Should I pay down debt or pay off/how long to improve score

[Anonymous]

Thanks for taking the time to read this, glad I found this forum. My score is mid 600s. I want to improve it to the mid 700s, which I know takes time. Here are my questions:

1. How many credit cards should I have in my name to improve my score? I've read to have no more than 2. Is that correct? Do I close the others when paid in full? 

2. Is it better for your score to pay your credit card debt down or off completely? 

3. I have a late payment on my second mortgage from 9/2013, which I was told by a lender will "time out" after two years-9/15, which is just a few months away. How long after that would an improvement show on my score?

4. I have a good income/debt ratio, but am afraid some past transgressions are affecting my goals now. What else can I do to get this score up?

5. I need to refinance my home? Should I wait until after 9-15 (see #3 above), or does it matter?

6. If I do everything right, about how long would it take a score to get up about 80 points?

thank you to whomever has the patience and kindness to read and answer these. Much appreciated!

[gdale6]

---

@Anonymous wrote:

Thanks for taking the time to read this, glad I found this forum. My score is mid 600s. I want to improve it to the mid 700s, which I know takes time. Here are my questions:

1. How many credit cards should I have in my name to improve my score? I've read to have no more than 2. Is that correct? At all times you want to have no less than 3 bankcards and 1 store.  Do I close the others when paid in full? I would not close any cards that dont have an AF or MF.

2. Is it better for your score to pay your credit card debt down or off completely? You want 1 card reporting no more than 9% of its indiviudal CL all other revolvers at 0 to help maximize your Fico, you will need to play with the actual percentage to find the sweet spot its different for everyone. I would first try 1-3% and see what Fico you get.

3. I have a late payment on my second mortgage from 9/2013, which I was told by a lender will "time out" after two years-9/15, which is just a few months away. How long after that would an improvement show on my score?  30 day lates tend to affect for only 2 yrs but they can do so for the entire time depending on your overall profile. You want to send a GW letter to them asking for forgiveness of the late.  http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/GW-letter-Q-amp-A-Examples-and-GW-Success-Stories/td-p/1573680

4. I have a good income/debt ratio, but am afraid some past transgressions are affecting my goals now. What else can I do to get this score up? Best thing you could do is get the late on your mortgage forgiven. You have not said how many revolvers you have now or what other loans you may have on file.

5. I need to refinance my home? Should I wait until after 9-15 (see #3 above), or does it matter? You want to present youself in the best light

6. If I do everything right, about how long would it take a score to get up about 80 points? I dont give such answers its impossible to do so, there are way too many variables in the equation.

thank you to whomever has the patience and kindness to read and answer these. Much appreciated!

---

Welcome to the My Fico family

[Anonymous]

Thank you so much! What great information! 

Do you have any experience with HELOCs? I have a $70,000 through Compass and have only paid the interest for 10 years. Big mistake. How do I get this paid down/off-is there a formula to use?

Also, I will look into a GW letter for the late payments. Hopefully that will help. 

Thanks again!

[Anonymous]

---

@Anonymous wrote:

Thank you so much! What great information! 

Do you have any experience with HELOCs? I have a $70,000 through Compass and have only paid the interest for 10 years. Big mistake. How do I get this paid down/off-is there a formula to use?

Also, I will look into a GW letter for the late payments. Hopefully that will help. 

Thanks again!

---

Not an expert on this, but assuming the loan isn't coming due soon, pay at least 2X, or even more, than the minimum. After a few years, you'll see the debt getting much smaller. Alternatively, and this is where having good credit will be a big help, refinancing the debt into a new loan. Easiest route is to simply pay more than minimum on the HELOC, and at some point, if funds allow, doing likewise with your first mortgage. More equity you have in your home, more options when it comes to refinancing; rolling all of it into one loan.