Little win.. Kinda, maybe sorta??

[Anonymous]

Hi all,

I just started preparing to work on rebuilding my credit.. My scores are humiliating, just over 400 and I have a goal to be at 640 and approved for a USDA mortgage in 2 years.. 18 months if I'm wishful thinking
.. I did have a 6 pt increase last night, not sure how, nothing has changed yet and I know its barely a drop in the bucket but ill take it..

So far I have...

*consolidated 8 severely defaulted student loans into 2 loans. Past due loans are not yet showing closed, and new payments don't begin until June. These are going to haunt me for a very long time. 100+ lates with fedloan servicing.. but hoping that keeping the new loans in good standing will help a bit.

*opened a self lender loan (realized after the fact that this was unnecessary with the new consolidation loans, but oh well. The forced savings won't hurt for the small cost.) This will report late june

*opened a cap 1 secured card with a $200 limit/$99 deposit. Card should be here in a week or so.. My plan is to not actually carry the card, just link it to my spotify or Netflix and PIF before statement close each month. After a month or 2 will do the same with the Discover IT secured card.

*opened a CS360 account to try and clean up some old collections.. Upon further research I'm kinda regretting this but may let it ride for a while and see what happens.

*entered in to a 6 mo payment agreement with RGS about a $925 closed TCF checking acct. I know I shouldn't have messed with payment arrangements but they have garnished my wages in the past and I can't afford a lump sum at the moment. I figure I'm gonna be in touch shape for a while so this is better than letting it sit and risking a judgement..

*the past tcf judgement I have got the plaintiffs attorney to agree to have deleted, still not reported.

*prior to CS360 I was planning to try some debt verifications and PFD'S. Hadnt pursued yet, but had sent a few emails to CA's just asking to confirm my account #s. Well today I got a letter from IC Systems for a $490 att uverse collection, stating with no explanation that they are no longer pursuing my debt and erasing their records from my credit reports, but that the debt is being returned to the original creditor. Should I reach out to Uverse directly about a PFD, or wait and see if it shows up on my report?

And finally, can anyone give me any insight in to their own journey from a score as low as mine. Is home ownership really a pipe dream from a 400 score?

[rmduhon]

If I Systems is returning the account to AT&T then pay AT&T before they re-assign the debt to another collection agency.

[Anonymous]

I'm still working on my credit but i'm almost there.  I started out at 408.  After a job loss.  It has taken me 2-3 years now and my middle mortgage fico score is 596.  Once i pay my credit card off next month that should shoot back up to around 640.  I just really started working on my credit around the end of 2015.  So it is def possible.  I still have a few collection accounts and one civil judgement that i'm paying off.  But the collections are a total of $1000.  I am not planning to pay those becuase they are past the statue of limitation.  I have 2 years of on time student loan payments and over 1 year of secured cap one card.  i was denied for a secured discover fyi.  I now have 4 credit cards (2 store), a car loan, and student loans reporting on time payments for 2 years.  

[Anonymous]

I got approved for the discover secured,  but i didnt realize you only had 2 weeks to fund the deposit, so im going to have to apply again which is a huge bummer. My score ended up going up 99 points when the consolidation reflected that the defaulted loans were paid off. Im sure once the new loans report it will drop back down with the increased debt, and then in time come back up as i establish a positive payment history. slow and steady wins the race i suppose. lol

[Brickbybrick]

Is it a hard pull for a discover secured card?

[Anonymous]

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@Anonymous wrote:

And finally, can anyone give me any insight in to their own journey from a score as low as mine. Is home ownership really a pipe dream from a 400 score?

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So ... briefly, my scores weren't in the low 400s, but were just under 500 when I started rebuilding in January of last year. 

I got organized, started working on taking care of baddies and building new credit (Cap 1 secured, Discover secured and an Overstock card were my three for a long time). By October of last year we started thinking about moving and buying a house ... when my credit was finally pulled in November I was above 640, was originally going for a USDA loan but ran into issues and ended up with an FHA, 30 years and 4.75. 

Closed on the house this past January, went on an app spree (Amazon store, WalMart and a second Cap 1 card (QS1) and Wayfair, saw a little dip in my scores with the Inq's and higher UTI, but with work and time, my EX score this morning was 655 (which is good considering I opened two AMEX cards this past month). 

It's not a pipe dream, but there will be issues (my mortgage process was hellish -- though not all of that falls on me), your interest rate will be higher (mine's not awful, but could be better) and you have got to do the work (getting organized, making EVERY payment, working on removing baddies off your reports). Read lots and lots here ... there's so much good and helpful information. It really is invaluable. 

Like anything worthwhile, it will require hard work. 

But if I can do it ... anyone can. 

Good luck! 

[Anonymous]

yep, it was on mine

[Anonymous]

Thank you! That makes me feel so much better!! My scores as of today are TU 453, EQ 568, EX 521 so im already in much better shape than i was 2 months ago when i started and my scores were 402 and 425. My secured cards and new positive loan payment history are not reporting and i so far have 2 of 5 collections removed. Your response gives me so much hope. Im really, really, really hoping i can make the USDA Guaranteed work because i will really struggle to save a down payment with my current rent and bills... but where there's a will theres a way, its good to at least know there is a light at the end of the tunnel!

[Anonymous]

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@Anonymous wrote:
Hi all,

<snip>

And finally, can anyone give me any insight in to their own journey from a score as low as mine. Is home ownership really a pipe dream from a 400 score?

---

Totally not a pipe dream.  You seem like you're doing all the right things.  

I had my ex break my credit pretty badly while I was deployed and when I got back and got the divorce I didn't really care about fixing it.  I went to school and concentrated on getting a career started up and I was still bitter so I had a "screw it, I'll just buy things I can afford with cash" for years.  I got a small auto loan in 2009 or 10, got a secured card in 2012 and started really watching my scores in 2013.

Checking my memory (gmail), looks like I had a 511 in 2013 with the auto loan paid off.  Secured card had me up to a 528 in Jun of 2014.  Started sorting out student loans and all the baddies in 2015 which got me to a 597 (these are all based on Credit Karma's old "You score sucks and we're emailing it to you" emails).  Had some CLIs on the secure card in 2015 and 2016 and regular payments on the school loans had me up into the low to medium 600s.  USAA offered me low interest on a new car, so I got that which seemed to push me above the mid-600s at the beginning of 2017.  Bought a house in May of this year.

I took a long time because I wasn't serious about it until late 2014/early 2015.  Once I got serious, it took about 2 years to get everything where I needed to be.  I also finally broke my "I don't want credit cards" mentality this year and applied for/approved for 3 cards in the last week because, now that I have a house, I apparently need to do all sorts of projects.  Sheesh.

Hope that helps!

[Anonymous]

Hello you said your score went up 99 points when the loan consolidation paid off your student loans. How far down did it go once the consolidation reported