I think I am doing it all the way WRONG!

[Inquisitiveone]

Okay, so I am a newbe

I am sincerely trying to understand this credit thing. I filed chapter 7 and discharged in 2012. I have two cc *Cap 1: 300cl each. One credit account with Fingerhut: 400cl just increased from 200   I have some accounts in collections that I am currently working on now that my income is higher. 

I really think my patience level has a lot to do with it, I want everything now and I realize that isnt going to happen w/o learning the lesson first. 

My goal for the next 6 months is to add a revolving loan with my bank and a credit card (Citi). I am about to pay off my car so I wont have to worry about a loan anymore and latter in 2015 start attacking my S/L debt. 

So, if some one can give me advice on the following: 

• What can I do for a significant point increase of any sort? 
• Do I really have to wait 2 years to see a significant difference in my overall score?
• Why is it when I pull my score its different than when its pulled from a lender? 
• Can there really be a significant increase in 6 to 8 months?

Any information you can provide will be very helpful! 

Thanks!!

[Anonymous]

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@Inquisitiveone wrote:

Okay, so I am a newbe

I am sincerely trying to understand this credit thing. I filed chapter 7 and discharged in 2012. I have two cc *Cap 1: 300cl each. One credit account with Fingerhut: 400cl just increased from 200   I have some accounts in collections that I am currently working on now that my income is higher. 

I really think my patience level has a lot to do with it, I want everything now and I realize that isnt going to happen w/o learning the lesson first. 

My goal for the next 6 months is to add a revolving loan with my bank and a credit card (Citi). I am about to pay off my car so I wont have to worry about a loan anymore and latter in 2015 start attacking my S/L debt. 

So, if some one can give me advice on the following: 

• What can I do for a significant point increase of any sort? 
• Do I really have to wait 2 years to see a significant difference in my overall score?
• Why is it when I pull my score its different than when its pulled from a lender? 
• Can there really be a significant increase in 6 to 8 months?

Any information you can provide will be very helpful! 

Thanks!!

---

Heya,  

Great to see you're starting your rebuilding journey.  You are right on point; patience is key.  In the game of credit building, you're dealing in increments of 30 day time periods.  Everything takes months (i.e. inquiries falling off your credit report, etc).  

Assuming this wouldn't affect you financially too much, one thing I would suggest is to not fully pay off the auto loan. Having an open installment loan actually helps your score.  I'm sure someone else can weigh on this - but for what it's worth, what I did was pay my auto loan down from 19k to 3k and kept making minimum payments on it for  two years, just to keep it open and current.  Again, if you'd rather pay off your debt and not have to worry about it, then I am always one to condone taking care of your debts before worrying about your Fico score. That's all up to you. 

To answer your questions:

What can I do for a significant point increase of any sort? 

I would suggest you start doing good will (GW) phone calls, emails and letters to try to get as many negative accounts on your credit report removed/updated.  If you have any accounts that are charged off and not included in your bankruptcy, you might be able to do ask creditors for a "pay for delete" (PFD).  Keep your utilization low, pay your accounts on time always, and last but not least, don't over-apply for credit.  Know when the right time is to stop after going on an app spree.  Gardening will be your friend after going on a massive app-spree. 

Do I really have to wait 2 years to see a significant difference in my overall score?

Absolutely not.  I've been able to see significant increases (+50 points) in the course of one month, by paying down balances, getting soft-pull credit line increases, and asking for good will deletions of old accounts with bad history.

Why is it when I pull my score its different than when its pulled from a lender? 

This is because there are a TON of different scoring models.  Fico alone has tens of different types of Fico scores.  Some are geared toward mortgage lending, some toward auto loans, etc.  There are also non-Fico scores known as "FAKO" scores.  These are more-often-than-not, useless scores that are meant more for educational purposes than anything else. 

Can there really be a significant increase in 6 to 8 months?

Even less if you keep your utilization low, keep making all your payments on time, and get some success with good will deletions/updates.

[msbia]

+1 Sonic....some very solid advice there with regard to the pay for delete, and goodwill letters. Make sure to go over your three credit reports with a fine tooth comb. Anything erroneously reported, you can dispute. I was able to get two things off of my TU that way. In addition, if you have any baddies scheduled to fall off the report within 6 months you can ask the CB via dispute for early deletion. That worked for me as well.

• What can I do for a significant point increase of any sort? All of the above while utilizing the credit that you already have. With the credit cards you want to use them frequently, but pay them all off before the statement cuts. Let ONE card report a balance between 1-9% and then pay it off for optimal scoring. For instance, one Cap1 card...spend $100....pay it down to $20, let the statement cut and then pay it. The other cards should be at $0. Do this each month.
  

• Do I really have to wait 2 years to see a significant difference in my overall score? No. I had zero credit and a 610 score in January of this year.
  

• Why is it when I pull my score its different than when its pulled from a lender? Internal scoring with banks and auto lenders differ from true FICO scoring models. Search the forums, there is valuable information here about that.
  

• Can there really be a significant increase in 6 to 8 months? YES!. And good luck to you!
  

[Anonymous]

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@Inquisitiveone wrote:

Okay, so I am a newbe

I am sincerely trying to understand this credit thing. I filed chapter 7 and discharged in 2012. I have two cc *Cap 1: 300cl each. One credit account with Fingerhut: 400cl just increased from 200   I have some accounts in collections that I am currently working on now that my income is higher. 

I really think my patience level has a lot to do with it, I want everything now and I realize that isnt going to happen w/o learning the lesson first. 

My goal for the next 6 months is to add a revolving loan with my bank and a credit card (Citi). I am about to pay off my car so I wont have to worry about a loan anymore and latter in 2015 start attacking my S/L debt. 

So, if some one can give me advice on the following: 

• What can I do for a significant point increase of any sort? 
• Do I really have to wait 2 years to see a significant difference in my overall score?
• Why is it when I pull my score its different than when its pulled from a lender? 
• Can there really be a significant increase in 6 to 8 months?

Any information you can provide will be very helpful! 

Thanks!!

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You've gotten excellent answers to your questions, but I would like to add another facet here. Do not neglect your 'third leg' of the financial health stool! The first leg is developing a good income, the second leg is developing good credit, and the third leg is having resouces for emergencies. First, you should have a $1000 emergency fund. This can be kept in your checking account. Second is saving up 6 months of net income in a protected savings account. Third is to work on building 2-3 years of net income in an easily "liquidated" investment account - I.E, NOT an IRA/401K or other designated retirement account.  Maintaining these things will be crucial to preventing defaults from occurring in the future when the next emergency hits. 

[Inquisitiveone]

Great information! I will be looking in to doing that immediately. As of now, I am working on my $1000 in savings with a Barclays account. I am thinking of either getting a CD or setting up another savings like the Barclays one. Or just putting it all in there. 

[Anonymous]

I would suggest maintaining a $1000 'hard floor' in your checking account. That will help build discipline.

[Inquisitiveone]

Omgosh!!! Thank you so much!!!!