topic Re: a litle bit lost... in Rebuilding Your Credit

a litle bit lost...

Anonymous — Wed, 18 Mar 2015 16:13:40 GMT

Hi guys,recent lurker, first time posting, I need a little bit of guidance. I honestly have never really paid attention to my credit report before, I have looked at it a few times, but never really got how important it was until recently. I had a friend who works in finance give me a reality check of exactly how much money I waste a year paying fees and interest. So I am making changes to get things under control.

The first thing I did was send letters asking for debt validation, based on the advice of my friend, and disputed a lot of things on my credit report. Since I wasn’t aware of my credit situation before, I had no idea what was valid, what wasn’t, etc. Quite a few things were removed from my Transunion report, I went from 9 baddies to only 4.

Transunion: what’s left.

Baddies:

Helzberg Diamond card: Original charge off amount $748

In dispute, account was changed from >charge-off< to >account paid in full; was a charge off< - What does this mean?

Capital one - 60 day late

Capital One - 30 day

Macys - 2 30 days late, one in 2014, 2013

I think the only way to remove these is goodwill letters; is that correct?

I am awaiting the results to my Experian and Equifax disputes results, but I will absolutely post when they’re finished. They are both due in a day or two.

Here is my current situation:

Best Buy: $369.53 | CL: $500 | Min pay: $25 | APR: 24.24% - opened 12/08

Capital One: $431.56 | CL: $500 | Min pay: $25 | APR: 22.90% - opened 1/08

Capital One/Orchard Bank: $0 | CL: $300 | Min pay: $25 | APR: 29.40% - opened 9/10

Chase bank: $299.27 | CL: $500 | Min pay: $25 | APR: 13.24% - opened 10/06

Chase/Amazon: $960.45 | CL: $1,000 | Min pay: $25 | APR: 18.24% - opened 5/12

Discover: $497.03 | CL: 1,000 | Min pay: $25 | APR: - opened 12/14

Macys: $0 | CL: $100 ¥ Min pay: $25 | APR: 24.50% - opened 10/08

Nordstrom: $453.26 | CL: 2,000 | Min pay: $25 | APR 22.99% - opened 4/12

PayPal Credit: $860.19 | CL: 1,000 | Min pay: $25 | APR 11.99%

Target: $899.31 | CL: $1000 | Min pay: $25 | APR: 22.90% - opened 11/11

Loan:

US Bank Auto - $2464.34 | Monthly: $212 | APR: 16.29

According to Discover, my FICO score was 618 last month before my disputes and now it is 636.

I wanted to ask what steps I should take? Should I pay off the collection account I have, or should I work on paying the credit card balances down? What do you all feel the best method, paying smallest balance first, or paying highest apr first? Should I close anything I don’t really use? I have used my best buy card exactly twice, I used it recently to help with a large purchase when my fridge went out.

Any advice is absolutely appreciated, I am a beginner. I am planning to use this post to keep me motivated and also show my progress.

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 16:42:03 GMT

The single most important and most impactful thing you should do right now is get those balances paid off. Your utilization is extremely high and is having a seriously negative impact on your score. Pay the highest interest cards off first. Don't close any of them until all are paid off. Leaving them open for now helps your utilization.

Re: a litle bit lost...

MarineVietVet — Wed, 18 Mar 2015 17:31:06 GMT

@Anonymous wrote:
Hi guys,recent lurker, first time posting, I need a little bit of guidance. I honestly have never really paid attention to my credit report before, I have looked at it a few times, but never really got how important it was until recently. I had a friend who works in finance give me a reality check of exactly how much money I waste a year paying fees and interest. So I am making changes to get things under control.

The first thing I did was send letters asking for debt validation, based on the advice of my friend, and disputed a lot of things on my credit report. Since I wasn’t aware of my credit situation before, I had no idea what was valid, what wasn’t, etc. Quite a few things were removed from my Transunion report, I went from 9 baddies to only 4.

Transunion: what’s left.

Baddies:
Helzberg Diamond card: Original charge off amount $748
In dispute, account was changed from >charge-off< to >account paid in full; was a charge off< - What does this mean?

Capital one - 60 day late
Capital One - 30 day
Macys - 2 30 days late, one in 2014, 2013

I think the only way to remove these is goodwill letters; is that correct?

I am awaiting the results to my Experian and Equifax disputes results, but I will absolutely post when they’re finished. They are both due in a day or two.

Here is my current situation:

Best Buy: $369.53 | CL: $500 | Min pay: $25 | APR: 24.24% - opened 12/08 74%

Capital One: $431.56 | CL: $500 | Min pay: $25 | APR: 22.90% - opened 1/08 86%

Capital One/Orchard Bank: $0 | CL: $300 | Min pay: $25 | APR: 29.40% - opened 9/10

Chase bank: $299.27 | CL: $500 | Min pay: $25 | APR: 13.24% - opened 10/06 60%

Chase/Amazon: $960.45 | CL: $1,000 | Min pay: $25 | APR: 18.24% - opened 5/12 96%

Discover: $497.03 | CL: 1,000 | Min pay: $25 | APR: - opened 12/14 50%

Macys: $0 | CL: $100 ¥ Min pay: $25 | APR: 24.50% - opened 10/08

Nordstrom: $453.26 | CL: 2,000 | Min pay: $25 | APR 22.99% - opened 4/12 23%

PayPal Credit: $860.19 | CL: 1,000 | Min pay: $25 | APR 11.99% 86%

Target: $899.31 | CL: $1000 | Min pay: $25 | APR: 22.90% - opened 11/11 90%

Overall utilization=60% (4,770/7,000)

Loan:
US Bank Auto - $2464.34 | Monthly: $212 | APR: 16.29

According to Discover, my FICO score was 618 last month before my disputes and now it is 636.

I wanted to ask what steps I should take? Should I pay off the collection account I have, or should I work on paying the credit card balances down? What do you all feel the best method, paying smallest balance first, or paying highest apr first? Should I close anything I don’t really use? I have used my best buy card exactly twice, I used it recently to help with a large purchase when my fridge went out.

Any advice is absolutely appreciated, I am a beginner. I am planning to use this post to keep me motivated and also show my progress.

Hello and welcome to myFICO.

I agree that paying down/paying off those credit card balances is probably the quickest way to help your scores. You are getting dinged several different ways because of them. Scoring looks at both overall utilization and individual account utilization plus how many accounts are reporting a balance at the same time.

I highlighted in red what the utilization is on each card plus overall. Several accounts are maxed out and that is a redflag also.

How to best pay them down/off is up to you. There are different approaches to this. Some say, and there is much validity to the tactic, to pay down the accounts with the highest APR first to save the most in interest.

Others recommend trying to pay off the smallest balances first to get a quick psychological boost by seeing faster results. There is much validity in this also.

I have used a hybrid approach to knock down high balances. Use whatever tactic you think will work best for your situation.

I am also going to move this thread to the Rebuilding Your Credit board. I think you'll get more specific responses there.

Good luck in your journey!

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 17:46:36 GMT

Refer to Marine's post above:

I would suggest, that for immediate score improvement, pay down the cards that are above 60% first. Once you get all below 60%, do a "debt snowball" by applying all extra available cash to the smallest balance, and when it gets paid off 'roll' that payment into the next smallest, and so on.

As you pay them down, request credit limit increases on them to further help lower your UTI.

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 18:23:48 GMT

Would it be better to get them all to a zero balance, or pay them off and then use them for small things and pay that off? I was told zero balances aren't going to help my score.

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 18:25:42 GMT

Thank you! I was doing the the smallest balances first, but I just wasnt sure if that was a good move because of the auto loan payment. I thought possibly I should try to pay my car off first before going for the cards.

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 18:26:17 GMT

Thats a good idea too, thank you!

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 18:28:38 GMT

@Anonymous wrote:
Would it be better to get them all to a zero balance, or pay them off and then use them for small things and pay that off? I was told zero balances aren't going to help my score.

Pay them all off, but one. On that one, let it report less than 10% of the limit.

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 18:43:08 GMT

Gotcha, thank you so much for your help

Re: a litle bit lost...

Anonymous — Wed, 18 Mar 2015 18:59:42 GMT

@Anonymous wrote:
Thank you! I was doing the the smallest balances first, but I just wasnt sure if that was a good move because of the auto loan payment. I thought possibly I should try to pay my car off first before going for the cards.

You were correct - you want to concentrate on the revolving balances. The auto loan doesn't figure into your UTI. As long as you are paying it on time every month it helps your scores.

Re: a litle bit lost...

Anonymous — Thu, 19 Mar 2015 00:39:01 GMT

I received two letters back from Capital One, stating they were added a disagreement code to my dispute; what does this mean? Is this something I need to try to get taken off? I seached the threads on here but I didnt find a satisfactory answer.

weekly update, woo.

Anonymous — Wed, 25 Mar 2015 19:26:22 GMT

Baddies:

Transunion:

Helzberg Diamond card: Original charge off amount $748

In dispute, account was changed from >charge-off< to >account paid in full; was a charge off< - What does this mean?

Capital one - 60 day late *slated to be removed

Capital One - 30 day *slated to be removed

Macys - 2 30 days late, one in 2014, 2013 – goodwill letter sent

Experian -

ATG Credit – collection for $19; paid. – 2 goodwill letters sent (doing this weekly)

Cap 1/Helzberg – confused about this one, can anyone clarify? It says “account information disputed by consumer” “purchased by another lender” and “Closed; $0 written off” - is this a charge off? I am really confused as to why TU and Experian have different comments?

Cap 1 – 60 day late *slated to be removed

Cap 1 – 30 day late *slated to be removed

Macys - 2 30 days late, one in 2014, 2013 – goodwill letter sent

Still waiting for Equifax dispute resolution – it’s due on 4/2/15. I will definitely post the results.

Balances: (balances have been updated to be current)

Best Buy: $299.53 | CL: $500 | Min pay: $25 | APR: 24.24% - opened 12/08 lowered to 60%

Capital One: $406.56 | CL: $500 | Min pay: $25 | APR: 22.90% - opened 1/08 86%

Capital One/Orchard Bank: $0 | CL: $300 | Min pay: $25 | APR: 29.40% - opened 9/10

Chase bank: $299.27 | CL: $500 | Min pay: $25 | APR: 13.24% - opened 10/06 60%

Chase/Amazon: $960.45 | CL: $1,000 | Min pay: $25 | APR: 18.24% - opened 5/12 96%

Discover: $636.98 | CL: 1,000 | Min pay: $20 | APR: - opened 12/14 increased to 63%

Macys: $0 | CL: $100 ¥ Min pay: $25 | APR: 24.50% - opened 10/08

Nordstrom: $418.26 | CL: 2,000 | Min pay: $35 | APR 22.99% - opened 4/12 23%

PayPal Credit: $860.19 | CL: 1,000 | Min pay: $25 | APR 11.99% 86%

Target: $858.17 | CL: $1000 | Min pay: $25 | APR: 22.90% - opened 11/11 lowered to 86%

Overall utilization=60% (4,739.41/7,000)

Full bold denotes changes since last post.

Loan:

US Bank Auto - $2258.67 | Monthly: $212 | APR: 16.29

Plan of attack: I am currently paying cards down to get all under 60% then I will pay them all off accordingly. I am goodwilling ATG every week because I've heard theyre rude and stubborn and my only chance is probably to annoy them into removing the paid collection.

Setback: I had to use my Discover card at IKEA because my debit card has gone missing, but I am paying the balance I used so it won't be an issue.

Positives: I was able to get Capital One to remove three late payment reports due to their own rep's error.