First off I want to say I am very happy I found this forum! I appreciate all the people who are sharing their knowledge as well as credit battling stories on here. I am seeking any input or advice on what I can do to better my credit situation.
Just prior to 2009 I had an ok score of 650. In 2009 the decline of my credit started. I had gone through a divorce and to make a long story short I had to quit my job where I had been employed for 10 years to relocate to FL with my family. I eventually found a new job making half of what I was making previously. I was unable to continue payment on my car as well as several credit cards. The car was repossessed and I was unable to pay the credit cards.
I recently went to get a car and I had 6k cash that I had after selling some guitars. I thought my credit was going to be as bad as it could possibly be. I was shocked when they came back and reported a score of 567. I know that's not a good score, but I thought I would be at the absolute bottom. Anyways, I was able to finance a car that day with less than desirable interest rates (over 20%). The remainder blance on the car is manageable and I have a game plan to pay this car off in a few years and avoid the outragiously high interest rate. I also plan to refinance if I can bring my score up enough to get a much better interest rate. After learning my score and being eligible to finance this auto I saw the light at the end of the tunnel.
I signed up with Credit Karma and learned of cards I may be eligible for based on my credit score. I applied for the Capitol One Platinum card and was approved with a $300 limit. I was pretty excited to have a credit card again!!! I have this with the sole intention of being responsible and rebuilding my credit. I learned about these tools through Credit Karma as well as this forum. I learned about credit utilazation which in the past I knew nothing about. I will never cary a balance higher than 20% on this card.
I looked at my report card through Credit Karma. I believe the only reason my score isn't far worse is because my ex-wife left me on the mortgage. From 2007 I show timely payments on this one loan. Here is where the big negatives are: I have 11 derogatory remarks that are listed as open accounts in collections. I also had several thousand dollars in medical bills that occured when I had an accident where I broke my neck. The car repo which shows a balance of over $9,000 as well as the credit cards that went into collections went delinquent in 2009. I hadn't made any payments on any of these items since then. To my understanding these items will fall off the report in 7 years + 180 days from the first delinquent payment. About half of my collections items should be falling off in the next couple of years. The other half are from medical bills that were accrued from over the last couple of years. (As I didn't have insurrance these medical bills are far more than I can afford to pay.
My Credit Karma report card is an overall F. By category I have a n/a for Open Credit Utilization, Percent of on Time Payments is an A, Avg. Age of Open Credit Lines 4yrs for a C, Total Accounts 21 B (most are the closed accounts), Hard Credit Inquiries a C (I have 4 from the auto loan inquiry as well as the recent credit card app), and Derogatory Marks I have an F. My goal is that I would really love to improve my score in a couple years so I could be in a position to qualify for a great interest rate on my dream car. I have a house that I bought with my brother the financing is under his name. My game plan: I plan to stay on the bank loan with the ex-wife for a few years because I believe it is helping my credit. I will use my captiol one card responsibly as well as make several overpayments to the principal balance of my auto loan. I'm hoping to see a boost on my credit score when the Open Credit Card Utilization shows as an A on my report card. Also some of these accounts that will drop off in collections should help in the next couple of years and then all that remains should be just the medical. I read that medical doesn't have quite as damaging of an impact on the credit score. I would love advice on anything I could do to start repairing my credit. All my collections accounts I believe are legitimate. Should I send out Debt Verification Letters to the original creditors? Any advice or any help anyone could give me is greatly appreciated!! I am very determined to repair and then maintain my credit! Thanks in advance for any help!!!
