Which Has A Larger Impact on Credit Rebuilding?

[kashley6405]

I paid off an old collections account back in December because #1) I needed to and #2) it was starting to get nasty. 

This just now reported on my credit report as of March and I think it may have dropped it 9 points or so.  BUT, I am not for sure if that did it or if me maxing out my gas card a few weeks back in an emergency situation did.  I am not sure which one carries more weight in a credit score.

Now, here is the situation.  I am trying to get a home loan.  I have to have a 640 or higher.  I HAD a 647 back in February but when they ran my credit again last week to finalize the approval process, it had dropped to a 638.  I am 2 points below where I need to be. 

Desperate to repair my credit quick, I have paid off my credit cards to 49% total utilization (it was 66% before when it was pulled and I had a 647 CS) with one card being at a 52% utilization and the other one that was once maxed out last month at 100% utl is now at 46% utl.   

SHould that AT LEAST raise it by two points or does that collections account that was settled and paid off (it was a Citi credit card) carry so much weight that I probably wont see an increase?

I did call the gas card company and they said that they report every billing cycle which is around the 16th each month.  I am having my credit pulled again on the 23rd to see if we can get this loan with a 640 score. 

I am so desperate to get it where it needs to be!  I was pretty naive as far as what affects a credit score before all of this. 

I am trying to learn.

What do you think?

[RTOrockstar]

Get thst utl down and you should easily make up those 2 pts and probably more.

[kashley6405]

Thank you for your answer!

I did get them down and scraped and scrounged to get them down.  We already have this contract on the house and Friday was a terrible day at the bank because I found out about my score.  By the good graces of the seller, he extended the contract by 30 days to give me time to get my score back up those two points.

This was the detailed improvement:

Gas Card with $700 limit:  WAS (last month): Maxed at 100% utl.  NOW (as of today):  $296 balance at 46% utl

GE Money Card with $2,000 limit:  WAS (last month): $1,081 balance with approx 53% utl.  NOW (as of today):  $1,050 balance with approx 52% utl. 

COMBINED UTL: 49%

Hopefully, when the gas card company reports again on May 16th-ish, when we run again on May 23rd the score will be up!!!  I know when it was maxed out it reflected immediatly when they reported to the brueau and lowered my score!  Maybe it will be the same when the balance drops, immediatley!

[electra]

Getting your utilization down should get you a reasonable bump.  If you can afford to, try to get the utilization down to between 1% and 9%.   Also, start GW campaign to get derog removed. 

Good luck!

[kashley6405]

What is a GW campaign?

[Hopelives2]

You paid a collection item but paying it does not affect your score.  It only helps once a file is in review with a person, not a computer.

A GW (goodwill) campaign means you write the creditor and ask for them to delete the derogatory tradeline from your credit report.  Make it warm, make it so the person reading it WANTS to do the extra work (about 10 minutes) to submit a file to the CRA requesting deletion.

Think about honey v. vinegar

Also, get your utilization down below 9%... or at a minimum, 25% because it seems when I play with the simulator, that's where I get the largest jump between 100% and 25%, and then again below 9%.

With util that high a couple of things are happening in loan review:

1)  your DTI is higher meaning it make lenders a little more nervous with a lower score

2)  your score is lower

I can bump my score 60 points just by having under 9% utilization.  The minute I go over that, my score trends down.

Good luck on house!!

[kashley6405]

Unfortunatley there is no way financially I can get it down to between 1% and 9% by the 23rd of next month.  I could possibly make another payment to get one card down to 30% uti, leaving one at 52% uti. 

Would that be more beneficial or would I just be beating a dead horse and it wouldn't matter since one is still over 52%. 

I MUST have 2 more points on my score.   

I so so wish I would have been more credit alert before I started this process.  I had the score then so I didn't think anything of it. 

Ugggg!