Need Help Improving Credit

[Anonymous]

Hey Everyone,

I've been coming to this site for just a few days and it has already proved to be extremely useful!  I need to get my credit in shape ASAP.  I've had quite a few bad problems on it over the years but it was purely because I was in college and just about every dime I made went toward living expenses, so when something not expected came up I couldnt afford it.  Anyways, below is information on what is currently on my credit.  I was hoping you guys could help me figure out what is best to take care of next to get my credit up.  I think my scores are something around 595, 615, and 625 ( i don't remember the order though).

I'm hoping to buy a house in a couple months and don't want to pay an insane interest rate if I don't have to.  I currently have about $20,000 saved.  I make about $52,000 a year and my wife makes about $38,000 a year, so a total household income about $90,000.  Again, any help you guys can give would be fantastic!!!  :-)

Thank you in advance for the help everyone.  This site has been GREAT!

[llecs]

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

Outside of the above, I also suggest pulling your two FICO reports. Your FICO report will show a column on the Accounts page that indicated if FICO sees the account as a negative or positive. Also on pages 2&3 of the report, it'll give a ranking of items that hurt the most to items that hurt the least. If a higher score is the goal, then definitely use those as a guide. Also, pull your free reports from annualcreditreport.com if you haven't done so. Those reports contain detailed info you cannot find elsewhere and are important in the repair process.

In short, send GW letters to any paid baddies. If the TL is closed, be mindful that they could delete after a GW request. Keep your AAoA in mind.

For any unpaid COs, send a PFD. If after  a few months and a few attempts the answer is always "No", then PIF then GW later.

For any unpaid CAs, send a DV. If they verify and you agree, then send a PFD.

For any paid CAs, send a GW asking for deletion.

Finally, keep SOL in mind. SOL is the time frame a creditor has to sue you for an unapid debt. Make sure you have 100% of the $$$$ saved before sending any letter to any baddie unpaid creditor. Collection activity does increase during this process and you wouldn't want to be sued when in the process of negotiating with them.

[Anonymous]

Everything on my credit is paid.  I use my credit cards VERY VERY little (I try to put a few $'s a month and then pay them), I don't owe on my collection accounts anymore.

I did buy a car about a month and a half ago, $17500 was financed and I already made a payment of $500 ($150 more than the minimum payment) and I intend to send another $500 payment in a week or two. This loan is not yet showing on my credit but I NEEDED a car.  :-(

Anyways, would it be smarter for me to make payments $150 extra toward my car payment each month or toward my student loans that aren't required yet?

Thank again! 

[llecs]

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@Anonymous wrote:

Everything on my credit is paid.  I use my credit cards VERY VERY little (I try to put a few $'s a month and then pay them), I don't owe on my collection accounts anymore.

I did buy a car about a month and a half ago, $17500 was financed and I already made a payment of $500 ($150 more than the minimum payment) and I intend to send another $500 payment in a week or two. This loan is not yet showing on my credit but I NEEDED a car.  :-(

Anyways, would it be smarter for me to make payments $150 extra toward my car payment each month or toward my student loans that aren't required yet?

Thank again! 

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Unfortunately (or fortunately depending on how you look at it), paying a collection will never help your FICO. It doesn't matter if you owe $0 or $10,000, the damage to your FICO is equal. I'd send a GW if paid asking for deletion.

You might see a ding when the car reports, but you'll fully rebound inside a year I bet. The balance on the loan doesn't matter much either. FICO largely ignores balances on loans, otherwise everyone would take long-term hit for adding something like a car or mortgage.

When paying loans, IMO, pay the higher interest first. If the balance is creeping down and within range to pay off, then certainly do that regardless of interest.