Rebuilding Your Credit

[tatonka20]

Hello ladies and gentlemen,

I am a 30 year old married male with 3 kids. We are looking to buy our first house. I pulled our credit reports from MyFico. My wife's scores are 618 and 623. She currently does not have steady income. She is a substitue teacher looking for her first teaching position.

For me I have worked in the same job for 6 years and have also started a side business that is making fairly decent money. This unfortunately can't be used for income but will help pay the down payment.

Anyways, my TU score is 593 and my EQ is pulling a 700 error.

Here is my stats:

No accounts past due

Credit History 9 years

Accounts with Negs 8

Revolving Accounts $2749

Installment Loans $27,053

Collections: 9

Public Records:1

The public records is an issue I have no idea what to do about. My family was in a bad accident and my son had to be life flighted to a hospital. The life flight company of course billed me and I in turn pushed the bill to the insurance agency. Because if had to deal with a minor things didn't move quickly, as they shouldn't, so the lifeflight sent me to court. My insurance finally paid for it, but after the judgement was processed. So now it is on my record.

The collections are all mostly for medical related including some from said accident above, but one in particular is showing a balance owed to Ebay for something that should be pretty close to 7 years old, but the account keeps switching companies and showing a newer date like it is new.

I am sure I don't have everything here you guys need, so please let me know what you need to see and I will get the info.

Goal 1: Is to pay down my credit cards.  I will do this this month so they will be clear of balances.

[jordanmedical]

I'll PM you the HIPAA stuff that was sent to me.

I would definitely try Gwing that Public Record, explaining the situation. I've seen other people here GW and have judgements removed, especially paid ones.

For FHa, In July there is a change that requires judgements to be paid but it doesn't say having one will make you ineligible. Check out the Mortgage forum on here, very helpful.

[tatonka20]

My EQ score is in at 589 - Here is all my accounts. Any help on what I can do to help improve my score?

US Dept of Education - Last Activity 2006 Closed Account/Refinanced -

30 days late60 days late90+ days late

0 times

1 time (May 2006)

1 time (Jun 2006)

Capital One  - Paid/Charge Off October 2010 Current Status - Bad Debt/Collection

30 days late60 days late90+ days late

3 times (Oct 2008)

2 times (Mar 2009, Nov 2008)

7 times (Jul 2009, Jun 2009, May 2009, Apr 2009, Feb 2009, Jan 2009, Dec 2008)

HSBC Bank - Closed/Paid $0 Balance - Last Updated Feb 2010

30 days late60 days late90+ days late

5 times (Sep 2009, May 2009, Nov 2008, Jun 2008)

3 times (Oct 2009, Jan 2009, Dec 2008)

2 times (Dec 2009, Nov 2009)

Les Scwab -CL $225 Bal $200 ( Just paid off - not reported yet) No Negs

Capital One - Doesn't Show CL  Bal $702

Seven year payment history30 days late60 days late90+ days late

3 times

4 times (Nov 2009, Oct 2009)

1 time (Dec 2009)

Credit One Bank - CL $600  Bal $470

Seven year payment history30 days late60 days late90+ days late

2 times (Dec 2008)

2 times (Jan 2009, Nov 2008)

0 times

First Premier - CL $250 Bal $193 (Just paid off - not reported yet)

30 days late60 days late90+ days late

4 times (Dec 2009, Nov 2009)

1 time (Sep 2008)

0 times

Target - CL $200 Bal $164 ( paid off $100 - not reported yet)

30 days late60 days late90+ days late

1 time (Dec 2010)

0 times

0 times

[tatonka20]

Collections on my report :

Collection on debt to:

The collection agency "180YC00000" was hired to collect a debt of $3,940 on account number "XXXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

180YC00000

$3,940

$0

May, 2010

XXXXXXXX

Individual

Consumer disputes this account information Medical

Collection on debt to:

The collection agency "139YA00000" was hired to collect a debt of $199 on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

139YA00000

$199

$11

Nov, 2010

XXXXXXX

Co-maker

Consumer disputes this account information Medical

Collection on debt to:

The collection agency "139YA00000" was hired to collect a debt of $76 on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

139YA00000

$76

$11

Oct, 2010

XXXXXXX

Co-maker

Consumer disputes this account information Medical

Collection on debt to:

The collection agency "139YA00000" was hired to collect a debt of $91 on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

139YA00000

$91

$91

Oct, 2010

XXXXXXX

Co-maker

Consumer disputes this account information Medical

Collection on debt to:

The collection agency "133YA00000" was hired to collect a debt of $1,131 on account number "XXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

133YA00000

$1,131

$0

Jan, 2010

XXXXXX

Shared

Medical

Collection on debt to:

The collection agency "139YA00000" was hired to collect a debt of $28 on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

139YA00000

$28

$0

May, 2009

XXXXXXX

Co-maker

Medical

Collection on debt to:

The collection agency "139YA00000" was hired to collect a debt of $64 on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

139YA00000

$64

$0

May, 2009

XXXXXXX

Co-maker

Medical

Collection on debt to:

The collection agency "139YA00000" was hired to collect a debt of $119 on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

139YA00000

$119

$0

May, 2009

XXXXXXX

Co-maker

Medical

[rckstrscott]

---

tatonka20 wrote:

My EQ score is in at 589 - Here is all my accounts. Any help on what I can do to help improve my score?

---

Couple things

1. You side income will not be able to be used for a downpayment. All downpayment funds have to have a paper trail. If the side business is not above the table, then you cannot use any fruits of it for the home purchase. In fact, it should be in an account you do not disclose to the lender because they WILL ask you about it, require documentation, ect. Its just cleaner to keep it seperate (source: myself, and my side business, closed on a mortgage May 25tth) -- you should be focusing all your payroll income into the house, and all the side income into paying down your credit cards and collection accounts.

2. The judgment will have to be paid, there is no way around that really. It CAN be paid, and showing, and as long as you credit scores are high enough, it wil be fine with a letter of explanation.

3. The rules for collections change in July (supposed to in March, but it got pushed) so those medical collections will now have to be paid, as before they didn't have to be.

4. You can start to GW your lates away if you'd like to attempt the score increase, but they are old enough so they won't impact your approval.

The gist of it is: no new negative information in the last year, no new collections in the last year, all showing collctions, judgements, tax liens have to be paid.

Most lenders want 640 now, some will do 620 although FHA only requires 580, but most lenders will require more stringent down payments ect ect...

Don't be discouraged tho. My score was worse than yours, I had 19 collections, 2 judgments, and a tax lien, with no positive accounts in Nov 2010 and I closed on a house last month, with 700s across the board.

Really focus on your repair tho. How soon were you looking to purchase?

-scott

[tatonka20]

Scott - Thanks! The Judgment is paid. It was paid right away by the insurance company. So that helps. About the side business- what if it is up and up. It is a company I own and report. It is not hidden income.

The collections are all paid as well though a couple show $11 balances for some reason.

I need to figure ways to improve my score. I want to buy as soon as we can. But at the very least 2 years from September. I am sure my credit will be good then. But I was thinking it shouldn't be too hard to get my scores in the 620-640.

[rckstrscott]

---

tatonka20 wrote:

Scott - Thanks! The Judgment is paid. It was paid right away by the insurance company. So that helps. About the side business- what if it is up and up. It is a company I own and report. It is not hidden income.

The collections are all paid as well though a couple show $11 balances for some reason.

I need to figure ways to improve my score. I want to buy as soon as we can. But at the very least 2 years from September. I am sure my credit will be good then. But I was thinking it shouldn't be too hard to get my scores in the 620-640.

---

Man, you are pretty close then..

Well, you can always send some HIPAA letters to attempt to remove the collections... if not, GW letters.. although you will have to remove many in order to get much score boost.. Many people had look with HIPAA on paid collections, but its not something that we can talk about on this forum..

If the judgment is paid, I don't think you can vacate through the courts..  but if the insurance paid it, was it paid prior to the judgement? I had a judgment on file for an eviction that never happened, I disputed as 'paid before judgement' and it was removed..

If the business is on the up and up, clearly you can use the income.. The only catch is, if you show losses on your schedule B, then you will have to report those losses and that will actually ding you income, so it may not benefit you depending on what is actually shown on your taxes as income for the side business..

What is your credit card utilization percentage right now?

[tatonka20]

We right now it is reporting a 81% utilization but it is really a 60%

[rckstrscott]

---

tatonka20 wrote:

We right now it is reporting a 81% utilization but it is really a 60%

---

There is your beast... pay that down, and your score should easily hit the threshold need in my opinion, esp if you have 3ish open accounts or more..

I went from 85 percent util to 9 percent (paid down like, over 5k) and my scores went up from 612 to 680 in a month. Some people get less, but that clearly is your next move. I don't think its even a question..

Plus, the less payments, the less they factor into your DTI.. they don't factor total debt for FHA, they factor payments.. so if you had 10k in debt, on 7 cards and your payments were 500 for the those cards, thats what they would factor... if you had 10k in debt, on one card and 0 balances on others, and yer payment was 300, thats what they would use...

I would pay all cards to 0 if possible, and leave a balance of sub 10 percent on the last card. That should get you the points... in my opinion at least..

-scott