, which have dropped off my credit by now (based on my most recent Experian pull today) and never went into a judgement. 

What else can I do??

::Fistbump::

[Anonymous]

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-Stop randomly applying for lines of credit

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Start there. 

Welcome to the boards  

Get the baddies corrected on your reports and deleted or paid and deleted. Most mortgage lenders will require you to pay them off anyway, so make sure that is done. 

If the late payments aren't accurate, call Navient and get a dialogue going about it to get it corrected. If you have proof of payment, it should be no problem getting those corrected. 

The only other thing that will help at this point is waiting. You're doing all the right things though so good for you. Patience is the hardest part. 

[bstone]

I'm still single, btw.... I promise there are a few single sexy female doctors left


I'd like to discuss this in more detail.

Seriously though, the advice above is great. You want three revolving lines of credit for optimal scoring, which you already have so the only thing to do is work on paying (and hopefully deleting) the baddies and letting your score increase naturally.

You could probably buy a house this fall if you can get your mid score above 620, but your rate will be higher because of the low score. I might suggest waiting six to twelve months so your score has a chance to increase.

Good luck.

[Anonymous]

Welcome!

Check your PMs

[Anonymous]

Welcome....do not apply for anything else. Work on getting as many negatives off your report. Approach each negative systematically.

While getting a house is perhaps doable, it may not be worth the cost. You need to get your middle mortgage Fico score up. If you don't know what all your Fico scores, inlcuding your mortgage scores, then you need to buy them here on myfico.com.

We can't give you any objective and sound advice without knowing those scores. And don't buy a house with very low scores and at a high interest rate, if you can wait even 6 months, clean up your credit reports and save for a nice down payment.

Stay active here and you'll be on your way.

[crrredit]

I'd stash all that cash away into an investment fund. A lot of us got in trouble because we didn't have the resources to weather a financial storm. 

[Anonymous]

IMO Doc,

store that cash in an investment - be it CD etc something with a return. Keep working on collections etc - never give up.  USAA does offer a Classic unsecured that graduates to a prime card - you would qualify at 607 - but like everyone else said, I'd wait. 

As far as I know…USAA secured does not graduate, you must reapply at the end of your tenure. 

Id drop that Credit 1 like a bad habit in 12 mths or whenever deemed best. Rumor is carrying subprime doesn't bode well for some underwriters of the prime market. 

Girlfriend MD/DO, you are a Unicorn!  The rarest of the single ladies, highly educated, job in demand, taking ahold of her financial future, a rare breed. WORK IT SISTER!

[9CLINE]

Congrats on completing school and taking the plunge to correct and improve the past.. sounds like a good plan you have,and you are most definitely in the right place to get the best advice.
Welcome 2 the forum....

[Anonymous]

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@Anonymous wrote:

Id drop that Credit 1 like a bad habit in 12 mths or whenever deemed best. Rumor is carrying subprime doesn't bode well for some underwriters of the prime market. 

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I second this. Also, stop applying.

If your friend is willing to add you as an authorized user, it will certainly help. You don't even have to have a card, just having your name on the account helps...as long as those cards don't ever default.

[Anonymous]

I agree with pretty much everything everyone else said. I'd encourage you from this point to be very selective about what financial institutions you do business with and what credit products you agree to. Research various products, identify the ones that fit your needs best, contact the lender and find out what they're looking for score wise, and wait till you meet the requirements they tell you they're looking for to app. If you don't get it when you do app, keep servicing your debt on time and try again at a later date(at least 6 months, but a year is probably good). Be patient, and you'll be rewarded with things the impatient won't get. 

If you want another secured card or to replace one of your bad secured cards, State Department Federal Credit Union offers a Visa Platinum Rewards secured card that you can fund up to like 50k if you wanted to. That's a bit excessive and would give you a terrible return on your money at current savings interest, but the point is you can turn that into a fat limit card. There's no annual fee, platinum benefits(rental insurance, extended warranties, etc...), rewards program, and low fees in general. You can qualify for membership by buying a 1 year membership with the American Consumer Council for 5 dollars. You can setup your membership and fund the savings online, but don't apply for the card online, call in for that and you'll avoid a hard pull.

Their site is sdfcu.org and the american consumer council site is americanconsumercouncil.org.