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New Member
1stCarBuyer
Posts: 7
Registered: ‎09-05-2012
0

Rebuilding My Credit for a New Car

Hello! 

 

Let me tell you a little about myself. I am 23, full time retail manage, living with my mother, and going to school on and off. My FICO score is currently 575 :smileyfrustrated: I had been previously using Quizzle, Credit Sesame, and Credit Karma but after reading that those score basically meant NOTHING, I decided to sign up for a free trial here. In a few ways I wish I hadn't! My real score is WAAAAAY LOWER than that the other sites had me at! But at the same time, I'm glad I found out the truth so I now know how much work I really need to put in. 

 

Anywho, My goal is to get an Auto Loan for $15,000 for a new car. Hopefully by November. I'm wondering if I can go from 575 to 620 in 2 months? If not that a somewhat decent score to get approved for this loan. I plan to get the loan through my CU, Chartway, and on their site they say they need proof of employment if my score is below 650. I've been with my full time job a year in December, but been working at my seasonal full time job for 5 years.

 

I have a few Bad notes on my report including an old Judgement from Capital one from 2008. It said it was charged off but it still shows on my report. :-/ . I also have a few collection from medical bills, and an old one from Sprint that I plan to pay off as soon as this Friday, as well as paying down my current credit card to at least 50%. 

 

If you haven't noticed already, I was pretty careless with my money/credit when I was younger. I was incurring more debt than I can afford and now that I have a decent paying job I'm trying to clean up my mess! That and dealing with my Mother who puts accounts in my name without my permission. So here is my game plan:

 

1. Pay off Sprint, Medical, and pay down my credit card totaling in about $400(estimate) by the end of this month

2. Not apply for anything else until I'm comfortable applying for my auto loan. I noticed that Carmax pulled on my credit when I first went car shopping a while back. I wonder if that hurt me or not?

 

Also, I currently applied and got approved for Bill Me Later. They pulled but does it show up like a credit card? 

It seems like the only thing thats GOOD on my credit is that I am now paying all my bills on time! I've only been late once on my current credit card(which is through Chartway which is why I want to pay that down)..

 

Do you think it's possible to go from 575-620 in 2 months? Should I even get my hopes up? I'm thinking about keeping my account beyond the trial now that I know my real score just to see. 

 

Thanx for listening to my ramblings.

 

Moderator Emeritus
llecs
Posts: 32,869
Registered: ‎08-04-2007
0

Re: Rebuilding My Credit for a New Car

Welcome!

 

575 to 620 in 2 months is possible. I started from low to mid-500s in 8/2007 and by November, hit 650+ across all 3 FICOs. It takes work, effort, and a herd of ink, stamps, and paper.

 

CapOne - You said "judgment". Is there a judgment reporting aside from the CO? CapOne can report a CO with a balance and they can continue to report lates monthly with added interest. They can do that up to the point you pay it off or they sell the debt. They won't sell it if sued already. If I had that, I'd pay in full ASAP. If a judgment is reporting and once the $$$ clears, you can take steps to get the judgment removed (not the charge-off) by having it vacated. I'll let others chime on that, but there's examples in here of that process. For the CO after payment, send a GW.

 

For the medical CAs, either follow the HIPAA process (which means not communicating with the CA and paying the debt with the OC) or send a DV to the CA and if they verify, send a PFD.

 

For Sprint, if the CA is reporting, send a DV. If they verify and you agree, then send a PFD. If Sprint only reports, send a PFD.

 

50% util is a major score dinger. If mine were at 50%, I could probably see a good 50-60 points returned just by getting all of my CCs to $0 except one and get the one to a balance of under 9% of the CL. YMMV on your credit and other factors too.

 

On the game plan, I recommend doing the above instead. Paying a collection like a Sprint or a medical collection will never ever help your FICO. Paying a CO'd CC can sometimes increase your score as they are usually still factored into revolving util.

 

Stop applying for anything prior to the car. Inquiries are a tiny part of scoring. Usually the impact is felt if your scores are high and/or you've been app-free and new account-free for a long while.

 

AFAIK, BML does not report. And you wouldn't want it to if applying for a car. The ding for the new account could hurt.

 

How bad is that CU CC's late? How recent? If inside the past couple of years, and the account is open, then send a GW.

 

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

 

 

New Member
1stCarBuyer
Posts: 7
Registered: ‎09-05-2012
0

Re: Rebuilding My Credit for a New Car

Thanks for your reply. My CU CC had only been late once like 4 years ago a little bit past the due date. Enough to incur a late charge. It was because I paid it off way early thinking that I'll just get it out of the way in advance for that month, but instead they counted it as a double payment for the previous month. I haven't been late since and I currently have it automatically coming out of my checkings account.

 

I've been afraid to even touch my Cap1 bill because I honestly wanted it to just fall off. It was from when I went away to college to pay for books, and my Mom was suppose the make the payments for me,and well you see how that ended. But if it will help my score I could try and settle with them. 

 

I'll pay my Medicals through the OC. I have a question about one of those hits because I remember paying a medical bill of that amount off yet it's still showing that I owe. I feel like Sentara is either unorganized or very shady. I got a collections letter the other day for $9 from them and I don't even remember getting an initial bill! 

 

I think the CA is reporting for Sprint, so I think I'll be send DVs to them and medical.

 

I apply for BML before I found out that I was going to be purchasing my car on my own. My Dad was going to Co-sign for me but he ended up having to do a Refi, thus leaving me to scramble and get my stuff together.

 

So basically you're saying hold off on medical and Sprint and focus on getting my CC util down? If so, then I'll take the money that I was going to use to pay off medical and put it towards a payment on my CU CC(on top of the automatic payment).

New Member
1stCarBuyer
Posts: 7
Registered: ‎09-05-2012
0

Re: Rebuilding My Credit for a New Car

This morning I woke up and got my bill folder and started going throught all my bills. I paid on some of my medical bills. Including the $9.40 one that was sent to collections. The thing is I paid through the bill pay on the site for the Medical Offices and NOT the CA. Do you think they will post it to my account,send to collection, or will they just take the money and do nothing? I manage to find one of the bills to the collection on my record, and it's from 2008! I  paid it through the OC website.

 

They wouldn't have processed my payment if the account didn't exist right? They have to post it to my account right? This has to help my score....right?

 

As Cap 1, I found an old collection letter from last year where the CA was going to let me make payments on what I owe, at the time I wasn't working, but now I wil be willing to make the monthly if it'll help my score. Though, since the card is so old I kinda want to wait for it to fall off. But, the payments are for 12 months and though I plan to purchase a vehicle that could help my score....right?

Regular Contributor
apandabear
Posts: 200
Registered: ‎03-15-2012
0

Re: Rebuilding My Credit for a New Car

If these accounts are already collection accounts that appear on your credit report, just paying them off will not help your score.

 

If they are already on your credit report, and you've paid them, you need to send Goodwill letters (GW) and ask if they will remove it from your credit report.. Search the forum to see some examples. I've had a lot of GREAT luck with GW letters on old, paid collections. 

 

If you haven't already paid the collections and they are on your credit report, you need to arrange a Pay-for-Delete (PFD). You ask them if they will delete it from your credit report if you pay. Some will REFUSE a PFD, but then they will accept a GW after you've paid. Try PFD first. Then GW.

 

If these aren't collections on your credit report, you're doing a good job of pre-emptively stopping them from reporting. Keep an eye on your credit report. Make sure you know EXACTLY what each account is. You could have OCs and CAs reporting the same account. Match them up -- so you know how to tackle each. 

 

Making payments to a CA on an old account won't raise your score. You need to be very careful about what you pay, when you pay it, and how.

 

There are a lot of helpful folks on here, and they can take you through the processes of : DV (Debt Validation), SOL (Statute of Limitations -- how long a CA or OC could SUE you for the money), CRTP (Credit Reporting Time Period), and other information that will be helpful for you.

 

Collections and Chargeoffs are MAJOR delinquencies. Just paying them off doesn't make them go away.

Late payments are also delinquencies. You have to contact the OC and ask for GW to hope to get these removed.

 

Try doing a little searching around the forum on the points I've mentioned above. And I'm sure others will chime in to help you. Ask specific questions. Give detailed information when asked (What state do you live in? Who is the OC? Who is the Colleciton Agency? How much do you owe? What is the DOFD (date of first delinquency)? and etc..) Good 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

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