confused about rebuilding credit with use of credit cards. Please help explain.

[Anonymous]

Thank you in advance for taking your time to read.

I am currently attempting to rebuild my credit. My current scores are: EXP 672/TU 660/EQ 640 as of the 20th oh this month.

Long story short, I made some mistakes with late payments on credit cards, last late payment was 16 months ago. Since then I have paid them completely off and use them sparingly and pay them right off again. I've been told some conflicting information and pretty confused as what to do.

I was told that I should use my credit cards monthly and make payments monthly to improve my score. Someone else explained I should charge something small monthly and then completely pay it off before I receive the statement. Then Inread that I should carry a little balance each month. I have been slowly gaining points over the year and it's been very frustrating. I have total of 4 credit cards, small credit lines. $300/$500/$550 and $1250. Should I use all 4 cards monthly and pay them off or carry a balance of 1%? I had a inactivity on my $300 credit card that brought my score down by a few points...should I charge something to show activity, or would that decrease my some more by few points?

I do have a student loan account and also a revolving credit account in good standings. Never been late on those accounts.

Recently pulled my credit and found 3 medical collections from 2013 that I was not aware went into collections. Tried to rectify with original creditor but they said they could not help me. I am in hopes of applying for mortgage loan, however wanted to clean up my credit and increase my fico score by at least 40 to 50 points, is that even possible seeing that a loan officer told me to not pay the collections because it would harm my score even more.

My total utilization percent is 46% including all my loans/credit cards.

Which would be the best way to approach to increasing my score? Is it possible to gain 40-50 point jump?

I also hired a credit repair per the recommendation of a mortgage loan officer as I have some old bank statements that show I've made payments when the credit card companies stated I was late. Unsure if I made the right choice as to working with credit repair as I have heard some horrible things.

Would the best way to gain points is through the use of credit cards? Feeling confused and frustrated about not having better knowledge regarding credit.

Any advise would greatly be appreciated. Again, thank you.

Kathryn

[Anonymous]

Hello Frustrated welcome to the board.

From what you have explained about your current situation and what you want (40 point or so increase in score), here are my thoughts.

1. The medical collections will probably increase your score the most if deleted. You will need to research this board, there is plenty of information on how to negotiate with collection agencies to have to collection trade lines removed from your report.

2. You indicated you had some paid 30 day late on your credit cards? How long ago? Regardless, it would be worth negotiating with you credit card lenders asking for forgiveness. See if they will remove the late payment off your credit report. There is also information on this board about how to go about that as well. Search feature.. The probably will not work for a closed account. In that case, you would need to go into dispute mode with the Credit Reporting Agencies.

While the above items are on you credit report, it will feel like trying to get in your locked house without the key. Slow, frustrating, beating yourself up, for hardly any progress.

The next items are what you can continue to do. It might help some, and will be a slow journey while the above collection and delinquency's are listed on your credit report.

3. Continue to use your cards, pay on time, best to pay in full each month if you can. It isn't necessary maximize score every month by having all but one card reporting reporting 0 balance. It has been advised on this board for the best score one card reporting less than $100 balance and the rest 0. However, it is just a snapshot in time from month to month, so you really only need to use this tactic before applying for a loan. Use your cards, for stuff you would buy anyway, pay on time, pay in full if possible.

4. You already have an installment loan, so pay on time for that as well.

5. You have low limits on your cards.. Of the cards you have solid history, consider asking for credit line increase. This would help with utilization if you would have to carry a balance, which would stabilize your score somewhat month to month.

This is all I can think of at the moment. Anyone else have some additional input?

[Anonymous]

Thank you Slimshady66 for your response and advice, greatly appreciated.

Answer to your question:

The last time I had a late payment recorded onto my credit was 16/17 months ago. I fully take ownership of the late payments, actually they were more than 30 days past due, 1 showed 120 days past due and the others were 30 days, 60 days and I believe 90. (Although there are no excuses as to the lates, I for sure thought the credit card companies would work with me. I had my car broken into while I went for a run after work, myself and a coworker got our cars broken into. I foolishly left my work bag in the back seat, didn't think too much of it as it had my scrubs, Stethoscope and shoes in it. Well, that was the perfect opportunity for my car windows to get smashed into and all my belongings stolen. Included in that bag was my wallet with all my credit cards and debit card. As soon as we got back to our cars and noticed what had happened, we called the police. When I got home, I called all my banking institutions as well as all the credit card services advising them what had happened and my cards have been stolen. The damage already started happening as the person/people already racked up all my cards, I did have little balances on them previously, however they didn't waste no time to get to the mall and start charging and to a gas station and make numerous transactions. 1 card services thought it was suspicious so they froze the account. Thinking that I reported my cards stolen, giving my police report information and couple weeks to close to 2 months of waiting for new card to arrive and sending back and forth an affidavit that I was ok, I wanted to make sure that the amounts that were charged I wasn't responsible for. 1 credit card company credit one was very difficult about it, regardless I ended up paying everything on all 4 credit cards, after few months of going back and forth it wasn't worth it, so I ended up paying. Thought everything was good. But after pulling my credit, they all reported lates during that time. 2 was nice enough to only report 30 days and stopped reporting. But credit one was gracious (sarcasm ) and reported me 120 days late while I was going back and forth with affidavits.) Ok, whatever, I'm not sure how to fight those negatives. And i did indeed not pay until my old cards were closed and new ones issued, and trying to get affidavits that some of the charges were done fraudulent. But, I assumed the creditors were working with me and didn't realize they reported me late all along.

The medical bills, I am not saying I do not owe. I would like to know what I am paying andvwhat is being charged. The collections reported in 2013. I found out when I pulled credit. I called the original creditor which happens to be a hospital and wanted to discuss the account and wanted to rectify. The young lady was rude to say the least, made me feel like a scum ball who doesn't pay my bills. She attempted to tell me that she no longer could help me as I never paid my bill that was sent. I tried to explain that as a nurse myself I wanted to rectify the bill and pay the rendered services if she would tell me what it was and when it was. Clearly, I was not getting anywhere. She told be to deal with the collection company.

The only thing I can think of was in 2013, my daughter had broken her ankle was taken to the ER, however I did get invoices from hospital billing stating that "this is notva bill" actually, I received several. I also received correspondence from my insurance of my EOB and the amount that was charged, the amount paid and the total adjusted amount. I assumed it was paid as I didn't receive another invoice from hospital and my EOB showing the charged, the paid amount and what was adjusted. I never gave it another thought. Then about 6 months or so later I get a collection notice stating that I had a bill for $30, they sent it few times however I disputed and provided a bank statement that showed the amount paid, to the original creditor at time of service. I didn't get any other communication so I thought all cleared. Until I pulled my credit for mortgage.
I was upset needless to say. The collection appears to possibly be the bill for my daughter, however it's several broken up accounts totaling $1,500 dollars, could this be the adjusted amount? Honestly, I am unsure of exactly what is owed. My mortgage lender advised me not to pay right now as it would further damage my credit score.

I feel like crying, as a single mom, I've worked real hard for my credit and to purchase a home to only find out I may not be able to.

I want to do the right thing, but at this point In am unsure what to do. Having these negatives on your credit is embarassing, not to mention people view you like you don't pay your bills. Which on the credit report it appears that way, however sometimes there are honest mistakes that happen.

I did sign up with a credit repair services that my lender suggested to help me fight the negatives, but who knows how long that will take or if this all can be cleared up. Otherwise, I have been diligent with all my payments being on time. Really bothersome to find all of these negatives on your credit and make you look like an idiot in front of your lender...I'm sure they've heard every excuse or reasonings behind why their credit is the way it is.

My credit is EXP 672/TU 660/EQ 640 how long before I can start to gain points back? I would really like to buy house here shortly as I have been looking. Or do I wait until it falls off or gets older. I feel like I'm fighting a losing battle. Unsure what the credit repair company is doing for me as I have had no communication with them since I forwarded all my credit information, police reports, bank statements. I just need to go back few years on my EOB if it's even the same medical bill and forward the reapir services the info. I didn't save any of the invoices that stated "this is not a bill" because I thought it was not important to. Boy, was I wrong.

Thanks for letting me vent and explain my frustrations.

Unsure, what to do next...but definitely need to bring my scores up. Would paying my utilization percentage down from 46% to 30% help?

If I ask my credit card companies to increase my limit, would they do a hard pull on my credit and would it decrease my scores even more?

Feeling stuck.

[Anonymous]

Depending on who your cards are through - it is often a soft pull to increase your credit lines and doing so would definitely help your utilization.

Yes it helps to lower your UTIL to 30% and to get the best score - have one care report less than 10%, BUT remember that is only a snapshot in time - you only need to do that in the few months prior to applying for your mortgage.  

Search GOODWILL letters - and see if you can send some to the credit cards - along with copies of the police reports and affidavits regarding the time your cards were stolen.   You might be able to get them to GW the lates that way.   (However the one stubborn card may not, since they weren't so helpful anyway).  You'll want to send those letters to the executive offices, not just some front line rep.

Keep paying everything on time.    

Search the HIPAA process on Google (WhyChat) I think is the thing...... anyway - follow that process to see if you can delete the medical stuff.   

[Anonymous]

Thank you, will try those things.

[Anonymous]

I wouldn't feel to bad. I have declaired bankruptcy twice in my life and recovered both times. Your senario is certainly better than mine, lol.

I have seen mention of the HIPPA and know some guidlines, but have never researched or used it to have a medical collection removed. That is worth a look. In the event you are unable to remove with that route, I suggest dealing with the collection agencies and paying them some or all of the owed money, but only with agreement to have have the trade line removed. never pay a collection without that agreement, they will take the money, report collection paid and leave the collection on your report.

I wouldn't know how to deal with your theft incident. Seems to me a police report would have been enough to freeze the accounts from a payment perspective, until rectified. I have never experienced that situation. But going back and trying to fix a year and half later may be fruitless, unless lawyer is involved. You can take other steps before it comes to that. Depends on your situation, money, time etc. 

[Anonymous]

Slimshady66; I paid all the accounts with the credit cards when all this had happened about 17 months ago as I was pretty frustrated and wanted to get it just taken care of and over with. But again, I should have known better. I am working with credit repair company , just signed on with them. I forwarded all information so hopefully they can make some head way. I didn't know you could challenge things on your credit report until recently. It's worth a shot.

I will challenge the medical accounts as I want to know exactly what it is and if theyre charging the adjusted amount or what it is. 3 collections total. So, I would like to think it's not that doomed to pull out of this.

Again, thank you very much for all your info. Will keep updated.

[Anonymous]

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@Anonymous wrote:
Slimshady66; I paid all the accounts with the credit cards when all this had happened about 17 months ago as I was pretty frustrated and wanted to get it just taken care of and over with. But again, I should have known better. I am working with credit repair company , just signed on with them. I forwarded all information so hopefully they can make some head way. I didn't know you could challenge things on your credit report until recently. It's worth a shot.

I will challenge the medical accounts as I want to know exactly what it is and if theyre charging the adjusted amount or what it is. 3 collections total. So, I would like to think it's not that doomed to pull out of this.

Again, thank you very much for all your info. Will keep updated.

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As noted above, don't worry too much about trying to maintain that perfect UTI - for the most part just keep your cards from reporting as maxed out and you'll be fine. Do the max UTI thing whenever you are getting ready to app for new credit in order to peak your scores.

Even with major derogs in your files its possible to get respectable scores in the low 700's. It just takes time. Remember this is a marathon not a sprint.

[Anonymous]

Thank you NormanFH...

I seldom use the credit cards and they all have a zero balance. The only account that has a balance is a revolving installment account that's about 15 months old.

This is where I get confused and I apologize in advance if it sounds repetitive. I was under the understanding that the utilization should be lower to obtain a better credit score and file.
I do not have much credit. All credit card accounts (4) and my installment account combined is $11,700 thats credit available, however the credit cards are at zero, but my installment loan has a balance of $5345.00 remaining. Which is anout 46% utilization. I've read that ideally it should be below 30%.

I guess I was hoping for a quick fix by decreasing the utilization and gaining some points back onto the credit. I'm learning that this will take a little bit of time to get back into the 700's. I suppose I freaked out seeing the credit score drastically low and I was shopping around for a mortgage loan. Indeed, I've ran many marathons to know it's a steady pace...

Will work on one thing at a time, rather than attempt to fix everything at once.

Thanks for your comment and suggestion. Appreciate it.

[Anonymous]

Installment loans don't factor into the utilization.  they are figured separately.

If all your cards are at $0 - it looks like you don't use them.  Let ONE card report a small balance each month (less than 10% of UTIL) and you'll get a bump.  (I know that my score varies by like 25 points as to if I let a balance report or have all at 0 - However YMMV)  

You might also get a bump by paying your installment loan down - but to what percent I don't know.....I know if you pay it all the way off you get dinged for paying it off (at least in the short term)