Just Starting to Rebuild - Help with Starter Advise

[Anonymous]

Hi, I am hoping to rebuild my credit to the point that I can get an approved VA loan in the next 12 months.  It was recommended that I come to this helpful forum, post all my baddies, and get advice on where to start.  My income and DTI are not a problem, but my credit report and scores are a definite problem.  I would be extremely grateful to anybody who has tips on what I should start with!

The good:

NFCU - Credit Card - No lates, 7 year history, 13K owed on 14K limit, 15% interest

NFCU - Van Loan - No lates, opened 5/15, balance 14K, 12% interest

Capital One - Unsecured card - just opened, $300 limit, $0 balance, 25% interest

The Bad - Collections: 

Medical (Ortho Virginia handed off to American Collections)

OWED: $682, DOFD: 8/13 

Date of removal: 7/2020

Medical - Suburban Credit Corporation

$614, DOFD 7/13 (don't believe that date is correct)

Medical - Suburban Credit Corporation

$620, DOFD 7/13 (don't believe that date is correct)

Medical Suburban Credit Corporation

$230, DOFD: 1/11

Music and Arts Centers (handed off to Transworld Systems),

$1,467, DOFD: 2/13

Date of removal: 1/2020

Kohls/Capital One

Charge-off, $284,

DOFD: 11/12 - Reported -5/13

Date of Removal: 10/2019

Verizon, $518,  

DOFD: 11/14

Open Date 9/10, Last reported 5/17 

Date of Removal: 10/2021

Current FICO scores:

EQ: 608, TU: 594, EX: 612

FICO Mortgage Scores:

EQ: 597, TU: 617, EX: 637

[medicgrrl]

How many open credit cards do you have? A minimum of 3 is ideal with only 1 reporting a small balance. The balance with NFCU is hurting your scores a lot. How much will you be able to pay that down in the next 12 months?

Are the dates on the collection the opening date or the date of first delinquency? If you haven't already, pull your free credit reports from annualcreditreport.com. This will show the DOFD. Verizon appears it will fall off in the next couple of months so I wouldn't worry about that one. The Kohl's CO I would get paid off. After you determine the DOFD on the collections, post those dates.

[Anonymous]

Hi, thank you for the tip.  I downloaded my annual credit report and there was a lot more information in that report.

For some of the DOFD's reported, there is NO WAY they are accurate.  Wouldn't the medical ones be the day the service was provided?  I haven't had any late medical charges since 2012.  And the Verizon can't possibly be accurate, I didn't have a phone 2013-16.

I only have the 1 credit card.  Should I open 2 more?  

I plan to pay off 75% of the NFCU credit card before applying for a mortgage.  I know that will raise my rates substantionaly, I'm just concerned with what negative things on my report will keep me from getting the mortgage outright.  I only need a 620 score to qualify with my VA mortgage.  Curious how many of these baddies I should be nervous enough to start sending letters?

FYI, I'm in a state with a 6 year SOL.

[Anonymous]

YAY, based on Credit Karma recommendation I applied for, and approved for, a Capital One Platinum card with 300 limit.  

Pay for gas and such with it and pay it off every month should help my credit.

Question - is that enough?  That puts me at 2 revolving accounts and 1 auto account.  I have 2 closed (paid in full) auto accounts, but no other revolving.  

If I need a 3rd credit card, should I do it now or wait a certain amount of time?

[medicgrrl]

I just want to make sure you're looking at the correct date... you're not using the "open" date, correct? Do your reports state these accounts will remain on file until 2020?

[Anonymous]

Hi, I only pulled the Equifax as it has all the information in it.  I thought I'd pull a different one in 3-4 months.  EQ doesn't have the date it should be removed, but clearly states "Date of First Delinquency " which I updated above. 

I might just be remembering wrong...I need to go look through records.  

I'm still wondering, for a mortgage with VA, do I need to worry about these baddies, or only improve my scores?

[Anonymous]

I'd get that credit card paid down to under 10 percent first. And since you got approved for a Cap One card only have a balance on one card at a time and under 10%. And in the future when applying for another card if you decide to and I'd recommend, don't go by what Credit Karma (CK) says with your approval odds. Go straight to the card you're interested in and do a pre qualify through their site. It's more accurate but doesn't mean you will get it. Gotta remember that but it's more accurate.

In the past CK said I had very good approval odds for an American Express (AMEX) card. I applied and got turned down. Nothing worse than taking a hard pull hit and not getting the card. So out of curiousity after that I went to the AMEX pre qualify site (Google it) and tried and it said they had no cards to offer me. I learned from that.