@cnmcalpi wrote:I am looking to improve my credit report and overall risk factor in order to purchase a home within a year or so. I have pulled my reports about 8 months ago and was sitting at about 620, with very little history. A few charge offs, cable company, a small $300 credit card while I was in college, and maybe some other small $100 thing all 3 years old or older. I have a $57500 student loan total that I have been making auto draft (on time, every time) payments on for about 6 months and a paypal credit card with a $550 limit that I have been buying stuff with and paying off, never late....actually normally charge on it and pay it off more than once a month. I have been rejected for a credit card that I can use in everyday life for things that I always budget for like gas and groceries that I can just make some payment adjustments and gain the credit history for doing pretty much the same thing that I am doing now. The reasons are, "insufficient number of accounts paid as agreed" - I assume the credit card default and the cable bill is this. "proportion of balances to limits is too high"- Is this the proportion of balances to limits only on revolving credit or is it based upon my installment(student) loan as well? I actually wasnt an idiot when I made the investment to go to the university for a degree, and got a specialized engineering degree. I have solid income ($63500 a year out of school) and plenty of room to increase my income. This being the case, I can easily pay down my credit card and hold a 5-10% balance on it carried each month ( can I charge more than 30% and pay it each month and keep the util to the balance carried over or is it trickier than that?) That paypal cards sole purpose is to gain history.
So, let's itemize the questions so they will be easily answered.
1. Is this the proportion of balances to limits only on revolving credit or is it based upon my installment(student) loan as well? If it doesnt say revolving its on installments. I know its nutty but its they way its interpreted its really just an added excuse and is never the real reason for the denial. The lack of open revolving cards and the COs are the real reasons for denial. Check into getting a secured CC, a good one is offered by State Dept FCU, to join the CU is a SP, and then if you have the funds in savings and you CALL them to open the secured card its my understanding thats a SP as well.
2. Can I charge more than 30% and pay it each month and keep the util to the balance carried over or is it trickier than that? You can use the full limit if you wish just be sure to have it at 0 if its not the card you are going to let report 1-9% of its individual CL. You can use it to the limit multi times in a month if you want as well, I used to shove 2500+ thru a 500 CL Cap-1 card.
3. How can I determine if I should pay off the charge offs on my file? The age of the CO and whether or not its past your states SOL will determine what your options are. Rushing in and paying them is not something one would do as a paid CO is no better than an unpaid CO.
I understand that it would be better to have them paid off, but maybe not if they are old because paying the accounts would bring them current and possibly hurt my score/file? Yup, you get the basic idea when it updates to paid off status or settled its going to knock your score if it has not already been updating monthly.
@cnmcalpi wrote:Gdale6,
Thank you for your time to respond.
I am going to research all of the abbreviations and things you have used throughout most of the post and respond thoroughly, but one immediate question.
You mentioned " its going to knock your score if it has not already been updating monthly."
What is this updating monthly?
-Nick
If the CA or OC is reporting it every month, you can find out by the date last reported that is listed on the TL in your CR.... it looks new to FICO and affects your score. What I was saying is if it has not updated recently when it does update to report changes its going to affect your FICO score in a negative way.
@cnmcalpi wrote:Gdale6,
So the SOL in my state is 3 years. How does this affect the CO's? The states SOL is a timetable in which the creditor can use the courts to enforce payment of a debt. What sets the SOL clock ticking is the DOFD (the first derog of 30 days that ends up with the account being COed)
Will they automatically not be counted in the scoring function or something? states SOL has nothing to do with scoring or reporting of an item on your CR but is what I described above.
I understand there is such thing as "pay for deletion". The ones, if any, that are under the SOL I should probably attempt to negotiate that right? Yes there is such a thing as PFD but its your last resort not your first. If you are going to deal with debts that are inside the SOL and you can still be sued for the first rule is never to contact them unless you have the full amount available to pay them off. Dealing with debts inside SOL sometimes results in unintended consequences (a lawsuit for full amount plus costs)..
My mother told me she is willing to help me get over this initial hurdle, she has excellent credit. She was willing to make me an AU on a 20+ year old credit card with a high limit and a 0 utilization but the bank that holds the card tells me that in spite of the FICO '08 rules that they do not report AU's. (When are the banks going to quit being such con artists?) Actually it was the crooks who defiled the AU system, there were companies selling AUs to the highest bidder, it always can be traced back to money & greed. AU was originally set up as a way for close family members to help each other out, never for profit mongers to be selling credit card AUs to the highest bidder.
She had originally offered to cosign a card for me, which I was trying to avoid because I did not want to be a risk to her so I liked the idea of the AU. Looks like we are going to have to do the cosign, which would probably be better than a prepaid because of fees and things from what I understand. A joint account would be good just use it sparingly and once you re establish credit on your own you can move to have her taken off the account or just close it. You could also consider a secured card on your own, States Dept FCU has a good program, its a SP to join the CU and if you put the funds in your savings account and then CALL them to open the secured card its also a SP.
What is a good card that has a good, solid reporting reputation that I can count on to make the reports each month on time and consistently? All banks & CUs would report a joint account to the CRAs just like an individual one would do. I am not really versed in whats available out there for this purpose (banks offering joint accounts) my expertise is in the repair end, you can start a thread in the Credit Forum and most likely get lots of info on this.
I wouldn't think with her as a cosigner that I will have much trouble getting a mid range card?? I would think it would not be a problem.