new, help rebuilding credit

[jdl3]

HI All,

I am new to the forums and would like some advice regarding 2 charge offs and a defaulted student loan.  The two charge offs are from key bank with balances of 5,200 on each.  I have been making payments of 200 dollars a month on each account but key bank will not update how they are reporting.  Should i continue paying these?  My student loan was defaulted with nelnet and my loan was picked up by a company called emmc.  I rehabilited my loan by making 12 payments in a row and my student loan was now sold to a new lender.  I have been current for 5 months.  However when i review my credit reports, i see that Nelnet and ACS are both listing them as charge offs. 2 accounts a peice for a total of 4 charge offs on my reports. I also have some collections showing which are all paid in full, I have asked the collection agency to delete these records with no luck.   What is the best course of action going forward? Im currently at a 570 with zero credit card debt (used to be 6k) a mortgage in good standing along with a car loan in good standing.  I have not had a late payment in 5 months but i feel that my score will not improve due to the above charge offs, defaulted loan and missing payments.  Any advice would be apprecaited.

Thank you

[DaBears]

Hi jdl3 and welcome to the forums!!! Charge-offs are major derogatories and will affect you scoring for nearly the entire 7 yrs. Once you made the final payment to them it should update to paid was a charge off. I would send GW letters once the charge offs are paid in full to seek removal. Student loans I am not fimiliar with im sure someone can chim in on those. 

Community Leader, 

DaBears

[guiness56]

You say no CC debt.  But do you have current CCs?  You really need revolving.

[jdl3]

Hi and thank you for the reply.. Yes i do.  I have 3 cards open, discovercard, capital one, and and Amex.  all have credit limits of 3,000.  I use them throughout the month but pay in full whatever i charge during the month. I just recently about 3 months ago got them down.  I previously was at about 90 percent debt to available credit for 3 years.  Any help is much appreciated.

Thanks

Jonathan

[jdl3]

Thank you for the reply.  I am hoping to get both key bank charge offs paid off before next march, then i will begin the good will letter process.  I was hoping that since i am making 400 dollar a month payments to keybank that they had to remove the charge off staus as that money is being repaid.  As far as student loans go, i hope someone can provide some advice on that topic.

Thanks again

[guiness56]

Don't let all of your cards report a 0 balance.  FICO doesn't like to see all of them at 0.  Let 2 report 0 and the other at 9% or below.  You can switch which one you have reporting so they all get used.

Charge whatever you like just make sure to have it at 9% or below on the report date which is usually around the statement date.  Then you can pay in full before the due date to avoid interest charges.

This will give you an optimal FICO score.

[guiness56]

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@jdl3 wrote:

Thank you for the reply.  I am hoping to get both key bank charge offs paid off before next march, then i will begin the good will letter process.  I was hoping that since i am making 400 dollar a month payments to keybank that they had to remove the charge off staus as that money is being repaid.  As far as student loans go, i hope someone can provide some advice on that topic.

Thanks again

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Once a CO, always a CO.  It will just report as paid.  If it is factored into utilization you may see a bump when paid off.

[jdl3]

thanks.  I will def try this going forward