Understanding FICO® Scoring

[bethany]

Hi!  Ilecs suggested I repost this from the FICO challenge board.  

I'm looking to repair my credit from a nasty (divorce-like) breakup.  I have made some progress but I have a long way to go.

I know the basics - pay down balances, never make another late payment.  But I'm hoping someone on here can help point me in the right direction.  Is there anything more I can do to help speed up the process?

Thanks in advance for your thoughts!

B

copy/paste of my other post:

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hello!  an update:

my score is up from when i started the challenge, but i still have a long way to go.  i've been reading like crazy but sometimes i'm still not sure exactly what to do in my situation, so here are my details, anyone who is willing to advise, it's much appreciated:

Credit Cards:

 - Chase #1 - opened 2005.  closed by creditor.  balance is $508.  credit limit is (was?) $1000. pays as agreed.  last late payment nov 2011. 

 - Chase #2 - open 2004.  closed by creditor.  balance $993. CL $1100. pays as agreed.  last late jan 2012.  

 - Bank of America #1 - open 2000. closed by creditor.  balance $1,606. CL $1300.  pays as agreed.  last late jan 2012.

 - BOA #2 - open 2005.  closed by creditor.  balance $1,937.  CL $2000.  pays as agreed.  last late feb 2012.

 - CitiBank - open 2007.  closed after paying off with less than full balance.  balance $0.  CL $1500.  pays as agreed.  last late july 2011.

 - just applied/ was approved for a Capital One secured card - limit $200.  deposit $49.  haven't gotten it yet, hasn't reported yet.

Store Credit Cards:

 - (store card) BR - open 2006.  open.  balance $0.  credit limit $124. pays as agreed.  last late feb 2009.  

 - (store card) VS- open 2004.  charged off/ sold in dec 2009.  currently shows up as "pays as agreed"

 - (store card) Firestone - open 2004.  open. balance $0. CL $849. pays as agreed .last late july 2007.  

 - (store card) NYC. - open 2004.  open.  balance $0. CL $670.  pays as agreed.  NO LATES! (my only one! oi!)

Collections:

 - Portfolio (VS card) - went to collections 2009.  balance $364.  shows as 120+ past due.

Auto:

 - Heartland - opened 2008.  current balance $2,393.  starting balance $16,556.  pays as agreed.  last late march 2012.

Mortgage:

 - Bank of America - opened 2007. current principal:  $99,845,  beginning:  $105,839, pays as agreed.  last late july 2011.

So, obviously, I am paying things down as much as possible, but I'm not sure the best order to pay them off.  Right now I'm working on highest interest rate first, and doing the "Roll Down" method.  I don't have a lot of extra money to pay things off faster.    Should I pay off the collections first? Suggestions?  

Also, I applied for the secured card to have at least one revolving account that is actually open, because I figure since all my others are closed, paying them off won't really show more available credit.  Any other thoughts on this?

My short term goal is to get to 620 so I can hopefully refinance my mortgage to get my ex off of the loan.  But my long term goal is to just get my credit back into good shape forever!

Thanks for feedback in advance!

B

[Revelate]

Hey Bethany,

Minimum payment on everything: any additional funds to the highest interest rate.  Roll down in my opinion is the right way to approach this.

Collections: skip for now.  Wait till you can pay it completely, and offer what's called a Pay For Delete (PFD, check rebuilding forum for more information).  If you can't get them to PFD, you may need to pay them in full before being able to re-fi, but collections are effectively 0% interest unless you're getting assessed with fees, and whether you pay them now or later makes no difference at all for FICO purposes.

Your store cards count as revolving, but the secured cap one was a good move as well.  You probably don't need another bank card at the moment, just go with what you have.  Open mortgage and auto loan, no need to add any other tradelines for that matter.  Anyway, It's not going to be a quick process, and unfortunately time passing is the way to go.

I would also suggest reading up on Goodwill letters (GW), once you have some of the creditors paid off, you may be able to get them to remove some of the lates... though YMMV on any recent late, but some of the older ones, might work.  Another long process, but time is what you're stuck with anyway as rebuilding takes a while.

[bethany]

Thank you, Revelate!

This was exactly the kind of info I was looking for.  

Patience, perseverance, more patience...

B