Lates vs Payment History

[OmmeggaTX]

Long story short, after being laid off for 9 months I finally got a decent job and started fixing credit and paying my bills.

What I'm left is 3 collections (Not planning to pay. 1 is Firestone which charged me $1K and didn't fix anyhing in my car and the other is Wells Fargo Checking for Over Draft Fees) , 2 closed paid and 2 open paid accounts.  I have prerty short credit history of little bit over 2 years. Now, credit scores sit around 550. Utliziation is at 0% (still reporting 25%, waiting for update) . On time payments have started showing since December... I had many 90-120 day lates which I'm trying to remove but that is going to be hard. My question is, will the scores go up by the next 6 months of on time payments or these lates will be killing me for the next couple of years? I'm not talking about 700 scores, but at least low 600s. I'm planning to buy a car in the next couple of months, I have the down payment I have good job for almost 7 months and don't want to get co-signer.

[kjm79]

Congrats on the new job!

When working to raise your score, although counterintuitive, 0% util is bad.  You get points by actively using and managing credit.  That means you have to show usage and when accounts report zero, even if you did use that card, your reports don't reflect that.  Allow a small balance to report on one card each month (general consensus is between 1-9%).  Doing this should help raise your score some. 

30-day late payments generally have less of an impact on your scores at around the 2 year mark.  But the 90-120 are considered serious derogs and will have a greater impact for a much greater amount of time.  Definitely spend some time trying to goodwill the lates.

When you go to finance a car, the dealer/lender will most likely use auto-enhanced versions of your score, could be higher or lower than your FICO scores.  If you've been good with auto loans in the past, your scores should be a little higher.   

[RobertEG]

Making on-time payments is essentially an expectation, and score increases for maintaining an account in good-standing come primarily from the aging of both accounts and other derogs over time.  I would not expect substantial score improvement with major derogs still reporting based on paying as agreed on other existing accounts.

If the legitimacy of debts under collection is disputed, they need to be addressed either by the CRA/direct dispute process, or by independent legal action on your part.

A decision not to pay based on non-agreement with the debt is, of course, a personal decision.  If the debt is still within SOL, you may get the opportunity to argue your case in court.

[OmmeggaTX]

Thank you guys, I will make sure to keep util. around 2%. I never had a auto loan before. Is that a good or bad thing when they pull auto enhanced scores?

As far as GW letters. I recieved repsonce from Capital One (open account, no balance) they will not removes lates but gave me refund for 2 late fees totalling $70.