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Established Member
bhca
Posts: 13
Registered: ‎07-17-2012

Paying Off Debt but Score Not Rising

I am a new subscriber to myfico and scorewatch as of July 2012 and need some pointers/advice/encouragement.  I'm sitting at 644 (per scorewatch).  Background:

 

Owe 1,766 on Bank of America credit card.  6,500 limit but account was closed by creditor more than 3 yeas ago.

Owe 3,422 to Discover.  4,300 limit but account was closed by creditor more than 3 years ago.

Have a Citi Card w/ 2,400 limit.  I make sure to carry less than 9% balance.  It is almost a year old account.

Owe 10,500 to Sallie Mae.  Never had a late payment.

Have another City card (AA advantage) that I have used but now carries a zero balance.  Opened it in January.

I have paid off $2,000 in debt since July.  That includes recently paying off a 1,000 balance on a capital one card (previously closed by creditor) last month.  My credit score has not budged a point.  When can I expect an increase?? 

 

I have baddies on my account, including 30, 60 and 90 day lates, and a couple of collections that have been paid, but they are all now over 3 years old as of August 2012 and I have not been late on a payment since.  I want to be in the 700s in about 3 months because I plan to apply for a mortgage and want the best rate.  I plan to pay off Discover within 3 and a half months (29% interest), then attack Bank of America which only has a 6% interest rate.  Can anyone tell me what I should be doing differently as far as managing credit?  I got these two new credit cards to show I can manage my credit because I presently do not have a car payment or mortage and my other accounts (Bank of America/Discover) are closed.  My plan is to use the new cards, keeping balances below 9%, and continue to pay down the other two credit cards as rapidly as possible, but so far my plan does not seem to be making any difference.

Frequent Contributor
atarvuzdar
Posts: 375
Registered: ‎01-20-2012

Re: Paying Off Debt but Score Not Rising

[ Edited ]

bhca wrote:

I am a new subscriber to myfico and scorewatch as of July 2012 and need some pointers/advice/encouragement.  I'm sitting at 644 (per scorewatch).  Background:

 

Owe 1,766 on Bank of America credit card.  6,500 limit but account was closed by creditor more than 3 yeas ago.

Owe 3,422 to Discover.  4,300 limit but account was closed by creditor more than 3 years ago.

Have a Citi Card w/ 2,400 limit.  I make sure to carry less than 9% balance.  It is almost a year old account.

Owe 10,500 to Sallie Mae.  Never had a late payment.

Have another City card (AA advantage) that I have used but now carries a zero balance.  Opened it in January.

I have paid off $2,000 in debt since July.  That includes recently paying off a 1,000 balance on a capital one card (previously closed by creditor) last month.  My credit score has not budged a point.  When can I expect an increase?? 

 

I have baddies on my account, including 30, 60 and 90 day lates, and a couple of collections that have been paid, but they are all now over 3 years old as of August 2012 and I have not been late on a payment since.  I want to be in the 700s in about 3 months because I plan to apply for a mortgage and want the best rate.  I plan to pay off Discover within 3 and a half months (29% interest), then attack Bank of America which only has a 6% interest rate.  Can anyone tell me what I should be doing differently as far as managing credit?  I got these two new credit cards to show I can manage my credit because I presently do not have a car payment or mortage and my other accounts (Bank of America/Discover) are closed.  My plan is to use the new cards, keeping balances below 9%, and continue to pay down the other two credit cards as rapidly as possible, but so far my plan does not seem to be making any difference.


The first question I have is whether or not you have set up ScoreWatch appropriately to ensure any score change will cause an alert. In your settings your target score should EQUAL your current score. That way, any change in score--up or down--will cause an alert. As you begin to see score changes you should immediately go back into your settings and change your target score to the new score. This will ensure that any change will cause an alert.

 

Additionally, your score can only change IF any payments you've made have been reported to the credit bureaus. Typically (but not always), accounts are updated once a month just after the statement date for each account.

 

Finally, it sounds like you've got a solid plan of attack. You definitely want to pay off the Discover card before the BofA (but make timely payments on both, of course) because of the 29% interest, but also because the Discover card is probably wreaking havoc on your utilization--both average utilization across all CC's and individual utilization. Even though the card is closed it counts in your utilization calculation until the balance is $0.

 

All of this being said, with even a couple collections and a handful of lates on your account it may be difficult for you to hit 700 unless and until some of that derogatory information is removed from your report(s). Consider sending GW letters or negotiating PFD's if that's an option for you financially. In conjunction with paying down your Discover and BofA this just might get you to that 700!

 

Good luck!

Current: EQ 673 September2013 / TU 696 September2013 (Walmart)
Start: EQ 584 Feb2012 / TU 629 July2012

Wallet: BofA Cash Rewards Visa Sig $5000 / Lowe's $6000 / JCP $3900 / eBay MC $3200 / Barclaycard Rewards $2000 / Walmart $3300 / CapOne NHRC $2000 / CapOne Platinum #1 $2000 / Amazon $1700 / Discover It $1000 / CapOne Platinum #2 (former Orchard) $750 / Amex Zync $500 Autopay
Moderator
Shogun
Posts: 12,875
Registered: ‎04-15-2011

Re: Paying Off Debt but Score Not Rising

Unfortunately just paying the debt does not help the way it reflects on your account.   The CRA will still see it as a delinquint account.  You need to try for PFDs for the ones that are outstanding and GWs for the ones that have been paid.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Established Member
bhca
Posts: 13
Registered: ‎07-17-2012

Re: Paying Off Debt but Score Not Rising

Thanks for the ideas.  I understand how to do a GW letter, but can you explain the Pay for Delete method?  Thanks for your time.

Moderator
Shogun
Posts: 12,875
Registered: ‎04-15-2011

Re: Paying Off Debt but Score Not Rising

Where you offer to pay them the outstanding balance if they will delete the TL.   Do some searches on the boards for PFD letters and see what you think.

 


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Established Member
bhca
Posts: 13
Registered: ‎07-17-2012

Re: Paying Off Debt but Score Not Rising

I have the alert set at 648 - 4 points above my current score.  The My Fico rep told me I should set it at 3 or 4 points over my current score.  So once a week I get an email stating no change; therefore I just assume it is sitting at 644.

 

I knew the Discover balance was killing me.  I think I can swing paying for PFD depending on what they charge and if they would agree to do it.  Just need pointers on how to go about it.

 

Thanks for the responses.

Established Member
bhca
Posts: 13
Registered: ‎07-17-2012

Re: Paying Off Debt but Score Not Rising

One more question:

 

I have two collections on my CR that I paid off in 2009.  One was for $650.00.  I was overdrawn in my checking account (those were dark days indeed) and it was sent to collections.  The second was a $150.00 medical bill.  Are good will letters appropriate for collection accounts that have been paid off?

 

Thanks in advance.

Regular Contributor
apandabear
Posts: 200
Registered: ‎03-15-2012

Re: Paying Off Debt but Score Not Rising


bhca wrote:

One more question:

 

I have two collections on my CR that I paid off in 2009.  One was for $650.00.  I was overdrawn in my checking account (those were dark days indeed) and it was sent to collections.  The second was a $150.00 medical bill.  Are good will letters appropriate for collection accounts that have been paid off?

 


Yes, yes and YES! I've had good experience with GW letters on old, paid collections.

 

Best of luck!

2009-10 - C/Os
2011 - Debts paid, no open credit
2012 - Rebuilding started, secured cards opened, SL rehabbed - EQ myFICO 636
2014 - 10k Discover, 3.5k Freedom, AmEx Green, SL, Auto Loan - EQ myFICO 695
Moderator
Shogun
Posts: 12,875
Registered: ‎04-15-2011

Re: Paying Off Debt but Score Not Rising


bhca wrote:

One more question:

 

I have two collections on my CR that I paid off in 2009.  One was for $650.00.  I was overdrawn in my checking account (those were dark days indeed) and it was sent to collections.  The second was a $150.00 medical bill.  Are good will letters appropriate for collection accounts that have been paid off?

 

Thanks in advance.


Absolutely get the GW letters moving.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Established Member
bhca
Posts: 13
Registered: ‎07-17-2012

Re: Paying Off Debt but Score Not Rising

When sending good will letters to collection agencies (whom I have paid off), would I send the letter to the collection agency or the creditor?

 

Thanks!


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