Need help for fast credit score rebuild

[RecentlyDivorced]

I have a similar but different topic here - My ex-husband and I had a Property Settlement Agreement under which I released the home to him for a "buyout" amount and the Agmt. stipulated that he was to re-finance our jointly owned home in order to remove me from the mortgage (and a Quitclaim Deed to remove me from the Deed); this was signed in December '13.  Our Final Divorce Decree was not final, however, until February 25, 2014, which set the clock ticking for him to then take care of the re-finance, which was just finalized on April 1st.  So, I look at my credit reports today to see if his mortgage company has reported the account closed and that the mortgage is no longer included on my credit report and is no longer a debt in my name.  Well, it was removed from two reporting agencies so far, with the 3rd one posting soon, I guess.  However, I was shocked to see how far my credit score dropped by about 40 points!!  I now have no significant debt, have one credit card with $150 balance, paid off my car loan in January, paid off debts that were over 120 days old (due to paying an attorney for a year the grand total of $20,000 and no money left over every month to also pay 5 credit card accounts - two Visa's and 3 store cards).  The credit cards were fully paid off also in January and my score was starting to rise towards 628 after months of it being in the mid-500's to upper 500's due to divorce crazyness, legal fees, living on my own and supporting two teenagers, etc. 

I'm working so hard to save money, to have no debt, increase my credit score and to buy my own small home for me and my two kids (one of which is leaving for college in the Fall).  I am removed from the largest debt now - a home mortgage in the amount of approx. $370,000, and look what happens to me - my scores all drop by @40 points!!!  It's just not fair....

Will the scores rise again in a month or two?  Should I contact a reputable credit repair company to help me remove derogatory remarks from my credit report (I've tried writing goodwill letters to the banks owning the previous credit card debt that I paid)?  What in the world can I do now to increase my credit score?  BTW - I've got one active credit card only now with a credit limit of $1,000 (a secured card) and the balance is $150 as I stated above.  Should I apply for another credit card at this time even though there will be another slight hit to my credit score but a temporary one?  HELP!  My apartment lease is up on July 1st, and I'd really love to be in a home of my own by then.  From the divorce settlement funds, I have a 30-40% down payment I could make and am frustrated that I cannot get a mortgage for the remainder just due to a stinky credit score.   What happened in your situation?  Thank you....

[Revelate]

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@RecentlyDivorced wrote:

I have a similar but different topic here - My ex-husband and I had a Property Settlement Agreement under which I released the home to him for a "buyout" amount and the Agmt. stipulated that he was to re-finance our jointly owned home in order to remove me from the mortgage (and a Quitclaim Deed to remove me from the Deed); this was signed in December '13.  Our Final Divorce Decree was not final, however, until February 25, 2014, which set the clock ticking for him to then take care of the re-finance, which was just finalized on April 1st.  So, I look at my credit reports today to see if his mortgage company has reported the account closed and that the mortgage is no longer included on my credit report and is no longer a debt in my name.  Well, it was removed from two reporting agencies so far, with the 3rd one posting soon, I guess.  However, I was shocked to see how far my credit score dropped by about 40 points!!  I now have no significant debt, have one credit card with $150 balance, paid off my car loan in January, paid off debts that were over 120 days old (due to paying an attorney for a year the grand total of $20,000 and no money left over every month to also pay 5 credit card accounts - two Visa's and 3 store cards).  The credit cards were fully paid off also in January and my score was starting to rise towards 628 after months of it being in the mid-500's to upper 500's due to divorce crazyness, legal fees, living on my own and supporting two teenagers, etc. 

@I'm working so hard to save money, to have no debt, increase my credit score and to buy my own small home for me and my two kids (one of which is leaving for college in the Fall).  I am removed from the largest debt now - a home mortgage in the amount of approx. $370,000, and look what happens to me - my scores all drop by @Anonymous points!!!  It's just not fair....

Will the scores rise again in a month or two?  Should I contact a reputable credit repair company to help me remove derogatory remarks from my credit report (I've tried writing goodwill letters to the banks owning the previous credit card debt that I paid)?  What in the world can I do now to increase my credit score?  BTW - I've got one active credit card only now with a credit limit of $1,000 (a secured card) and the balance is $150 as I stated above.  Should I apply for another credit card at this time even though there will be another slight hit to my credit score but a temporary one?  HELP!  My apartment lease is up on July 1st, and I'd really love to be in a home of my own by then.  From the divorce settlement funds, I have a 30-40% down payment I could make and am frustrated that I cannot get a mortgage for the remainder just due to a stinky credit score.   What happened in your situation?  Thank you....

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Welcome to the forums!

Don't do anything before asking and looking over the information in the Rebuilding forum, which I'm going to move this post to for better responses.

[roniram]

I think you are asking two separate questions.  One, will you qualify for a new mortgae in less than a few months, and two, should you apply for new credit.  I would first speak to a mortgage loan officer and let them look at your credit.  If the 120 lates are in the last 12 months, it may be impossible to obtain a mortgage.  Most lenders want to see 12 months of on time payments before they will consider lending. 

Second, I don't see why you would not benefit obtaining a credit card or two to help with your credit experience and utilization.  I don't know about doing both at the same time. But, maybe one of the experts may chime in here. 

Third - why waste your money and time with a "credit-repair" company?  You can send GW letters yourself.  Sometime, it's about sending it to the right person with a description as to why you fell into the position you were in.  There are several examples of individuals trying over and over again until they got the results they were looking for.  Do search under "credit rebuild" and read some of the inspiring stories you will find.  Good luck to you.

[RecentlyDivorced]

Thank you for your time and your response.  I have written Bank of America (2 cards ) and Comenity Bank (3 store cards) Goodwill Letters, and there's been no response from either institution.  I have now disputed their statements on my credit reports showing the Status of these Accounts as "Paid/Charge Off".  Although they were paid in full, all these accounts still have the terrible words "Charge Off" associated with them and continue to keep my score low.  I asked BofA and Comenity verbally to remove the Charge Offs when I paid them in full, but of course, I was a little more ignorant a few months ago regarding this whole process and didn't know about the "Pay for Delete" process; now, I am swimming upstream to have them remove the Charge Offs by disputing their statements through the Credit Bureaus.

Anyone have any further advice - writing additional Goodwill letters to them?  They already have my divorce story which I explained very matter-of-factly rather than trying to pull on anyone's emotions at the BofA and Comenity Bank - I don't think they have any human emotions at these places!!

Many thanks to anyone and everyone here!

[growing123]

I don't have much to add, but I have seen several threads about Charge Offs.  I'm sure the experts will chime in, but meanwhile you might want to check out the thread below. Good luck! 

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Charge-Off-Paid-In-Full/td-p/2815105