Just Started My Journey and Need Help

Anonymous · ‎10-11-2015

I'm new to the site but I've been reading and researching a ton. My husband finally got a well paying, stable career and I'm obsessing over fixing our credit so that we're ready to buy a home this Summer. We need to get a home this summer. It means everything to me. I literally open my eyes every morning and log in to credit check total lol.

Current Situation

First Logged in September 16th

It was awful! 125% utilization, 8 lates, 3 judgements scores

EX 533, TU 528, EQ 526

Car Loan since 2012 No Lates Perfect

Capital One $300 CL No Lates

Credit One $300 CL

Webbank Installment Paid

Webbank Installment $97 Balance

First Premiere Secured $300

Applied Bank Secured $300

3 collection accounts all under $500

3 judgements

I paid all cards down to 15% but currently it's only showing 45% usage because they havent all updated.

Current Scores only showing at 45% usage

EX 572, TU 555, EQ 552

I've paid down all credit cards to be at 15% utilization. I've read that I should pay them down to between 5-10% and have 1/2 at $0. If so, I plan to do that this week. I plan on sending out money to up the limits of the secured cards this month. I sent goodwill letters to all lates and pfd letters to the collections. One judgement falls off this March- it's a car repo from almost 7 years ago. The other two were through a business I owned- a corporation, and therefore, shouldn't be on my report at all. So I plan to get a lawyer to remove them. Also, I'm paying off my truck early. It will be paid off by January. Any other suggestions? Can doing too much too quick have a negative effect? I have money to spend on my credit I just need it to be low 700's by May. Does that seem like a possibilty? Do you think having such low limits on credit cards effects my scores as well. I've seen lots of people with overall 80,000 in CL. Is that an important factor? Should I open new cards or will that hurt my over age of credit. Thank You so so much!!!

Thank You for any tips or advice!!!!

Sincerely,

Stay at Home Mom of three under 6

who is living in a one bedroom,

trying to save $50,000,

and have a 700 credit score by May

so we can buy a home

Anonymous · ‎10-11-2015

@Anonymous wrote:
I'm new to the site but I've been reading and researching a ton. My husband finally got a well paying, stable career and I'm obsessing over fixing our credit so that we're ready to buy a home this Summer. We need to get a home this summer. It means everything to me. I literally open my eyes every morning and log in to credit check total lol.

Current Situation
First Logged in September 16th

It was awful! 125% utilization, 8 lates, 3 judgements scores
EX 533, TU 528, EQ 526

Car Loan since 2012 No Lates Perfect
Capital One $300 CL No Lates
Credit One $300 CL
Webbank Installment Paid
Webbank Installment Paid
Webbank Installment $97 Balance
First Premiere Secured $300
Applied Bank Secured $300
3 collection accounts all under $500
3 judgements

I paid all cards down to 15% but currently it's only showing 45% usage because they havent all updated.

Current Scores only showing at 45% usage
EX 572, TU 555, EQ 552

I've paid down all credit cards to be at 15% utilization. I've read that I should pay them down to between 5-10% and have 1/2 at $0. If so, I plan to do that this week. I plan on sending out money to up the limits of the secured cards this month. I sent goodwill letters to all lates and pfd letters to the collections. One judgement falls off this March- it's a car repo from almost 7 years ago. The other two were through a business I owned- a corporation, and therefore, shouldn't be on my report at all. So I plan to get a lawyer to remove them. Also, I'm paying off my truck early. It will be paid off by January. Any other suggestions? Can doing too much too quick have a negative effect? I have money to spend on my credit I just need it to be low 700's by May. Does that seem like a possibilty? Do you think having such low limits on credit cards effects my scores as well. I've seen lots of people with overall 80,000 in CL. Is that an important factor? Should I open new cards or will that hurt my over age of credit. Thank You so so much!!!

Thank You for any tips or advice!!!!

Sincerely,

Stay at Home Mom of three under 6
who is living in a one bedroom,
trying to save $50,000,
and have a 700 credit score by May
so we can buy a home

To peak your scores pay all CC to $0 except for one. Let that one carry less than 10% of its limit. If you've had the Capital One card for a few months, apply for a second one. Be sure to request CLI's on the frequently.

Before you pay the truck off, set up a share secured loan for $500 with SDFCU. They will go 36 months at 3.99%, making the payments a little less than 15 per month. That will keep your scores from dropping when you pay off the vehicle loan.

Low 700's by may might not be an achievable goal without getting a lot of negatives removed.

Card limits do not directly affect scoring, only indirectly through the UTI% portion of your scores.

Age of credit is not really a worry at this point as you are trying to rebuild. You will eventually want to replace those predator cards (Credit One and First Premier) with better cards as you progress (the sooner the better, IMO).

How long ago did the late payments occur and how bad?

Anonymous · ‎10-11-2015

Welcome to the myFico forums!

In addition to NormanFH's great advice, I'd like to also suggest:

I would suggest holding off on adding to the CLs of the secured cards and using that money to pay off the collections, hopefully, with PFD.

I'm not clear on what the advantage would be to pay off the truck early. Unless the interest is really high, it might be better to just let it run its course, unless you need to improve DTI for the upcoming mortgage app? Having an installment loan satisfies the credit mix portion of the Fico scoring model, which is why it was recommended to open a secured loan with SDFCU after paying off the truck.

And if you can get CLIs on the Cap1 CC, that would help your UTI. I dont think Credit One gives CLIs by request, but maybe.

I echo what was suggested about getting rid of Credit One when things are looking better. They are very predatory. I would suggest keeping them open for a year to keep up appearances, but soon after that, close them if you have better ones. I believe mortgage UWs like to see accounts open for at least a year.

Keep in mind that UTI is 30% and Credit History is 35% and Credit Mix is 10%. You can change the UTI quickly and only the newest calculation counts, there is no memory of previous months.

HTH and GL

Anonymous · ‎10-11-2015

@Anonymous wrote:
Welcome to the myFico forums!

In addition to NormanFH's great advice, I'd like to also suggest:

I would suggest holding off on adding to the CLs of the secured cards and using that money to pay off the collections, hopefully, with PFD.

I'm not clear on what the advantage would be to pay off the truck early. Unless the interest is really high, it might be better to just let it run its course, unless you need to improve DTI for the upcoming mortgage app? Having an installment loan satisfies the credit mix portion of the Fico scoring model, which is why it was recommended to open a secured loan with SDFCU after paying off the truck.

And if you can get CLIs on the Cap1 CC, that would help your UTI. I dont think Credit One gives CLIs by request, but maybe.

I echo what was suggested about getting rid of Credit One when things are looking better. They are very predatory. I would suggest keeping them open for a year to keep up appearances, but soon after that, close them if you have better ones. I believe mortgage UWs like to see accounts open for at least a year.

Keep in mind that UTI is 30% and Credit History is 35% and Credit Mix is 10%. You can change the UTI quickly and only the newest calculation counts, there is no memory of previous months.

HTH and GL

Nice catch! I totally missed that completely.

FWIW, paying off debt early is almost always a good idea, from a financial perspective, particularly if one is going to be apping for a mortgage soon.

Anonymous · ‎10-12-2015

3 collection accounts.

Depends how old they are. If out of SoL...

Send Validation letters unless they are at or over 6 yrs old. Then, attempt for EE.

Said you're trying for PFD. Also check for inaccuracies, and what type of collector they are, some Utility companies can be paid in full to the OC, then the CA TL is obsolete.

Anonymous · ‎10-13-2015

Thanks for all the advice. I know paying off the truck early isn't helpful credit wise but I want as little debt as possible when we do apply for the mortgage. I paid all credit cards to $0 except the one which I left at $15. Now just to wait until they report. All collections have been sent pfd. Has anyone ever received a letter agreeing? Just wondering if I should pay them and then ask. All lates have been sent good will letters. Now just to wait for results. I have my fingers crossed that at least someone agrees on the first round. But I know persistence is key lol. Will paying the car off have a huge negative impact? I only owe 6,000. The loan is over September of 2016. So I'm just paying off by January in hopes it will help my mortgage approval in May if we're good to go. The interest rate is also awhile 24.96% so I'm also saving money by paying it off. Thanks again guys!

Anonymous · ‎10-13-2015

Paying off the car has different results for different folks. I paid mine off last year and didnt see any change in scoring. Some people say they lose 10-15 points. Never pay a collection you want deleted without a written agreement. When you pay it, they may just update the status to "paid". Some people have reported that when this has happened to them, they lose points since the old collection updates. You should pay off the vehicle ASAP if you have the means to. No sense in paying extra money for it if you can avoid it, and having that off your report will help your DTI. I've had a car with that interest rate. The second I had the money to pay it off, I didn't hesitate to get that title and end that relationship lol

Anonymous · ‎10-13-2015

OT: One bedroom with a family of 5, sounds like NYC. Kudos to you and your sanity.

Anonymous · ‎10-13-2015

Yes very true! My relationship with the car loan place sucks lmao. Hopefully I have the SAMs result as you.

My sanity is tested everyday 😉. I'm hanging in there. I really want this. I have a little calendar to help me get through the days. I'm praying it's only 260 more lol.

Anonymous · ‎10-13-2015

Same* auto correct is crazy