topic Re: Am I On The Right Track? in Rebuilding Your Credit

Am I On The Right Track?

bmore96 — Fri, 04 Mar 2022 21:21:44 GMT

Hey All,

I feel like I'm at an AA meeting but I've been reading and lurking and decided to make a post to get some additional help.

The goal is buy a home this year if possible. FHA would be the way I'm leaning to go and then refi to get rid of PMI.

I've had terrible money habits in the past but finally sat down to realize that I've been hurting myself and but have always let my income be the crutch.

Anyways my thought was just to pay all of my credit cards off this month to $0 balances but I've read I need to carry a balance on something.

My scores are:

FICO SCORE 8

541EQ 573TU 573EX

FICO SCORE 5,4,2

485EQ 474TU 483EX

Credit Cards: in order of age oldest to newest

Discover- (open) $500 limit paid to $0 Monday

Cap One - (open) $600 limit paid to $0 Monday

Cap One - (open) $500 limit $529 balance - thinking to pay off next week to $0

Credit One - (open) $700 limit $811 balance - want to pay off within the next week or two

Merrick - (open) $500 limit $518 balance- again thinking to pay off next week to $0

Premier - (open) $700 limit $624 balance- wanted to pay off within next two weeks.

Loans:

Auto - (open)*current*$550 payment $8100 balance

Auto- (open)*current* $700 payment $37000 balance

Student - (open)*deffered* $54000 balance

Student - (open) *deffered* $8958 balance

Collections

Mariner - balance $3007 *still reports*
Indigo- balance $743 *charge off*
Cap One Auto - charge off from totaled vehicle $1929 however I settled with them and even have a letter that was mailed out recently that shows the final payment is coming out and everything is good. But I don't believe they are reporting it correctly.

But in any event am I on the right track with paying the credit cards off first or should I have a different plan of attack?

Re: Am I On The Right Track?

moto4man — Sat, 05 Mar 2022 00:50:02 GMT

In my very brief learning experience here, I think you need to focus on those CO's before they possibly turn to collections, giving you a double whammy.

Next... however, some others that are much more knowledgeable than myself here might steer your in another direction. But I would work on those cards that are over your limits.

Wait for one of the more experienced folks to respond, but this is very similar to the route that got me to another level. Good

luck!

@bmore96 wrote:
Hey All,

I feel like I'm at an AA meeting but I've been reading and lurking and decided to make a post to get some additional help.

The goal is buy a home this year if possible. FHA would be the way I'm leaning to go and then refi to get rid of PMI.

I've had terrible money habits in the past but finally sat down to realize that I've been hurting myself and but have always let my income be the crutch.

Anyways my thought was just to pay all of my credit cards off this month to $0 balances but I've read I need to carry a balance on something.

My scores are:
FICO SCORE 8
541EQ 573TU 573EX
FICO SCORE 5,4,2
485EQ 474TU 483EX

Credit Cards: in order of age oldest to newest
Discover- (open) $500 limit paid to $0 Monday
Cap One - (open) $600 limit paid to $0 Monday
Cap One - (open) $500 limit $529 balance - thinking to pay off next week to $0
Credit One - (open) $700 limit $811 balance - want to pay off within the next week or two
Merrick - (open) $500 limit $518 balance- again thinking to pay off next week to $0
Premier - (open) $700 limit $624 balance- wanted to pay off within next two weeks.

Loans:
Auto - (open)*current*$550 payment $8100 balance
Auto- (open)*current* $700 payment $37000 balance
Student - (open)*deffered* $54000 balance
Student - (open) *deffered* $8958 balance

Collections
Mariner - balance $3007 *still reports*
Indigo- balance $743 *charge off*
Cap One Auto - charge off from totaled vehicle $1929 however I settled with them and even have a letter that was mailed out recently that shows the final payment is coming out and everything is good. But I don't believe they are reporting it correctly.

But in any event am I on the right track with paying the credit cards off first or should I have a different plan of attack?

Re: Am I On The Right Track?

bmore96 — Sat, 05 Mar 2022 00:58:30 GMT

Thanks I'm hoping someone can let me know. I've read that utilization hurts the score that's why I wanted to attack those. I can pay all the cards off before the end of month.

Re: Am I On The Right Track?

moto4man — Sat, 05 Mar 2022 01:03:38 GMT

@bmore96 wrote:
Thanks I'm hoping someone can let me know. I've read that utilization hurts the score that's why I wanted to attack those. I can pay all the cards off before the end of month.

You'll definitely see a boost with that UT lowered.

Re: Am I On The Right Track?

Jnbmom — Sat, 05 Mar 2022 01:08:57 GMT

You have 3 cards over the limits and one just about there . Pay them off , let one card report with minimal balance. Take care of collections , don't open anymore cards .

Not sure of your income but those high car payments factor into your DTI.

Re: Am I On The Right Track?

bmore96 — Sat, 05 Mar 2022 01:35:12 GMT

126k for base+ bonus. So the income is there to clean everything up. I don't use the cards so paying them off won't give me the urge to spend the cash. It's just been time and time of poor habits. The loan with the 8k balance is just about paid off part of me wanted to just pay it off, but that also could go towards savings for down payment plus closing.

The second car was a more recent purchase that I planned to refi.

Re: Am I On The Right Track?

FireMedic1 — Sat, 05 Mar 2022 09:49:20 GMT

Your kinda stuck at the moment. First. Get those over the limit cards down like now before they close them. Util % is at play here. Protect whats open now before you lose them due to closure. Once below 89% at a mininum. CO's are considered a 100% maxed out account even though its closed. Get them settled or PIF so they quit updating and can age off. People come and ask for help. I tell them straight out. You happen to have what I call swipe fever. No more swipes until its all paid. If you cant pay it, dont charge it. It isnt free money. Add up the interest paid. Look at it because its gone never to be in your pocket. Not being mean. Its the hard truth. Best of luck on your financial freedom. Never to return to the old ways.

Re: Am I On The Right Track?

bmore96 — Sat, 05 Mar 2022 12:24:02 GMT

Thanks for sure for the advice. I did do the math recently when I was saying how I've been wasting money just not budgeting properly. I've put myself on a budget so even with paying all the balances off I have no true need to use the cards again tbh. So I'll just pay the rest off between the next two weeks and then see what updates have happened.

Re: Am I On The Right Track?

bmore96 — Thu, 17 Mar 2022 15:09:52 GMT

I seem to be addicted to FICO scores now, constantly checking the app to see score changes. Things have changed here and there no huge jumps yet as Discover and Cap One have reported the $0 balances yet on the cards. As I did more research I'm learning about the whole statement date vs due date and that things get reported around the statement date now the due date. Wish I read up on that prior to paying off those two cards as I would have adjusted the order. I'm going to pay off the other cards between now and next week.

The CAP ONE AUTO has updated to $0 balance. This changed increased EQ but dropped EX.

Re: Am I On The Right Track?

Red1Blue — Thu, 17 Mar 2022 15:18:51 GMT

Hi @bmore96 I can not advice any more than others already mentioned. First pay down your over the limit cards. Let only 1 card report the balance. Make settlements for pfd and get those COs removed. Stop using the cards until you get the balances under control. Nice thing you are starting now and things will get better. Keep in mind there is no quick remedy for building scores. It is a Marathon and not a sprint. With time your scores will improve. All the best in your credit rebuilding.

Re: Am I On The Right Track?

bmore96 — Thu, 17 Mar 2022 15:28:58 GMT

Thanks any words/advice are truly appreciated. The whole cards situation was just me not really caring tbh. I don't even use those cards so even with paying them off there is no urge to charge them back up. I've put myself in a situation where I can save money monthly with a new job.

I looked at my report again and noticed I only have one account in "collections" it's a Trident Asset Management, which I believe holds the debit from the charged off Indigo card. The Cap One Auto didn't appear as a collection and the Mariner Finance doesn't appear as a collection either.

For the Trident account should I ask for the PFD?

Re: Am I On The Right Track?

OmarGB9 — Fri, 18 Mar 2022 18:40:30 GMT

@bmore96 wrote:
Thanks any words/advice are truly appreciated. The whole cards situation was just me not really caring tbh. I don't even use those cards so even with paying them off there is no urge to charge them back up. I've put myself in a situation where I can save money monthly with a new job.

I looked at my report again and noticed I only have one account in "collections" it's a Trident Asset Management, which I believe holds the debit from the charged off Indigo card. The Cap One Auto didn't appear as a collection and the Mariner Finance doesn't appear as a collection either.

For the Trident account should I ask for the PFD?

Absolutely. If it's your only collection and you can manage to get it removed, definitely go for it.

Re: Am I On The Right Track?

bmore96 — Wed, 23 Mar 2022 15:24:25 GMT

So I'm seeing some soft movement since I first started this journey.

Right now FICO8 is sitting at:

558/578/556

FICO4: 505/494/492

So I'm going to pay off two more cards this week while trying to get a pay for delete on that collections account as well.

I have another account that should be updated to current when they report it finally. So progress is progress.

@OmarGB9 wrote:
@bmore96 wrote:
Thanks any words/advice are truly appreciated. The whole cards situation was just me not really caring tbh. I don't even use those cards so even with paying them off there is no urge to charge them back up. I've put myself in a situation where I can save money monthly with a new job.

I looked at my report again and noticed I only have one account in "collections" it's a Trident Asset Management, which I believe holds the debit from the charged off Indigo card. The Cap One Auto didn't appear as a collection and the Mariner Finance doesn't appear as a collection either.

For the Trident account should I ask for the PFD?
Absolutely. If it's your only collection and you can manage to get it removed, definitely go for it.

Re: Am I On The Right Track?

FireMedic1 — Fri, 25 Mar 2022 22:11:55 GMT

@bmore96 wrote:
I seem to be addicted to FICO scores now, constantly checking the app to see score changes. Things have changed here and there no huge jumps yet as Discover and Cap One have reported the $0 balances yet on the cards. As I did more research I'm learning about the whole statement date vs due date and that things get reported around the statement date now the due date. Wish I read up on that prior to paying off those two cards as I would have adjusted the order. I'm going to pay off the other cards between now and next week.

The CAP ONE AUTO has updated to $0 balance. This changed increased EQ but dropped EX.

No worries. The scores will see saw for a while until its all done. Congrats on the turnaround. Keep us updated as things go up and up. Congrats!

Re: Am I On The Right Track?

FireMedic1 — Fri, 25 Mar 2022 22:13:59 GMT

@Red1Blue wrote:
Hi @bmore96 I can not advice any more than others already mentioned. First pay down your over the limit cards. Let only 1 card report the balance. Make settlements for pfd and get those COs removed. Stop using the cards until you get the balances under control. Nice thing you are starting now and things will get better. Keep in mind there is no quick remedy for building scores. It is a Marathon and not a sprint. With time your scores will improve. All the best in your credit rebuilding.

The status CO wont go anywhere. Time will get the CO's off. Just get the util % down is more important for now.

Re: Am I On The Right Track?

bmore96 — Fri, 25 Mar 2022 22:32:24 GMT

Ok cool. I paid off another card today. The credit one card was the last card over limit and now will have a $0 balance.

Going to pay the other cards within the next two weeks. I'm treating my savings for this house as a bill so I don't want to burn the cash despite it being there.

Re: Am I On The Right Track?

lns1976 — Sun, 27 Mar 2022 17:10:32 GMT

I just went through a rough two years and learned a lot watching my score as I made some stupid mistakes.

Your utilization is hurting you a lot as you have multiple cards overlimit. The jumps between having your util under 30% and over 100% is huge when it factors into your scores.

Don't expect any drastic jumps from removing a charge off or collections, but you don't want any new ones added either. As others have mentioned, anything outstanding that might go to collections you want to get a handle on.

Many times you can call and setup a $50 payment just to avoid going to collections until you're ready to pay it off.

Just my opinion, your on the right track. You want that utilization under 30% for multiple months and you want to keep your cards under limit and that isn't just about what it reports to the CR's. Most of your credit card companies are going to factor in how often you went overlimit into whether to give you a CLI. And with Capital One if your over limit they can and do reject you for any new cards until your under, and remain under, limit.

Re: Am I On The Right Track?

bmore96 — Sun, 27 Mar 2022 17:29:53 GMT

Yeah I've learned that I've made mistakes in the past and really could've been ahead of all of this years ago, but you live and you learn. I made a budget spread sheet and just seeing the liquid cash there was a walk up call for me. Since I've carried the balances for so long, I'm not used to even using the cards so the urge to charge them back up is not even there.

All of the cards are either $0 balance or under limit. Only 3 more left to pay off, my last update say me at 70% UTL and that was before the Credit One card was paid in full so that should be another jump coming up as well.

Re: Am I On The Right Track?

lns1976 — Sun, 27 Mar 2022 18:24:05 GMT

I had problems and had to learn, we all make mistakes, and I'm still learning.

Until last month I had been running my utilization over 100%. Bringing it down to 70% gave me a 20 point boost in my scores.

I started looking at the history in my Experian reports and realized that the difference between being below 30% and over 100% utilization averaged 35 to 50 points.

Next month everything current will be reporting under 30% utilization and I know I'll see a good boost to my score myself.

And I do fully agree with handling any accounts that might get handed off to collections before they do. I lost two accounts due to things going on the beginning of 2020 and went to see if I could work with them the beginning of the month only to find out I need to talk to the collection agencies now and hope I can keep them from reporting if I start making payments until I can pay them off.

Re: Am I On The Right Track?

bmore96 — Thu, 28 Apr 2022 14:15:29 GMT

So it's been about a month since I made this thread and the progress imo has been pretty good.

Sitting at 600eq/606tu/596ex!!!

Some big jumps with taking care of a couple cards and on time payments finally reporting on one of my other accounts.

I'm down to my last two cards with a balance. I'll take care of those during this upcoming period. Then onto the collection account. I foresee May being a big month for me on more movement with the credit.