topic Re: Next steps in rebuilding my credit in Rebuilding Your Credit

Next steps in rebuilding my credit

sparklerd34 — Sun, 09 Apr 2017 13:15:48 GMT

Hi,

So now that i am now in the land of fair credit i need to do some more homework before i consider applying for a home loan in 2-3 years. Since my divorce in aug 2015 its been much easier saving money and paying off debt.

I got rid of my drive time car (BIG Smile) it was a burden at times but i was blessed because i got a good car from them only had 1 major repair. That Sonata was solid. and i got it at 30k miles 3 years ago for a 2006. I guess thats why i got another hyundai except new and suv for my bad back.

Ive been blessed with an increase in income. my Fico is 609 and EQ is 609, EX 605 TU 603. No Liens, etcs just collections. Utilization is high need to lower it.

My new goal is to pay my credit cards off about 7k in credit card debt total store and major. I have a budget ive been using since end of last year.

My Goal is to only have student loan, car and everyday expenses. I dont want to get a house now because i pay 600 a month in Day care expenses. In 2 years that will be money i can use towards a house payment.

I have 8 baddies on TU and 5 on EQ. I plan to take care of them as i go. Most medical the other 2 are from my ex which doesnt plan on paying them. i noticed in the past when i paid them not much improved with my score.

Anything i missed in my plan besides payoff and save? My rebuild is almost 3 years my card limits are not that big. should i improve and try for a better limit when the opportunity comes. Do i refrain from any credit card offers for the next 3 years? not sure how to do it.

My payoff for my drive time loan hasnt hit yet and i dont know how that is going to affect my score.

I have savings, college savings and retirement back on track. Single mom any sound advice is appreciated. Oh and please understsand ive come along way then from my start. thanks again for all the sound advice everyone provided me to help me get this far. I have to say this forum has helped me so much.

Re: Next steps in rebuilding my credit

Anonymous — Sun, 09 Apr 2017 18:50:57 GMT

Are your student loans looking good and reporting monthly as installment loans on all three bureaus? If not, the car getting paid off could hurt you. If they're counting as installments and reporting monthly, you should be fine. Otherwise, you should consider an Alliant Shared Secured Loan.

As for not getting inquiries for three years, I wouldn't worry about the home loan in this regard. They fall off after 2 years. Moreover, if you have a couple of inquiries over a year old when you apply for the home, you should be fine. YMMV and I'd talk to your loan officer if you're already in the bank you plan on using for the mortgage, but generally a couple of year-old inquiries won't hurt.

The plan looks very sound to me. Get those $7k cards all the way down and you'll be looking great! As for negatives, you're right about paying them off not helping your credit score, but having balances can affect your home loan status. If you can contact them when money is available and get them to agree to PFD, that's ideal. As for your ex's baddies, nothing you can do there and explaining that to the loan officer will get it noted as divorce-related on your file. They shouldn't hurt you much at all for a home loan, particularly in 2-3 years.

Your plan is solid. Execute it and you'll be in your new home in no time!

Re: Next steps in rebuilding my credit

sparklerd34 — Sun, 09 Apr 2017 20:06:57 GMT

@Anonymous wrote:
Are your student loans looking good and reporting monthly as installment loans on all three bureaus? If not, the car getting paid off could hurt you. If they're counting as installments and reporting monthly, you should be fine. Otherwise, you should consider an Alliant Shared Secured Loan.

As for not getting inquiries for three years, I wouldn't worry about the home loan in this regard. They fall off after 2 years. Moreover, if you have a couple of inquiries over a year old when you apply for the home, you should be fine. YMMV and I'd talk to your loan officer if you're already in the bank you plan on using for the mortgage, but generally a couple of year-old inquiries won't hurt.

The plan looks very sound to me. Get those $7k cards all the way down and you'll be looking great! As for negatives, you're right about paying them off not helping your credit score, but having balances can affect your home loan status. If you can contact them when money is available and get them to agree to PFD, that's ideal. As for your ex's baddies, nothing you can do there and explaining that to the loan officer will get it noted as divorce-related on your file. They shouldn't hurt you much at all for a home loan, particularly in 2-3 years.

Your plan is solid. Execute it and you'll be in your new home in no time!

Thanks Federalist I really appreciate the advise. Yes my student loan payments are good and on time!. Thats good to know. I got a new car and replaced the old one so i got drive time dropping and my new one to report. either of them have reported yet. so i guess it may be flat. who knows cant tell. But im sticking to my plan and budget. I did search today and my apartment is 400.00 more a month if i were new coming in Yikes!! Mine is only going ip $20.00 but still.... Im already at 1200.00 So since my goal was to get rid of the car and get something sound my next goal is to one day purchase and i really dont have a deadline but just make good of my time and better decisions.