Want to start improving my score

[Clashmoore]

Hello all,

I never paid much attention to my credit score nor did I worry about it. This has probably hurt me. I joined this forum and turn on the credit monitoring to get things back under control with the goal of purchasing a house in 1 or 2 years. My current Equifax number is 602.

February 2011, I carried 4 credit cards all of which were nearly maxed out. They were from Key Bank, but I believe the underwriter sold it to another, they used to be considered Gold, Platinum, and Student, but now they are all the same. Unfortunately, I opened them in 2005/2006, but when Elan took over, they are now all backdated to March of 2010, losing my history before. I was never delinquent on my payments.

Here are my cards:

Elan Financial, CL 3000, 7.99%

Elan Financial, CL 1000, 14.99%

Elan Financial, CL 500, 24.99%

PayPal, CL 700, not sure on %

All were at like 95% util.

I also applied for and was accepted for a AMEX Zync card in February (2011) as well. I prefer the rule where they have to be paid in full.

Wanting to get in control, I paid off every card and requested to close the 500 and 1000. I kept the PayPal and 3000 open. After lurking on these boards, I kind of wish I kept the others open.

I have a student loan through the US Federal Student Aid. In that, I have one blemish - a 60 day late in June when I was messing up my automatic payments and when they were due and not paying enough when the yearly price rose. Is there anything I can do about this?

I also found that I have a collections account against me, for medical equipment that should have been covered by my worker comp. I contacted the collection agency and they just requested my worker comp information. How soon can I expect them to correct it?

I have an auto loan that I have been good on.

I currently rent my home and have been good on that, but it does not get submitted to the credit agencies.

And that is it.

Since I have payed down all of my cards, should I expect a big boost in my credit score? And if so, when?

Also, with the fear of rising gas prices and my current monthly payments on my auto loan ( I have a Land Rover LR3, 13mpg), I am looking to trade it in for a new vehicle so I can save a few extra hundred a month. A dealership offered me $19k trade-in value, I owe ~$13k on it.

So my next steps, what do you think they should be?

I want to be sure the collection account is removed.

I want to request that the 60 day late be removed.

My first goal is to get rid of my vehicle and purchase a new to me vehicle, to save on gas and payments.

Should I also apply for new credit cards to up my overall credit limit?

Thanks for your help and I am excited to join this community!

- Clash

[Varakai]

Seems to me that you have a good mix of credit types (2 cc, 1 auto loan, 1 student loan) and thus I do not think you need to apply for a card unless you want too. I don't believe it will help you any other than bringing down utilization.

If your trade in is valued at 19K and you owe 13K, I would see if you could sell it for a couple of thousdand more and pay off the loan and use the 6 to 8k to buy a car in cash. Your loan, now paid off, will continue to report positively on your CR for several more years and will help you securing a home.

If you paid down all of your CC and they report less than 10% util, you should see an increase in your fico score as soon as they report.

[LIGHTNIN]

If the collection is recent, it can hurt your score by 80-100 pts. ouch!!

Stay on top of this with your employer or Worker comp people. You want it deleted, not  just marked paid.

Because a Paid CA hurts as much as an unpaid CA, no score change.

[mauve]

If you can, I'd sell the vehicle private party - you should get more than a dealership would give you.

I'd polish my credit report before applying for more credit cards, but it doesn't look like you're that far off. 

Usually, paying down credit cards will result in a score boost approximately when the next statement cuts.  Some cards just go end of the month, some go statement date, whatever it is, it usually happens within about a month. 

I agree with lightnin' about the collection - you need to make sure it's deleted because that was through no fault but your own

Definitely try to GW that SL, but SLs are almost impossible to get to delete information. 

[Clashmoore]

Thanks guys for the tip.

My letter to the Federal School loan was rejected, citing that I was indeed 60 days delinquent. So that will unfortunately stay with me, as it should.

Calling on the collections account, which should be covered by workers comp, they said they would send delete notices if I paid in full. It was for a $130 cast for my leg, and I could access the receipt and delete notice online to turn into my case worker. I did pay it and they said they would send the delete notice. Can I trust them and what should I do if I don't see the collection removed?

My truck, I don't want to bother selling it private party, as how many people looking for a Land Rover would pay $20k+ for one. I think my best bet would be to turn it into a dealer as equity towards a lower car payment as quick as possible. Once gas prices shoot up, it's value will tumble.

I'm excited to see my score rise when my credit cards and collection account report.

- Clash

[LIGHTNIN]

Clashmoore wrote:

what should I do if I don't see the collection removed?

Send a GW letter to the CA and remind them nicely about their promise, that if you PIF they would delete.