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As far as FICO is concerned a collection is a collection. It makes no difference if it is paid or not--your loan officer will think differently about this of course. If it is not too late I would attempt to arrange for a PFD (paid for delete) for as many collections as you can.
Lowering your credit card bills from maxed out to below 50% utilization should have a big impact. If you would like more specific advice you can post the limits and balances on each of your cards and better advice to sqeeze out some points can be provided.
Good luck!
i have two first premier cards. one limit is 350 balance will be 150 by end of sept. other limit is 200 balance will be 75 by end of month. The next card is orchard bank. limit is 200 balance will be 75. next is credit one bank limit of 350 balance will be 200 by end of september.
my husband has a car laon, paid on time every month. a fingerhut card. limit of 400 balance of 300. best buy card limit is 600 balance will be 500 both these cards will be at those balances by end of the month. he has a first premier card that it 350 that will be lowered to 150. an orchard bank card with limit of 200 that will be lowered to balance of 100 or less and an continental bank that has limit of 375 that will be lowered to 150 balance.
all these cards were maxxed out or over limits when we applied for loan. so in the next month we will be paying them all under the 50% mark.
i know the old collection wont raise my score, but will affect the banks ability to give us the loan, once they are settled.
my middle score was 611, and my husbands was 587. can lowering this credit card debt raise our point? im looking to raise mine 25-50 points, and my husbands by about 50-60 points. what should i do to make sure this raises the points? like i said we are in a time crunch and hoping to get in a house by dec 1.
You could probably raise your scores by the necessary amount, but you will have to pay you accounts way down. You will still have too many accounts maxxed out (or close). Fico looks at both individual card utilization and overall utilization. Here is what i have based on your post:
You:
FP#1 350 limit 150 balance 43% utilization
FP#2 200 limit 75 balance 37.5% utilization
OB 200 limit 75 balance 37.5% utilization
Total 750 limit 300 balance 40% overall utilization
Husband:
Fingerhut 400 limit 300 balance 75% utilization
Best Buy 600 limit 500 balance 83% utilization
FP 350 limit Balance 150 43%
OB 200 limit 100 balance 50%
Continental 375 limit 150 balance 40%
Total: 1925 limit 1200 balance = 62% overall utilization
To help your scores you are going to have to pay these way down. Ideally you would like to have less than 1/2 or the cards reporting a balance. How much $$ do you have to work with for paying down cc debt? At the very least you should pay off your 2 $75 balance cards and your husbands 100 and 150 balance cards. ideally you would only have one card reporting a balance (1 out of 4 cards) and your husband would have up to 2 out of 5 reporting a balance. TO do this you would need $700.
Good luck.
This is my plan:
Sept 11 Pay off two of my four credit cards
Sept 25 PAy off One out of 5 of my husbands cards
Oct 9 Pay off the 3rd out of 4 credit cards
Oct 9 pay off 2nd out of 5 of husband credit cards
October 23 pay off 3rd and 4th of husbands credit card
Oct 23 pay best buy. Limit will be 600 balance will be 250-275.
This will pay off 3 out of 4 cards, with the 4th card being under 50% balance for myself
This will pay off 4 out of 5 cards for my husband..leaving just the best buy account which will have limit of 600 balance of 250-275.
The collections account will have all been settled, and Im away this may lower our scores as they are opening new debts etc. However, will paying on all these cards help? Can you estimate by how much?
It is very hard to guess how much the scores will change. However, you do not need a large jump and you are paying off a lot of debt. I think you have a very good shot at your target score. The earlier you pay all this off the better as it may take some time for everything to report. If you have not already I would certainly try a PFD or good will letters for your lates/collections. The worst that can happen is they say no.
Good luck.
Make sure you fully understand the details of the first time home buyer tax credit:
http://www.federalhousingtaxcredit.com/2009/faq.php
You need time to properly address your CBR issues. Being under a time restraint will hinder you. It moves control of the issue solidly to the other side of the table.