Is 6 months unrealistic

[julieray419]

Hi Everyone,

I finally bounced back from the depths of recession and got a stable job to be able to pay my debts. Here is the question/goal at hand.

I have had almost everything except my credit cards, student loans, and installment loans get charged off due to unemployment and hardship due to a divorce proceeding that ended in reconciliation.

Long story short, my credit cards are paid on time but are at high balances, my student loans are on deferement, my installment loans have had several lates over the past 2 years but have payments at least every two months until recently.

Currently with my new salary I have $1,200 in discretionary funds every month left over . FINALLY I am in the position to pay off the installment loans in about 3 months, credit cards the same. How do I handle my charge offs? I would like to see my score bounce back and be able to buy a house next summer. We were referred to a credit fixer by my credit union, but there is nothing to fix, it is all legitamate stuff.

I am honestly seeking your advice on how to maintain a score increase if I will no longer have any open debt. I am in a hurry to pay my installment loans because I have 13 actual months left, but contractually, I should have them paid off by Feb 2011.  Hub and I are dangling at low 400s.

[pritchardhallhokie]

Hi,

Well, you definitely have your work cut out for you if your goal is to go from the low 400s to buying a house in around 6 months.  You're probably looking at at least a 200 point jump in that time.  I'm not saying it can't be done, but you'll have to work hard!

My advice to you is to go ahead and air out your dirty laundry here and let everyone take a look at what you have questions on.  For example, you say all of your debt is legit, but, could you possibly do a PFD for any of it?  You also said your cards are maxed out.  What is the uti %?  That is a huge factor in increasing scores.  I'd be more specific with your questions, don't say what you have in a broad stroke, rather, ask specific questions about individual baddies and how to go about getting them to report less negatively.

Good Luck!!  This forum is a wealth of knowledge!!

[JM-AM]

---

@pritchardhallhokie wrote:

Hi,

Well, you definitely have your work cut out for you if your goal is to go from the low 400s to buying a house in around 6 months.  You're probably looking at at least a 200 point jump in that time.  I'm not saying it can't be done, but you'll have to work hard!

My advice to you is to go ahead and air out your dirty laundry here and let everyone take a look at what you have questions on.  For example, you say all of your debt is legit, but, could you possibly do a PFD for any of it?  You also said your cards are maxed out.  What is the uti %?  That is a huge factor in increasing scores.  I'd be more specific with your questions, don't say what you have in a broad stroke, rather, ask specific questions about individual baddies and how to go about getting them to report less negatively.

Good Luck!!  This forum is a wealth of knowledge!!

---

+1

Keep in mind most of us have been in bad situations at one time or another and we do not judge anyone nor do we need explanations as to why you are in this position. 

I little break down of what is showing on your reports would help tremendously for others to assist you.

Where did you get your scores from?

A break down of each account?

Example;  Creditor/Lender - - - Credit Limit - - - Balance - - - Open/Closed - - - Charge-Off - - - Collection - - - Judgement

IMO the biggest thing I see from what you have stated so far for score increase would be paying down your UTIL. You say that they are at high balances and for best results they should be at or below <9%. The late reporting from installment loan is also having an impact and while you mention it has been late on several occasions you haven't mentioned if they are 30, 60, 90, etc... days lates and how recent they are. 

[RobertEG]

Prior derogs should be, in my opinion, your primary focus.

% util is almost as important, but % util has no historical memory, and can be improved directly, and monthly once payment history is under control.

However, prior derogs both count more, and cant be dealt with wthout a plan.

I suggest that you put together, on one sheet of paper, the basic information needed to address your credit score repair plan.  Don’t focus, for FICO reasons, on accounts.   Focus on  individual derogs.

First, go to annualcreditreport.com, and get your free annual CR from each CRA.  This report is far superior to any CR you can buy through any commercial vendor.  Free.  Just don’t buy scores on the site.

 I would then  first focus ONLY on your original credtior (OC) accounts.
Under each OC account, list each and every delinquency in your CR by date (e.g., 30/60/90+ ;lates, and any CO)
Underline the first late.  That is, in most cases,  your DOFD for fhat account.

 Then turn to collections and charge offs.  For each CA or CO, just locate the related DOFD on the OC account that led to the collection or charge-off..

 Finally, know your state statute of limitations on each account.

 With all of that in hand, you then know, one page,  when each derog is scheduled to drop from your CR due to its own age, without any action on your part (i.e., 7 years for each monthly delinquency on an OC account, and 7 1/2 years from DOFD on the OC account for each CO or CA).

Accounts still within SOL requrie particular attention, as they could result in legal action.

For accounts with unpaid debt, you have four basic options.  If outside of SOL, and you can wait tor their derogs to drop from their CR, you can choose to do nothing.  If you want eariler deltion, you can PFD them.

If still within SOL, take heed!  Those are the accounts that need immediate attention.  You can just pay in full.  That stops the possibility of legal action, but does no result in any deletion of anything they have reported to your CR.  Or you couild offer a PFD.  But that does not do anything, should they either decline, or choose to not evern respond.  IT is a gamble with a potential of CR deletion, but with the risk that they may escalate their actions.  Yuu take your chances.

For accounts that have been paid, you can send then good-will pleas for deletion.

I know that is a lot of work, but that is the information you need.  Until you can erase multiple and/or major derogs from your CR, any substantilal FICO score improvement is probably unlikely.

Earlier payment  off installment loans would be at the bottom of my payment priority list.  Second lowest would be use of funds to pay down % util on acconts in good standing.  I would look at using those $$ to get PFDs.

[mauve]

Also, when was your last late, period?  They'll want to see a clean history for at least a year if not (more likely) two to give you a loan.