topic Re: Hello all new here have a few questions about my terrible scores in Rebuilding Your Credit

Hello all new here have a few questions about my terrible scores

Anonymous — Fri, 15 May 2015 21:26:34 GMT

Hello so I am 20 Years old and like tons of us I ruined my credit making stupid choices when i was 18....so my scores are all around 567-577 I am really trying to rebuild them as much as possible. I understand my credit is basically my life line, So I now have a Capital one secured card where i deposited 200 and then 100 for a total of 300. I have had this card for about 3 months now it finally popped up on my credit tracker app I guess thats a good thing right? the app capital one gives you for free. I have made sure to pay the balance to 0 each due date! So basically what I am wondering is what else can I do to help my score??? How about fingerhut freshstart program I can get something cheap that I want let me know thanks I dont mind the overpriced items of fingerhut if it will help with my score. Also I have two negative items on my score both have been sent to collections both are 2 years old one is 700 bucks and the other 1100 phone company and a credit card..... I was wondering if I should pay these?? If so which one first and how will this benefit me?? Any tips? thanks in advance everyone

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 02:03:34 GMT

@Anonymous wrote:
Hello so I am 20 Years old and like tons of us I ruined my credit making stupid choices when i was 18....so my scores are all around 567-577 I am really trying to rebuild them as much as possible. I understand my credit is basically my life line, So I now have a Capital one secured card where i deposited 200 and then 100 for a total of 300. I have had this card for about 3 months now it finally popped up on my credit tracker app I guess thats a good thing right? the app capital one gives you for free. I have made sure to pay the balance to 0 each due date! So basically what I am wondering is what else can I do to help my score??? How about fingerhut freshstart program I can get something cheap that I want let me know thanks I dont mind the overpriced items of fingerhut if it will help with my score. Also I have two negative items on my score both have been sent to collections both are 2 years old one is 700 bucks and the other 1100 phone company and a credit card..... I was wondering if I should pay these?? If so which one first and how will this benefit me?? Any tips? thanks in advance everyone

First, make sure a small amount is reported to the credit bureaus each month on your credit card, if not you are penalized for a $0 balance, just make sure you only let it report no more than 10% of your credit line. Let it report $10 or so, so you don't have to pay much interest.

Second, get some more secured cards. Just make sure they report to all three credit bureaus regularly. You want 3 cards. You may also want to consider a small secured installment loan to help your credit mix.

Third, Get those collections taken card of, being that they are only 2 years old, they will be around for a long time and you are still in danger of being sued for the debt. Study up on "pay for delete" also known as "PFD" on the forums. This is when you make a deal with the creditor or collector for them to remove it from your credit reports in exchange for payment. Don't expect any settlement offers, but you could try. Make sure you have the full amount in order to pay if a deal is reached before you contact them. Do not enter payment plans with them, you need to be ready to pay in full to get the best negotiation.

Fourth, continue to spend a lot of time on these forums, you will learn a lot, an hour or two a day reading on here will give you valuable knowledge that you will need in your credit repair journey.

Re: Hello all new here have a few questions about my terrible scores

tufa4311 — Sat, 16 May 2015 02:55:50 GMT

@Anonymous wrote:
@Anonymous wrote:
Hello so I am 20 Years old and like tons of us I ruined my credit making stupid choices when i was 18....so my scores are all around 567-577 I am really trying to rebuild them as much as possible. I understand my credit is basically my life line, So I now have a Capital one secured card where i deposited 200 and then 100 for a total of 300. I have had this card for about 3 months now it finally popped up on my credit tracker app I guess thats a good thing right? the app capital one gives you for free. I have made sure to pay the balance to 0 each due date! So basically what I am wondering is what else can I do to help my score??? How about fingerhut freshstart program I can get something cheap that I want let me know thanks I dont mind the overpriced items of fingerhut if it will help with my score. Also I have two negative items on my score both have been sent to collections both are 2 years old one is 700 bucks and the other 1100 phone company and a credit card..... I was wondering if I should pay these?? If so which one first and how will this benefit me?? Any tips? thanks in advance everyone
First, make sure a small amount is reported to the credit bureaus each month on your credit card, if not you are penalized for a $0 balance, just make sure you only let it report no more than 10% of your credit line. Let it report $10 or so, so you don't have to pay much interest.

All great advice - I would just add that there is the Posting Date and the Due Date - the Posting Date (or the date your statement cuts) is usually when the balance is reported, then you have the Due Date a couple weeks later. So, if you bring your balance down to less than 10% before the posting date, let the small balance report, then pay if full prior to the due date you will not incur any interest.

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 11:15:03 GMT

@Anonymous wrote:
@Anonymous wrote:
Hello so I am 20 Years old and like tons of us I ruined my credit making stupid choices when i was 18....so my scores are all around 567-577 I am really trying to rebuild them as much as possible. I understand my credit is basically my life line, So I now have a Capital one secured card where i deposited 200 and then 100 for a total of 300. I have had this card for about 3 months now it finally popped up on my credit tracker app I guess thats a good thing right? the app capital one gives you for free. I have made sure to pay the balance to 0 each due date! So basically what I am wondering is what else can I do to help my score??? How about fingerhut freshstart program I can get something cheap that I want let me know thanks I dont mind the overpriced items of fingerhut if it will help with my score. Also I have two negative items on my score both have been sent to collections both are 2 years old one is 700 bucks and the other 1100 phone company and a credit card..... I was wondering if I should pay these?? If so which one first and how will this benefit me?? Any tips? thanks in advance everyone
First, make sure a small amount is reported to the credit bureaus each month on your credit card, if not you are penalized for a $0 balance, just make sure you only let it report no more than 10% of your credit line. Let it report $10 or so, so you don't have to pay much interest.

Second, get some more secured cards. Just make sure they report to all three credit bureaus regularly. You want 3 cards. You may also want to consider a small secured installment loan to help your credit mix.

Third, Get those collections taken card of, being that they are only 2 years old, they will be around for a long time and you are still in danger of being sued for the debt. Study up on "pay for delete" also known as "PFD" on the forums. This is when you make a deal with the creditor or collector for them to remove it from your credit reports in exchange for payment. Don't expect any settlement offers, but you could try. Make sure you have the full amount in order to pay if a deal is reached before you contact them. Do not enter payment plans with them, you need to be ready to pay in full to get the best negotiation.

Fourth, continue to spend a lot of time on these forums, you will learn a lot, an hour or two a day reading on here will give you valuable knowledge that you will need in your credit repair journey.

So since my limit is 30 when my credit card bill is due just pay it down to 30 each month if it was 100?? I will try to apply for another secured card this week any recommendations? Does it matter what limit I do, I was just going to do 200 I dont have much money to spend. Also I will look into a secured installment loan i dont have a clue what that is as far as collections go I am going to try to deal with atleast one of them within the next few weeks I do know that the one on portfoliorecovery said they do not offer pay for delete but it will be listed as paid in full is that okay? Also why do I need three cards?

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 11:24:29 GMT

See I thought carrying a balance was such a bad thing.... So on my $300 Dollar capital one secured card I want to pay it down to 10% on every due date rather then paying it down to 0%??? Also if i get another secured card I will just pay both down to 10% rather then paying it in full right??? How many secured cards is to many?? Also will having more then one benefit me?

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 11:57:55 GMT

From what I've read, it's really close to having the same impact on your score. A 10% utilization or less is best.

I would say you want to have at least 2 cards, so another secured or unsecured one would help. I wouldn't have more than 2 until you're sure you can manage it and give it a bit of time to start improving your score.

Honestly, I would try to come up with a plan for the collections and make that a bigger focus than finding new lines of credit. All the advice you got for Pay for Delete is good and would be a good way to start. You may want to try and contact the original creditor rather than the collection ageny first. You never know what options they may give you and reaching out to them has helped me a lot.

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 12:28:35 GMT

In addition to what everyone else has already recommended, and in case you have not already done so, get a free copy of your credit report from each credit bureau to see what they're reporting each month and start disputing any incorrect entries

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 12:40:26 GMT

Alright so when I look it up some say pay it to ten percent others say zero since I will be getting a second secured card this week should I pay one to zero and one to ten percent??? I will work on my collections and continue to pay off the two secured cards on time anything else I can do to boost my score besides collections and another card

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 12:48:49 GMT

Getting the collections taken care of, getting one more secured card, keeping the utiilization down to 10% or lower - that's about the best you can do (for a little while) and it's a great start!

One other thing that could be done (but I would tread carefully here, it worked in our case) is if you have a family member with a credit card they've had for a long time and they add you as an authorized user, it can help your score. However, this is only true if they've always been in good standing with their credit card, the age of the card, and they keep their utilization down. I don't really like this option if I'm not in control. (For example, for my BF's score, we did this to help HIS score. I added him as an AU on one of mine that was in great standing and it really helped his score). But, again, we only did that so it would initially really help his score enough for him to get an unsecured card of his own. We know that for the purpose of a mortage, the lender is going to see it's an Authorized User and not a true reflection of HIS history.

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 13:08:24 GMT

Okay thanks going to pay off one collection next pay day what I'd a good amount to settle for say a 800 dollar debt can I offer 300? If they won't accept pay for deletion is that okay??? Also with two cards and paying the balance to 0 each month could i see a 600 score by next year?? It's like 577 now

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 13:23:46 GMT

I would think so, yes (regarding increase). On time payments for 6 months on each card, keeping utilization down, and handlng the collections - I'd think you'd see a nice jump there!

I have a relatively big collection coming off next month, I'll let you know the increase I see.

If you wanted to do a Pay for Delete, you often have to pay the full amount.

For a settlement, I would offer 30% (knowing they'll start at 80%) and I would take a 50%. That's me. Some people will swear that they can settle for 25-30% and they have had success.

Initially, when you settle the collection, it will hurt your score because it's recent activity on a derogatory account. However, after you settle (if PFD doesn't work) I'd start goodwill letter writing to get the collection removed from the credit report altogether.

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 13:41:00 GMT

Alright I'll continue to pay the cards of course and hope for a nice increase by January also I was reading an article it said paying collections will have no increase mine are almost three years old so is it worthwhile if I can't get a pay for deletion?? Should I just worry about the two credit cards being paid on time?? Also I may be financing a motorcycle if I can that should help right

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 13:49:43 GMT

Yeah, the bike should help your mixed bag of credit, if you secure the financing.

Regarding whether to take care of the collection - I don't know... I hear different things from different folks, so it truly depends on the individual.

In my case, we're working towards a mortgage and our broker told us that we needed to make sure collections were paid. While it doesn't help our score, they still wanted to see collections as "paid" to secure the mortgage. However, others have said that if the SOL is almost up and they aren't trying to secure a loan like a mortgage, they'll wait it out and let it fall off.

I would rather settle and focus on goodwill letters than let the unpaid collection sit there. But, again, different people have different opinions on this. Which one will help/hurt your score? If you settle it can initially hurt as there is recent activity on a derogatory item. The score will be hurt regardless of whether you pay or don't pay (unless you secure a PFD). But, there's no way to know if a goodwill will work until you settle. If you have time to write, write, write - your Goodwill letter (this is where you settle and THEN ask them to remove later) may fall into the right person's lap and you may have success.

You could also search the forum for the company (Collection Agency) that is reporting on your credit report and see what success other's have had... this helps a lot!

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 13:56:38 GMT

Thanks a bunch your responses are super detailed by the way well I will get another card so I'll have two secured cards and make sure I pay them to 0 or ten percent each month on time!! And I will try to get a pay for deletion since that does help the credit score!

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Sat, 16 May 2015 14:03:15 GMT

Well thank you! I scour these boards for info and am still new to rebuilding. You can follow my blog to see where our success/challenges have been. Knowledge is power in it all, truly. Just keep at it, and you'll see success. Sometimes it's slow andy steady that wins the race. My BF had an increase of 50+ points in one month, simply from becoming an AU on a card with good history and the removal of one collection. Me, on the other hand, I saw a 17 point increase, in one month, by taking my utilization down.

Just learning, being aware of options, and making smart choices going forward - you'll hit your credit goals

Re: Hello all new here have a few questions about my terrible scores

gdale6 — Sat, 16 May 2015 20:12:46 GMT

Before going after any old debt you need to know if its inside or outside the SOL. Inside the SOL you want to be sure you can pay the full amount due before you contact them as they can still use the courts to get a successful judgment. Typically when you are making PFD offers you want to offer the full amount. Outside the SOL you may be able to discount the amount you offer them in exchange for removing it from your CR. Some will not do it even then and those you can just let sit and age off unless they are updating monthly, then you may consider settling to stop the monthly updating. When a derog account updates on a monthly basis your Fico score cannot recover as it never ages.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Q-amp-A-Examples-and-PFD-Success-Stories/td-p/2031275

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/td-p/4519

Re: Hello all new here have a few questions about my terrible scores

tufa4311 — Sun, 17 May 2015 05:31:06 GMT

@Anonymous wrote:
See I thought carrying a balance was such a bad thing.... So on my $300 Dollar capital one secured card I want to pay it down to 10% on every due date rather then paying it down to 0%??? Also if i get another secured card I will just pay both down to 10% rather then paying it in full right??? How many secured cards is to many?? Also will having more then one benefit me?
Remember, there are two important dates - the statement date (aka the cut date) and the due date: the statement date is the time that the balance is reported, THAT is when you want to have your balance at less than 10%, after the statement is cut, and the balance is reported, THEN you pay in full BEFORE the due date and thus incur no interest.
Example:
Month of May: $100 in purchases on a card that has a $100 limit.
Statement Date: June 1.
Due Date: June 15.
So in this scenario, you want to pay $91 before June 1 thus having a $9 balance on your statement and also reported to the CRA. Then after the June 1, pay off the remaining $9 before June15 and you will incur no interest (the actual amount here are just for example, you shouldn't by maxing your cards out - although most say that a long as it doesn't report you are fine I don't think it looks good to the creditor).Regarding the scenario with more than 1 card: No, you do not want to pay both down to less than 10% before the statement date - you want to pay ALL of your cards 100% off BEFORE the statement date EXCEPT 1 card - let that 1 card report less then 10%. So you can have 2 cards or 10, use them as much as you want. What is important is that at the end of the day you only have 1 card reporting a less than 10% balance and then after it reports you pay it off in full so you pay no interest.

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Mon, 18 May 2015 12:04:45 GMT

@gdale6 wrote:
Before going after any old debt you need to know if its inside or outside the SOL. Inside the SOL you want to be sure you can pay the full amount due before you contact them as they can still use the courts to get a successful judgment. Typically when you are making PFD offers you want to offer the full amount. Outside the SOL you may be able to discount the amount you offer them in exchange for removing it from your CR. Some will not do it even then and those you can just let sit and age off unless they are updating monthly, then you may consider settling to stop the monthly updating. When a derog account updates on a monthly basis your Fico score cannot recover as it never ages.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Q-amp-A-Examples-and-PFD-Success-Stories/td-p/2031275

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/td-p/4519

Okay I am going to read up on that as much as possible they are not reporting monthly to my knowledge I havent received any updates on them reporting on my credit tracker app. So I have the money for one atleast I will try to negotiate a pay for delete and if they are not willing to do that I can just allow it to sit and age???

Re: Hello all new here have a few questions about my terrible scores

Anonymous — Mon, 18 May 2015 12:07:14 GMT

@tufa4311 wrote:
@Anonymous wrote:
See I thought carrying a balance was such a bad thing.... So on my $300 Dollar capital one secured card I want to pay it down to 10% on every due date rather then paying it down to 0%??? Also if i get another secured card I will just pay both down to 10% rather then paying it in full right??? How many secured cards is to many?? Also will having more then one benefit me?
Remember, there are two important dates - the statement date (aka the cut date) and the due date: the statement date is the time that the balance is reported, THAT is when you want to have your balance at less than 10%, after the statement is cut, and the balance is reported, THEN you pay in full BEFORE the due date and thus incur no interest.
Example:
Month of May: $100 in purchases on a card that has a $100 limit.
Statement Date: June 1.
Due Date: June 15.
So in this scenario, you want to pay $91 before June 1 thus having a $9 balance on your statement and also reported to the CRA. Then after the June 1, pay off the remaining $9 before June15 and you will incur no interest (the actual amount here are just for example, you shouldn't by maxing your cards out - although most say that a long as it doesn't report you are fine I don't think it looks good to the creditor).Regarding the scenario with more than 1 card: No, you do not want to pay both down to less than 10% before the statement date - you want to pay ALL of your cards 100% off BEFORE the statement date EXCEPT 1 card - let that 1 card report less then 10%. So you can have 2 cards or 10, use them as much as you want. What is important is that at the end of the day you only have 1 card reporting a less than 10% balance and then after it reports you pay it off in full so you pay no interest.

Okay so all of my statements have popped up on the 9th so like 3/9 4/9 and 5/9 but my due date is the 6th of june so I already missed my deadline then right??