Rebuilding without debt and double entries

[Anonymous]

Hi all, first post here.

My situation is probably like many others - wanted to get a loan, declined - decided to run my reports to find out why.

My scores were in the 570ish range. I found a couple items that I know I paid and those were removed and 2 small items which I paid immediately. This took my scores up to where they are now. Eq - 614, TU - 599, Ef - 615. There is one other item on there for $413 which I was positive I paid and when I contacted the agency and original "creditor" - a hospital they had no record so I have disputed that one.

I don't use much credit but a few month's ago I decided to get a cap one card with the $300 balance, I use it for online purchases and pretty much pay it off the next day.

There are a couple older "positive accounts" which were paid and closed, most about 5 or 6 years old and a car loan which was never late and paid from 3 years ago.

There is 1 thing showing up twice, it was a Wamu credit card I had back in '08, when everything hit the fan I got laid off and Chase bought Wamu. I had been paying for the "credit protection" plan  about $15 a month for 2 years -  I never missed a payment but when I got laid off I tried to use the protection plan - I mailed everything they needed (proof of layoff etc) to WAMU's company but they literally were bought by Chase and I had to deal with Chase's company for that and must have mailed them a dozen times, they wound up closing the account and putting it into collections (Midland). Needless to say I tried to get back at least the monies I paid fo the protection to no avail and later found out there was a class action suit on it - I think people got $35 back - I would have told the lawyer to shove it but that does not matter here. I wound up paying Midland off for this by calculating what my payments for the protection plan were during the time I had the card and subtracting that from the balance - so account paid. The account is showing up for both Chase and MIdland so it looks to me like 2 hits on my report... There is another capital one card from back around '08 that seems to show up twice but that was close and had 1 late payment on it.

I am not sure what to do about this, I don't want to get other cards etc when I pretty much have enough money to buy what I want but would like to get a loan and the bank needs at least 620 credit rating... I am close but see no way to raise my score at this point... almost everything I mentioned will drop feb next year anyways.

All 3 companies report my income -> debt ratio as excellent but my payment history as bad mainly because I really have no payments...

how do you raise that when you already have the cheapo card and don't want to take out credit just to get credit, especially when your not likely to get approved anyways?

[Anonymous]

< and don't want to take out credit just to get credit,>

Yeah...Unfortunately that is exactly how the system is designed....

Your file is currently 'thin', meaning you don't have a lot of recent payment history to go on. But the good thing is that you have no recent derogotory items, and the ones that are on there will soon fall off.

What you can do, is try to get early exclusions on the oldest items, which you request through the CRAs. You do have a credit line established, which is the most important thing. After 6 months or so you can start requesting CLI's on your card, and get a couple more. Another thing that will help you is to get a share secured loan from a credit union. If you don't have a credit union you can join I would suggest SDFCU. Join as a member of American Consumer Council. Its 5 bucks to join the ACC, and SDFCU does not even ask for proof anyway.

[Anonymous]

Thanks for the reply,

I recently paid off my boat at a credit union, unfortunately this was in my wifes name (fiance at the time of the loan) but I made all the payments ($25k boat loan). I have a good relationship with the loan officer but cannot think of anything I would need a loan for from them. The loan I would like to get is for vacant land and the credit union does not loan on that and only a few banks in this state will. It would be a relatively small loan for a "mortgage" - $41k and I would be putting $10k down making it a $31k loan... The credit union might do this as an unsecured loan but the interest rate on those is insane. Unfortunately my score brings down our rating as a couple on the loan making us on the bubble according to the loan officer - if we could get that loan with everything else I think getting that would help my rating as much as anything... might have to come up with more down to maybe push us over the top in order to get the loan...

[Anonymous]

Use your savings account with the CU to get a small Share Secured Loan. These have tiny interest rates, but add a nice little installment loan to your file. Just put the loan amount back into the savings account, set up auto-payment from the same account. Set and forget.

[Anonymous]

Thanks CFT,

I might have to look into that if we get denied. My Dad said he would be a co-borrower if I wanted and he probably has 800+ rating, then at least I would show payments on the loan if we get it.  I Don't like the idea of paying interest on anything I don't need, it seems counter intuitive to waste money like that.

[thatguy1]

The other option is if you have a car new enough to get a loan on it, get one. The interest will be high so take the money you pulled out and pay a big chunk to avoid interest. Leave enough that it will report for one year, and set it to auto pay from an account that has the money you got out from it. A 600 score will most like be an 18% interest rate.

[thatguy1]

Have your dad add you as an AU on some old credit cards that have perfect payment history. That's how I got my foot in the door for an auto loan (27K) and some other stuff. The AU doesn't weigh very much on the newest Fico model but a lot of loans (CUs in particular) use an old model.

The credit cards need to report low util (1-9%) and be 4+ years old.

[Anonymous]

thanks thatguy1...

I have an older ford explorer, it's in great shape but probably is only worth about $5k blue book... even if it was newer there is no way I would pay 18% interest just to pay something even if that means my score stays where it is. I probably have enough in my 401k to just buy this property I want so maybe I will just do that and say to heck with all this credit score crap - I won't pay a couple grand just to raise my score - that is just stupid in my opinion. Eventually Capital one will increase my limit (I think they already did once but I did not need more so I think I declined)...

[Anonymous]

what is an AU?

[Anonymous]

@Anonymous wrote:

what is an AU?

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