In Need of Serious Advice

[clockscredit]

Back in November I lost my job; like a lot of people, I was living an over extended lifestyle. I now have 2 30 day lates (cc's), 1 60 day late(installment), and a car loan that is reporting current, never have been 30 days late. I feel like all hope is lost, my util is at 99%, and I now have new negative marks. How long will it take me to recover from this? How long will this play into my score and affect credit giving decisions? My score has plummeted to the mid 500s. If I pay everything down to zero and sit on that for 6months, wil that make a difference? Should I get a secured card with a 2000-5000 cl and sit on that for some months?

Thank you guys in advance, you all are absolutely the best. 

[boomhower]

Depending on how recent the lates are I wouldn't be surprised to see a 100 point jump just by paying off the cards.  Pay them all off leave one card with a <9% balance for the highest score.  The lates will have an effect for seven years but it lessens with time.  The 30 day lates hurt a lot less after a year.  The 60 will hurt you a bit more.  If you have a good history with your lenders you can try sending a good will letter and see if they will remove the lates.  The jist of it is paying down you balances and time to distance the lates are what is going to bring your score up.  A year of timely payments and low balances should get you 650 at least.  I wouldn't open any new cards, the additional INQ and decrease in AAoA is just going to damage your score more. 

[clockscredit]

Thanks Boom!!!

[RobertEG]

+1

I may seem serious, but in the scheme of things, not that serious.

The delinquencies are minor, and yes will hurt for a bit, but within two years, most of their impact will be gone.

Util is something you can recover from, as scoring of % util is based only on current util.  The potential with continuing to carry high utils is that, as the balance is reduced, the lendor may also reduce your CL based on perceived risk from high prior util levels, thus keeping % util at a high value.  Getting util down as soon as pssible might help avod that possibility.

If you currently have multiple revolving, then apping for new credit cards while your score is down might not be the best path to take.  New inquiries and lower AAoA impacts might add to adverse currrent factors.

The key to seriousness is whether you need to app for new credit within the next year or so.  If not, then you can ride it out by the steps you have planned.

[electra]

I think you'll be able to recover pretty quickly.  Just work on paying down the balance and that should give you a big bump.  Start writing GW letters for the lates.