11-05-2010 06:14 PM - edited 11-05-2010 06:17 PM
New to the board and newly committed to rebuilding my credit.
I have several credit issues I am on track to resolving. The major ones have been student loans. I recently got all of my loans back on a current payment status.
I have 3 collection accounts totaling about $200. I plan on paying these off.
What kind of score increase can I reasonably expect between now and January? Assuming I pay off the collection accounts and keep the student loans current?
I have been reading the boards and noticed that 620 seems to be the lowest score to secure a mortgage. I don't have any open credit cards, auto loans, or store cards. (I can't get approved for any)
Experian - 575
Transunion - 587
Equifax - 579
11-05-2010 08:13 PM
You need to take the idea of getting a mortgage out of the equation for now.
First you need to start fixing up all the negative information.
1 Collections that are not paid as of yet: If you have the money make an offer to PFD. If they agree you must get it in writing.
2 Collections that have been paid already: Try and GW them and ask for removal.
3 Late payments will stay on your record for 7 years since: Try and GW them, but being school loans may not be so easy.
You need to keep all your payments on track. No more late payments.
Try and get a secured card for a CC. You will need to put your money up for this usually a minimum of $200. You can search the boards here for secured cards and decide which one you would like to apply for.
Obtaining a mortgage would entail having 24 months of clean history. No unpaid collections. No BK. There are still a few lenders approving people with a 620 FICO score, but very few. The goal now is more in the range of 640 FICO score.
Paying off a collection will not change your scores any. If you and CA come to an agreement to PFD, that will give you a score boost.
Keep in mind that rebuilding your credit does not happen over night.
11-05-2010 09:54 PM
YOur current actions in getting back on track with payment of your current debts is commendable. It might forgo any future damage to your credit score, such as the posting of a charge-off, collection, or legal action. So that is the right path to take.
Be carful with those unpaid CAs. If not past SOL, they may hit you with legal action.
But, as has been said, being current, or even paying off, debt, does not erase the prior delinquency history in your CR. And that is what FICO scores.
You are on the right path for score rebuilding, but I dont see any significant score improvements in the next several months.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.