What I thought was the worst thing that happened to me, it has actually been one of the best things. I got in a car accident mid June 2007, it wasn't my fault, but unfortunately my car, which was paid for was totalled. At the time I had a credit score of about 550/560. I had planned on getting a used car because I didn't want a car payment, but it ended up that I didn't trust any of the cars I looked at. So, I decided I wanted a newer car. My credit was a huge issue because I didn't want a buy here pay here "deal" nor did I want a car loan with 30% interest (they do exist).
My journey began the last week of June, my faith urged me to take the money I got from my totalled car and pay off my bills. I only had 3 credit cards and 2 collection accounts BUT I also had just paid off a bankruptcy. Although it was discharged in March 2007, my credit still looked bad. I applied for Capital One, Roadloans, and e-loans and was denied by all three. I found out through this board that if you have a bankruptcy and the creditors were paid (not what they wanted put paid from the bankruptcy and it is discharged), then the credit limit nor the balance should reflect anything else but ZERO (high balances have major impacts on your score). So I started doing disputes through all three bureaus. It didn't take as much effort as I thought, on my disputes I just put "included in bankruptcy, balance should be zero" I didn't worry to much about the credit limit plus you don't have that many characters to put in the dispute line. As a result, my score went up about 10 - 15 points. Good. Now the credit cards. I had 3, one for $350, $300, and $500, and they were all maxed. I paid them off but worried it wouldn't report to the credit bureaus in a timely matter, by the way, I choose to rent a car while all this was going on so I wanted everything to hurry up and post to the bureau's and QUICK! After I paid off the balances, I decided to dispute the credit cards I just paid off to the bureaus saying the balance was incorrect - and although they were as I had JUST paid them off, I don't recommend doing this - it bit me in the behind. I called my credit cards and found out they ALL report at the end of the month BUT (very important) my report updates on my CYCLE date. So at the end of June credit card #1 reported to the bureau but my credit report didn't update until my cycle date (at the top of your credit card bill), which was July 20th. By July 18th, my credit card reflected the zero balance, but my score didn't update right away because I had that stupid dispute logged regarding the balance. Now I know, lessons learned.
So the good news is that my credit cards and collection accounts (totalled only $100 forgot to put on bankruptcy in 2003) were paid about June 29th. Today, July 26th, my FICO score is 638!!!! I can't believe it. I IMMEDIATELY applied for Capital One again and typically CO gives high risk loans to RoadLoans, but they approved me through Capital One!! I'm so excited. My monthly rental is over next week and I'm getting a new car! I was approved for $26K (I applied for $25K). When I get my settlement from the car accident (it won't be that much), I want to pay the car loan for 6 mos as the normal payments and then make a huge payment (from the settlement funds) and try to refinance. I really don't want a long term car payment. Oh, my interest was high at 13% BUT I remember when I got my previous car, it was higher than that and I didn't have a bankruptcy, so that's not too bad. Plus, I'm just happy I wasn't denied.
I must admit, I'm a little crazy about checking my credit score. It's addictive. Glad though that the only things on my credit report are student loans, and a VERY high interest loan I need to pay off like tomorrow for $2500, and now it'll have my new car loan.
God really blessed me to think smart, and do right. I pray everyone will get the score they want and be smart about their credit. Bankruptcy taught me a lot. I don't regret it as much and glad it's over.
Thanks to all of your for your stories! They totally helped me meet my goal!
Oh very important, when you put in disputes with the credit bureau, your score may go down automatically because a dispute tells your credit report the item doesn't exist. So, when the dispute comes back corrected it essentially adds it back to your report, so your score could drop just as fast as it went up. It all balances out if your dispute was legitimate (i.e. balance incorrect, or paid off item) but that was nerve wracking as at one time I went up to 596 but then something from a dispute cleared and was "put back on" my credit report, and my score went down to 588. I was pissed because I was 4 points from a 600! But now I'm cool. Oh, and there is one collection account that still hasn't updated and is in a dispute status. So if my car loan take my points down a bit, that 6 year old collection account being paid should help with that. I'm so happy.