Rebuilding..what to do next?

[Anonymous]

Oy, so I have a story a lot like others I've read on here.  Hubby and I are about two years into taking control and really trying to clean up our credit.  From 2008-2011, our finances were terrible.  He came back from his second deployment to no job and I was waiting tables and going to school.  He was only able to find minimum-wage jobs, and we had a baby.  We used credit cards to get by because we were young and dumb.  We didn't see much improvement until he finally landed a good job in 2011. By that time we had charge offs and collections plus medical bills in collections from when the military canceled our insurance without telling us (over $10k!).  We spent 2012 and 2013 learning how to live within our means and cleaning up the most urgent finacial messes.  Last year, we were finally able to start tackling the bigger picture.  

Now we're at a crossroads.  Our lease is up in July and we need to move closer to hubby's work and the VA care he desperately needs.  We currently live about an hour from both and moving closer means moving into an area where housing costs are nearly double what they are here.  Teh best solution we've found is to purchase a mobile home and place it in a community about 15 minutes from his work and 20 from the VA.  We have 5 kids and renting in that area would cost us nearly double what our payments would be.

Our scores are currently 570-610.  Mid-low being 588.  We are working toward qualifying for a VA loan around $90k.  We talked to a lender who went over our reports and told us where to start, but now that we've accomplished the first set of tasks, we're no long receiving any feedback from them.  I am waiting on confirmation to pay off the last of our three judgements.  At that point, we were told it's only scores that hold us back.  580 is possible for a loan, but we really need to be above 600, closer to 620. 

So, those of you more experienced, what gives you the most bang for your buck on scores?

-payinng down current open credit cards (we have a few, most are under 50% utilization, two are above 90%...all have been paid on time since opening last year) or, 
-paying off old collection accounts (mostly medical, a few non that are old credit cards etc).

We don't have any big installment loans other than student loans that have been paid on time for two years now after either being caught up or in deferment/forebearnce. Our vehicle loan is actually in my father in law's name, we're not even cosigners, we just pay him every month.  

We're hoping that the judgments showing paid will give us a nice boost, but we aren't holding our breath since as far as we understand, they will still be reported, just shown paid. 

[Anonymous]

Paying down your cards should be priority number one for getting your scores up. PIF all cards but one. On that card, let it report a balance of no more than 9%. Vary it around a bit to find out exactly what percentage gives you the best results. Many people seem to get the best score at around 2%. Basically I would start at 9% and work your way down each month until you find where it peaks.

Paying off old collections will not help scoring *unless* you are paying off a charged off CC that the lender is reporting an unpaid balance on. Such accounts get added into your UTI% calculation and will hold you back.

Other collections you would ideally try to get a PFD. If you have paid items that are showing you can try to get GW deletions of those accounts.

[Anonymous]

Alright, we'll tackle the cards next.  I didn't realize they needed to be *that* low.  We saw a 16 pt jump when CapOne raised my credit limit and that card went from 97% to 50%.  So we started aiming at 50% on all of them, but we'll just keep focusing on those.  

I need to check and see if any of the old ones are reporting balances still.  I think most charged off and sold to other collectors and show $0 balance, but I'll double check.  

And while I thought I knew all the lingo, I'm going to have to look up what a GW letter is.  I noticed the newest TransUnion report shows estimated fall of dates and some of those are as close as 6 months out, so I need to see if I can get those deleted early.  Is that the same thing?

[gdale6]

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@Anonymous wrote:

Alright, we'll tackle the cards next.  I didn't realize they needed to be *that* low.  We saw a 16 pt jump when CapOne raised my credit limit and that card went from 97% to 50%.  So we started aiming at 50% on all of them, but we'll just keep focusing on those.  

I need to check and see if any of the old ones are reporting balances still.  I think most charged off and sold to other collectors and show $0 balance, but I'll double check.  

And while I thought I knew all the lingo, I'm going to have to look up what a GW letter is.  I noticed the newest TransUnion report shows estimated fall of dates and some of those are as close as 6 months out, so I need to see if I can get those deleted early.  Is that the same thing?

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GW Letter  http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/GW-letter-Q-amp-A-Examples-and-GW-Success-Stories/td-p/1573680

I would call or write TU to ask for the early exclusion on those debts that are 6 months out and closer to being removed, you can do the same with the other 2 CRAs 2-3 months in advance, EQ is usually the hardest to get the early exclusion from.

I will also let you know that any CAs assigned or purchased your COed debt have to work from the DoFD as set by the OC, they dont get to set their own.

PFD info   http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Q-amp-A-Examples-and-PFD-Success-Stories/td-p/2031275

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/td-p/4519

[Anonymous]

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@Anonymous wrote:

Alright, we'll tackle the cards next.  I didn't realize they needed to be *that* low.  We saw a 16 pt jump when CapOne raised my credit limit and that card went from 97% to 50%.  So we started aiming at 50% on all of them, but we'll just keep focusing on those.  

I need to check and see if any of the old ones are reporting balances still.  I think most charged off and sold to other collectors and show $0 balance, but I'll double check.  

And while I thought I knew all the lingo, I'm going to have to look up what a GW letter is.  I noticed the newest TransUnion report shows estimated fall of dates and some of those are as close as 6 months out, so I need to see if I can get those deleted early.  Is that the same thing?

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Yes, there seems to be several 'break points', 80%, 60/50%, 30% and 10%, from what I've been able to determine.