Paid off everything but FICO still low!

[Anonymous]

Hello,

As many my husband and I have made huge credit mistakes.  We have spent the last 6 months paying off all the bad debt/collections and paid off all credit cards.  We had a Mervyn's (no lates paid off and closed), Firestone (paid off and they closed us--one 30 day 2 years ago) and Sam's Club credit (paid off--no lates and they state that we closed the account a year ago--but we did not).  We had roughly 1,000 in collection accounts and all were paid off. 

here is the issue.  As we paid all this off...my fico bounced up to 640 and my husband dropped too 535.  We don't know what else we can do.  We have NO debt. Except student loans which are currently defferred. 

I have tried to get a few small credit cards and have been turned down and we tried for a small signature loan and were turned down. 

What else can we do?  I don't want to do a secured credit card but will if I have too. 

Any helpful hints? 

[guiness56]

Welcome to the forums!

Unfortunately, paying off COs and collections usually has no impact on your score.  FICO looks at them in the same negative way.

Since they are paid, you can try to send Good Will letters to the account holders on your credit reports. You can search on here for samples and tailor it to your own situations. 

If a collection agency and the original creditor are both listed on the credit report, send them both GW letters.

Other than that there is not a lot you can do other than let them age off.

[BungalowMo]

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@Anonymous wrote:

Hello,

As many my husband and I have made huge credit mistakes.  We have spent the last 6 months paying off all the bad debt/collections and paid off all credit cards.  We had a Mervyn's (no lates paid off and closed), Firestone (paid off and they closed us--one 30 day 2 years ago) and Sam's Club credit (paid off--no lates and they state that we closed the account a year ago--but we did not).  We had roughly 1,000 in collection accounts and all were paid off. 

here is the issue.  As we paid all this off...my fico bounced up to 640 and my husband dropped too 535.  We don't know what else we can do.  We have NO debt. Except student loans which are currently defferred. 

I have tried to get a few small credit cards and have been turned down and we tried for a small signature loan and were turned down. 

What else can we do?  I don't want to do a secured credit card but will if I have too. 

Any helpful hints? 

---

Where/what bank did you apply with?  Do you still have the bad accounts on your reports?

Do you each have the 3 free reports directly from the 3 agencies??  If not, go to my sig block & click the free report link.  You each need to know exactly what is reporting to all 3 directly from their site.

[Anonymous]

I applied for Credit cards for VISA/Mastercard for our three banks--Bank of America, USAA and Desert Schools federal credit union (this we tried for a Visa and signature loan).  I am scard to try again as I don't want to get turned down again and start having it impact my FICO. 

I have bought a credit report from all three.  I started paying for credit monitoring through USAA when we started all this about a year ago.  Every 3 months we paid extra to get a tri-merge report to make sure all is clear. 

What is a good will letter?

[guiness56]

A good will letter is sent to a collection agency or an original creditor.  Basically, it is asking for the companies "good will" in removing negative accounts, lates etc, from your credit reports.

They do not have to honor them but it never hurts to try. 

And if they say no the first time, keep sending them.  Send them to someone different in the company til you find someone who will do it.

Message Edited by guiness56 on 08-22-2009 05:02 AM