Quick and proven ways to Re-Build Credit

[Anonymous]

Hello Everyone! 

Boy, am I glad to have found this Forum! To be honest, I was completely hopeless when I found that I had a score of 581. I'm currently planning to get married and my in-law wanted me to sign up for this AmEx Delta Skymiles card and I got rejected. It was then, I had this epiphany and decided to re-build credit. A brief history:

I had a BoA secured card, Cap One Platinum Master, Barclays Apple Card (Closed but not paid off), Citi Diamond Preffered and store cards include JCP, Macys and Amazon store card. Now, I got all these cards while I was in college and like any other stupid college kid, I maxed 'em out and have been maintaing the highest balances and just paying interests. On Oct 2012, I signed up for a $5,000 personal loan from One Main Financial and I have been paying it off consistently for two years only to realize I still owe them $3,500. I purchased a Honda Accord and the pending pay-off amount on that is about $36,000. I have been somewhat consistent with Honda, I may have made like 10 late payments not more than 30 days. I have a Sprint account and have been 99% consistent in paying them. 

Now, about sometime last year I had moved out of my apartment due to my new job. I missed multiple letters from Amazon requesting me for paying off the $220.26 balance. In time, I forgot and the account went into collections, this account has been paid off in full, but the agency (Portfolio Recovery Associates, in Virginia) is refusing to remove the entry from my credit report. Also, I'm disputing another account from my previous utility company that is trying to charge me for the months that I haven't been living at the residence. The agency (Pay Harris) told me that the Original Creditor (PSE&G) had purchased it and they don't have information on it. Now, I still see this as a derogatory remark on my TransUnion Credit tracker (provided by Cap One). 

With that being said, I started out with no information on how this whole Credit reporting shindig works. I googled as much as I could only to find negative results. I had almost given up and kept kicking myself for being irresponsible. Luckily, I read online that SkyBlue services will dispute any discrepancies on your credit report and that will help boost your scores. So, I signed up for the service and currently they have sent out dispute letters to all three CRA's. While this is still in process, I had paid off the $220.26 for my amazon account. I'm also saving up to clear the $3,500 balance on my personal loan which I anticipate to clear by end of this year. I have a relatively high paying job now and I want to learn to re-build my credit and get offers from creditors with low interest rates and better benefits. I would like to get my current score of 585 to at least upper 600's or lower 700's. I know this is impossible/ridiculous but some of you have done it, and what's better than hearing from people who have gone through difficulties like me? Below are my details:

Oldest Credit Line: 4 years

Avg. CC utilization: 77%

Recent Inquiries: 6

Delinquent: 0

Derogatory remarks: 2 

Total Loans/ CC Balances (as of 10/16/2014)

Am Honda - $31,335

Barclays - $1216 (Closed but I've agreed to pay installments to clear balance)

Bk of America - $0 (Closed - $500 secured card)

Cap One - $0 (Limit -$500)

Citibank - $900 (Limit -$1120)

Macys - $0

JCP - $0

One Main - $3,500

Help me with some valuable advise on how to boost my scores and how to recover from the mess I put myself into! 

[Anonymous]

Seems to me like you still haven't learned to manage money or credit. Why pick up a 36k auto loan when you have debt that isn't paid off yet? And 10 30-day lates are not what is called being "somewhat consistent". Somewhat consistent I would say 1 30 day late, but definitely not 10. Before you try to apply for other cards, educate yourself on credit first. 

[Anonymous]

I understand, and I repent being stupid! The $36k loan was something my car dealer got me to do when I had no idea what I was doing and I was just happy to drive off a brand new fully loaded car. I'd like educate myself on credit and now I have stopped myself from exceeding more than 20% of my CC limit and have vowed myself not to indulge in making stupid decisions when it comes to my finances. I figured this forum would be a starting point for my credit education. Is there light at the end of the tunnel for me or should I just give up? 

[Anonymous]

Fastest (though not necessarily fast) and proven ways to rebuild credit.

1) Pay all of your bills on time, every time.

2) Make sure all three credit reports are accurate

3) Pay all of your bills on time, every time.

4) Keep your credit utilization low, at statement cut off

5) Have a little patience.

6) Pay all of your bills on time, every time.

[Anonymous]

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@Anonymous wrote:

Seems to me like you still haven't learned to manage money or credit. Why pick up a 36k auto loan when you have debt that isn't paid off yet? And 10 30-day lates are not what is called being "somewhat consistent". Somewhat consistent I would say 1 30 day late, but definitely not 10. Before you try to apply for other cards, educate yourself on credit first. 

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OP said lates were 'less than 30 days'. Such lates are not reportable and shouldn't reflect badly on his CR. They merely incur a minor late fee. Other than that, yeah OP still has some learning to do. I suspect thats why he is here, no?

[Anonymous]

Never, never, ever give up. 

First things first. Lower utilization down to one of the cards reporting just 1-3%. Keep as much as good accounts open and especially the oldest ones. 

[Anonymous]

Thank you! I have started paying my bills on time now and I will continue to do so.

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@Anonymous wrote:

Fastest (though not necessarily fast) and proven ways to rebuild credit.

1) Pay all of your bills on time, every time.

2) Make sure all three credit reports are accurate

3) Pay all of your bills on time, every time.

4) Keep your credit utilization low, at statement cut off

5) Have a little patience.

6) Pay all of your bills on time, every time.

---

[Creditwiser]

Welcome to the Forum.  There will be many people chimming in with a lot more experience than myself and I suggest you read their comments as well as the many comments on other posts within this forum.  I'm talking about days worth of reading.

I will say that you're wrong when you say  "Impossible / rediculous" in your comments.  Everything you need to get where you want to be can be found on this Forum. It will be up to you to apply what you learn here and then you will be able to watch your progress.

I see you mentioned signing up for Skyblue. You can do exactly what they will do and in most cases with better results and for free.  You've taken the first step, now read, read, and read some more and get busy cleaning it up.  You will soon see your CR look so much better and in turn your scores will rise.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Seems to me like you still haven't learned to manage money or credit. Why pick up a 36k auto loan when you have debt that isn't paid off yet? And 10 30-day lates are not what is called being "somewhat consistent". Somewhat consistent I would say 1 30 day late, but definitely not 10. Before you try to apply for other cards, educate yourself on credit first. 

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OP said lates were 'less than 30 days'. Such lates are not reportable and shouldn't reflect badly on his CR. They merely incur a minor late fee. Other than that, yeah OP still has some learning to do. I suspect thats why he is here, no?

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While still not being reported, it is a very poor way of paying things, especially since he didn't learn from the first time he did it. $35 isn't really minor when you add them all up. I agree though, that he came here to the right place to learn as I have also done. 

[Anonymous]

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@Anonymous wrote:

Never, never, ever give up. 

First things first. Lower utilization down to one of the cards reporting just 1-3%. Keep as much as good accounts open and especially the oldest ones. 

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Forgive me if I'm wrong, I used the credit simulator from Cap One (Free) to check if my credit score would change should I pay off all my Credit Cards and it didn't change at all.  

Is this correct? I will however, consistently continue to pay off all my bills on time!