topic Re: I NEED HELP in General Credit Topics

I NEED HELP

Anonymous — Thu, 01 Nov 2007 16:18:59 GMT

Last year around this same time, all three of my fico scores were in the mid 600's. Today, my credit scores have fallen signifigantly: Experian - 535 Transunion - 535 and Equifaz - 578. I have opened two credit lines in the last year: Target - $200 credit limit & Visa - $500 credit limit. I have only had one late payment between the two credit cards and both cards have balances. I have three student loans with a balance of $11,000. The loans have all been deferred until December of this year although I have been paying on them monthly. I have 2 accounts in collections totalling $300 (I already know that I have to pay these off very soon).

I am in the process of buying a home but before I do that, I would like to know what I can do to get my scores back up and how long should it take? Could I see a difference in 3 months?

Re: I NEED HELP

SmartCookie — Thu, 01 Nov 2007 16:36:08 GMT

Welcome COSMA_NOT! Please start here: http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654 and yes, that means you.

Call both Target and Visa and see if they can give you a CLI without a hard INQ. You might wait on this until your reports look a little or a lot better.

Don't apply for new credit until you do some clean up. Hard INQs lower your FICOs for a year, and the more you have, the worse it is.

If you acknowledge those 2 collections accounts and they are within collecting SOL and also not due to drop off soon, send them a PFD letter. No delete, no pay. Wash, rinse, repeat until they agree.

Call regarding the late CC payment and ask if they will fix that as a GW courtesy to you. If they say no, write a letter requesting it. They do not owe you this, so be nice.

Never be late on anything, especially a Student Loan. That is the hardest thing to correct.

Pay down your current CCs to less UNDER 10% of the CLs and keep them that way. Even if you charge more than that during the month, make a payment BEFORE the new bill generates so that the new charges will post as under that 10% of total CL.

Welcome again, read and post!

Re: I NEED HELP

Anonymous — Thu, 01 Nov 2007 16:41:17 GMT

Hi Cosma, welcome to the forum. Here you will find a wealth of information, and very knowledgeable people to answer your questions.

The collections are hurting you badly. Write them a PFD letter(Pay for Delete). (Examples of all kinds of letters found in "frequently requested threads" in the Understanding FICO scoring.

What are your balances on each of your credit cards, and the limits? Potential lenders love to see low balance to cl(credit limit) ratio. It is called utilization.

Read, read, read. Educate yourself. Knowing how to repair/rebuild your credit is not intuitive. And often, what seems logical is, in fact, not.

Good luck to you.

Re: I NEED HELP

Anonymous — Thu, 01 Nov 2007 18:30:13 GMT

Well, the credit limit on my Visa is $600 (I think I said $500 before) That card has an outstanding balance of about $578. My target card has a $200 limit - That card has an outstanding balance of about $166.

So you mean I can write the company a PFD letter and they will remove it from my credit report once I pay it off? Wow. Thanks guys, I'm going to do this immediately.

Re: I NEED HELP

Anonymous — Thu, 01 Nov 2007 18:31:28 GMT

Just curious....what is a GW courtesy? Will I do this through the company that I owe or through the credit bureau?

Re: I NEED HELP

SmartCookie — Thu, 01 Nov 2007 18:42:07 GMT

You must read the start here Credit 101 info grasshopper. Be back for more questions in a bit.

This link is for all info on GW, PFD... all the Frequently Requested Threads http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=6834

Message Edited by SmartCookie on 11-01-2007 02:42 PM

Re: I NEED HELP

Anonymous — Thu, 01 Nov 2007 18:46:34 GMT

1.) Pay down balances to 30% or less

2.) write a GW (goodwill) letter to whom ever you were late with and ask for them to adjust it (due to you being such a great customer and loving their store/products)

3.) Write to collection agencies and request a PFD (pay for delete). If they do not agree to delete, don't give up and keep trying!!

4.) for any questions about "how do I or what do I say when...." have answers contained in above listed link from previous poster.

5.) don't give up

6.) be persistant - keep at it.

7.) a "no" only means "no, at this time" and many have had successes from trying over and over and over again.

8.) When you think it's not working, return to boards for inspiration and success stories! (It really does work)

9.) This will be hard work (think of studying for SATs or something similar..... it takes time and practice)

10.) All of the above

Re: I NEED HELP

SmartCookie — Thu, 01 Nov 2007 18:47:04 GMT

COSMA_NOT wrote:
Well, the credit limit on my Visa is $600 (I think I said $500 before) That card has an outstanding balance of about $578. My target card has a $200 limit - That card has an outstanding balance of about $166.

So you mean I can write the company a PFD letter and they will remove it from my credit report once I pay it off? Wow. Thanks guys, I'm going to do this immediately.

On your Visa, you want to make sure that each month, your new statement comes in at under $60 and on your Target, new statement comes in at under $20. That sum is the ideal so get there as soon as you can. Also, that means any carry over charges PLUS new charges combined. When you go over that amount, your FICO is negatively impacted.

Does that mean you can only charge $80 each month between the two cards? Usually no. Most CCs report to the bureaus on the statement date. But not all... so double check. If your cards are like most and they do report on the statement date, just make sure that you do at least bi-monthly payments. One before the closing date to hopefully pay off all that is current, and the other after the new bill comes in and well before the payment due date.