topic Thoughts on my plan, please? in Rebuilding Your Credit

Thoughts on my plan, please?

Anonymous — Mon, 06 Jan 2020 21:29:13 GMT

To start with here's my history:

Past annual income was $24,000

Recently got a job that will give me a $38,000 annual income. Planning on having a second job this year to boost income. Then save to go to school (I don't want to take a student loan) I just need a couple additional units to have my bachelor's degree from another country to be accredited here.

Score was around 450s.

Currently have 5 collections

LVNV will be done by Feb 2020 - Settlement (Will be deleted when done)
Ad Astra Recovery which I will PIF by Mar 2020
AmeraAssist which I will PIF by Mar 2020
Enhanced Recovery with PFD currently paying installment PIF by Mar 2020
Wakefield & Associates - My son's medical bill I still need to save money for this to be PFD hopefully by June 2020

Recently opened a Chase Freedom unlimited (I got a preapproval on the app and I applied and got approved) Nov. 2019. Used it 90% and paid it all off. I got a 60 points boost on my credit score by Dec. 2019. Should I do the same thing again to have another boost in Jan. 2020?

I have a VS credit card still on my report with 0% utilization. I lost this card so the account was closed.

Closed Cap One - has a bad record of payment, maxed out but not reported to collections, went to charged off, paid installment will be done by Mar 2020

Closed Credit One - has a bad record of payment, maxed out, LVNV in Collections.

1 closed installment loan

MY PLAN:

Open an SSL with NFCU on Feb. 2020 $3010 for 60 months and pay up to 90%. Then open a Discover secured CC in April 2020 ($500 If I get approved). Keeping utilization to 8% then paying it off and would just use my chase and paying it in full everytime I use it to increase CL.

I'm still new to this and I'm actually trying to understand everything but it can be overwhelming. If you guys can kindly comment on some links that you think will help me please share them. My goal is to be able to have a good credit history and AAoA to get a mortage 5-6 years from now.

Re: Thoughts on my plan, please?

Shooting-For-800 — Mon, 06 Jan 2020 21:33:13 GMT

I would take out students loans to pay off bills.

They are low interest rates and can be paid back at any time without penalty.

They do not harm your credit score.

GL!

Re: Thoughts on my plan, please?

Anonymous — Mon, 06 Jan 2020 21:36:59 GMT

Thank you. I might look into that once I gain more knowledge about student loans.

Re: Thoughts on my plan, please?

Girlzilla88 — Mon, 06 Jan 2020 22:18:47 GMT

I wouldn't opt for the Student Loan with all the horror stories I have heard see if you can qualify for Financial Aid first, but also getting those collections off are going to boost you so much!

Re: Thoughts on my plan, please?

Girlzilla88 — Mon, 06 Jan 2020 22:22:17 GMT

Me personally I wouldn't open a Secured card at this time if you are looking for more ways to boost your score up opt for a Secured Loan from your Bank/CU that will help show you are able to manage different types of accounts but also you will see that money back at the end of it and just keep working on your other card to let it build over a year (Freedom Unlimited) so I wouldn't add a new card until December 2020 or Early 2021

Re: Thoughts on my plan, please?

collics — Mon, 06 Jan 2020 23:28:25 GMT

Student loans are evil.

I'm currently taking online classes half time to have them deffered and will do that as long as I can until the rest of my debt is under control. I pay for the classes and my job reimburses.

Re: Thoughts on my plan, please?

Shooting-For-800 — Mon, 06 Jan 2020 23:53:57 GMT

What exactly is evil about 3-4% unsecured simple interest loan???

Re: Thoughts on my plan, please?

collics — Tue, 07 Jan 2020 00:58:22 GMT

@Shooting-For-800 wrote:
What exactly is evil about 3-4% unsecured simple interest loan???

Goodness your siggy is goals.

eta: being 21 and not being able to pay them back. I was speaking in jest and understand that isn't applying to OP at this stage in life. For ME, many moons ago, they were evil.

Re: Thoughts on my plan, please?

Girlzilla88 — Tue, 07 Jan 2020 17:03:57 GMT

Many of my friends have paid or are still paying double or more off the original amount and with the score range the OP is in I don't see them getting a good 3% or so rate I worry they would opt them for a higher rate and depending on how large the loan is for their school that may hurt more than help. Of course removing the collections and getting other things in order first may improve the chances down the line for a really good rate etc and who knows maybe student loans are more relaxed these days so low scores can get a low apr I just don't think that is the case?!

Re: Thoughts on my plan, please?

Anonymous — Tue, 07 Jan 2020 17:10:55 GMT

Thanks! That gives me some clarity regarding student loans. I have money to pay off the collections so it's not really a worry at the moment.

Re: Thoughts on my plan, please?

recoveringfrombk7 — Tue, 07 Jan 2020 23:23:46 GMT

@Girlzilla88 wrote:
Many of my friends have paid or are still paying double or more off the original amount and with the score range the OP is in I don't see them getting a good 3% or so rate I worry they would opt them for a higher rate and depending on how large the loan is for their school that may hurt more than help. Of course removing the collections and getting other things in order first may improve the chances down the line for a really good rate etc and who knows maybe student loans are more relaxed these days so low scores can get a low apr I just don't think that is the case?!

I was able to refinance predatory 12%+ loans to < 6% freshly out of BK when lending rates were higher. My score was 580. You'd be surprised what OP may qualify for. Also, if OP uses federal instead of private loans the repayment can be income-based so that you don't fall behind, etc. Student loans can be a great tool, but they require an aware borrower and an endgame.