topic Re: Need Help!! in Rebuilding Your Credit

Need Help!!

hdirider1974 — Tue, 23 Feb 2010 21:02:05 GMT

I have been trying for a while to rebuild my credit, with little or no success. My current eq score is 524. I have 4 credit cards with small cl that I use frequently throughout the month but usually pay the majority of the balance every month, I try to leave a small balance on the card so it shows some use. I have 2 collection accounts that are old (both should drop off my report in July of this year.) I also have 2 tax liens that were just added this year one for 227.00 and one for 455.00, (both of these I'm working with the IRS on because these were for sales taxes for my business that were paid but getting them fix the issue is like pulling teeth. My mortgage payment has been made on time for the last 7 months, prior to that there were a few 30 days here and there. I have one vehicle loan that has never been late since I had the loan 14 mos now. Other than that I have no debt I really don't need the credit cards I just use them and pay them down to try and build my score I would like to be able to get a prime card like chase, citi or amex just to have. It doesn't seem to matter what I do my score will inch up a couple of points at a time then drop a couple. It just seems like I'm in a never ending cycle. Is there anything I can do?

Thanks to anyone that can help

Re: Need Help!!

hdirider1974 — Tue, 23 Feb 2010 22:37:08 GMT

Have I made a mistake by getting so many cards with small balances? Should I close one or two of these?

Re: Need Help!!

hdirider1974 — Tue, 23 Feb 2010 22:44:06 GMT

Also I have a Capital One account on my eq credit report that still shows open with a 500 cl with a 0 balance no activity since 2008 because Capital One restricted and closed the account. I've reapplied but they will not reopen it or give me another card. Should I contact eq to have this account shown as closed or leave it as is?

Re: Need Help!!

Anonymous — Tue, 23 Feb 2010 22:51:15 GMT

I don't think the small CL are bad. But one thing with the low CL is you have to keep, best case scenario, about 10% or less charged out at any given time. Regardless if you pay in full every month. Running up close to the limit every month seriously hinders the score. I have two cards, $200 and a $300. It's a pain to figure how to balance them to about 10% util. and get used every month. My husband has a couple small ones too. I use one of mine for directv, the other for lunches throughout the month (don't eat out often), and his for internet and cell phone. Still, never know when something changes in price. I'd keep the small cards just for the rebuilding process, like I am. Establish more history, and maybe after it all, get some limit increases.

Re: Need Help!!

llecs — Tue, 23 Feb 2010 22:52:56 GMT

hdirider1974 wrote:
I have been trying for a while to rebuild my credit, with little or no success. My current eq score is 524. I have 4 credit cards with small cl that I use frequently throughout the month but usually pay the majority of the balance every month, I try to leave a small balance on the card so it shows some use. I have 2 collection accounts that are old (both should drop off my report in July of this year.) I also have 2 tax liens that were just added this year one for 227.00 and one for 455.00, (both of these I'm working with the IRS on because these were for sales taxes for my business that were paid but getting them fix the issue is like pulling teeth. My mortgage payment has been made on time for the last 7 months, prior to that there were a few 30 days here and there. I have one vehicle loan that has never been late since I had the loan 14 mos now. Other than that I have no debt I really don't need the credit cards I just use them and pay them down to try and build my score I would like to be able to get a prime card like chase, citi or amex just to have. It doesn't seem to matter what I do my score will inch up a couple of points at a time then drop a couple. It just seems like I'm in a never ending cycle. Is there anything I can do?

Thanks to anyone that can help

For best results and max points, get all but one to report $0 with the remaining reporting a balance of under 10%. Typically CCs report the balance they had on the day the statement cuts, so you'd have to do some juggling to get that sorted out if that's a goal.

For the collection agencies (CA), you can either wait if they are approaching 7 yrs old (from DOFD) or you can send a DV and then a PFD if they verify and you agree, assuming you want it off earlier.

For the tax liens, PIF ASAP, if you can. The removal clock for tax liens starts ticking when you pay it and then it is 7 yrs from that payment date. Or if in dispute, sort it out with the IRS directly.

If the mortgage is reporting a late, and you know for sure you'll never be late again, then send a GW letter asking them to remove the lates.

Keep paying the car loan as scheduled.

Welcome to the forums, BTW!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

and What Steps Do I Take - great for learning the repair process.

Re: Need Help!!

llecs — Tue, 23 Feb 2010 22:58:57 GMT

hdirider1974 wrote:
Have I made a mistake by getting so many cards with small balances? Should I close one or two of these?

Ditto to Leah. Having a bunch of small CL CCs won't hurt. Getting high CLs won't improve your scores any better than having low limit CCs. It's how you utilize the CL that makes a difference. Depending on the CCC, you could get increases over time. I started off ith a bunch of $200 to $600 limit CCs and it worked out just fine.

I wouldn't close them. The only reason to close a CC is if they are charging fees you no longer wish to pay. If this is the case, I would improve your credit first and that'll open some options to getting better CCs. Then you can replace them and kick them to the curb.

Re: Need Help!!

llecs — Tue, 23 Feb 2010 23:03:36 GMT

hdirider1974 wrote:
Also I have a Capital One account on my eq credit report that still shows open with a 500 cl with a 0 balance no activity since 2008 because Capital One restricted and closed the account. I've reapplied but they will not reopen it or give me another card. Should I contact eq to have this account shown as closed or leave it as is?

Don't touch it. You want it to say "open" even if it isn't opened. Chances are FICO reads it as a closed account so that wouldn't help, plus it's been inactive for too long, but it will help your history a great deal. Good accounts are removed 10 years after the company reports it closed. Since it isn't reporting closed, it could report forever and that adds history, improves your AAoA, and overall makes your CR look better. I have a Zales account that was charged-off and sent to collections. By definition, this account should have been removed sometime by 2004 because it was CO'd in 1997. But the negative remarks were removed due to reporting laws and for some reason it still reports as "open" despite being closed 13+ years ago. I dare not look at that TL for too long out of fear it might fall off.

Re: Need Help!!

hdirider1974 — Tue, 23 Feb 2010 23:09:26 GMT

The liens I am still disputing with the state. Like I said they were paid and never knew they had filed a lien till they showed up on my cr. The ca's should both drop off in July of this year. I'll definately heed the advice on the cl's I'll pay those off except for one and try to keep it at about 10%. Once I can get a better card with a higher limit I will try to close these other cards as they are serving no purpose other than to help me rebuild. As for the gw letter where can I find one of those?

Re: Need Help!!

llecs — Tue, 23 Feb 2010 23:12:23 GMT

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=6834

Re: Need Help!!

hdirider1974 — Wed, 24 Feb 2010 16:38:33 GMT

One of the cc I have is a first premier with a low limit and a high annual fee. Will it hurt my score if I pay that one off and close it?

Re: Need Help!!

Anonymous — Wed, 24 Feb 2010 17:34:44 GMT

I have two First Premier cards, one with $200 and one with $300. The fees are outrageous. But, my score is 564 EQ., brought up by First Premier. I think shutting them down will hurt pretty bad. It would reduce my debt to credit ratio to $0, and that's all the active accoutns I have. Just the two First Premiers. Just my experience. But listen to the seasoned members. :-)

Re: Need Help!!

hdirider1974 — Wed, 24 Feb 2010 17:58:39 GMT

I have 3 other cards other than the first premier. But if it will hurt my score I sure don't want to close it.

Re: Need Help!!

hdirider1974 — Wed, 24 Feb 2010 18:26:48 GMT

Also is your mortgage figured into your util? Because my mortgage shows a high utilization even though I put 50,000.00 down it shows what I financed compared to what the balance is. Does that make sense or did I describe it wrong?

Re: Need Help!!

hdirider1974 — Thu, 25 Feb 2010 15:33:32 GMT

All of my cards are paid down to 10% or under. Hopefully they will report soon and I will see some progress. Now If I can just get those tax liens taken off. I would at least like to get a Boa secured card but they turned me down a few months ago because of the open liens, I wander if they at least report satisfied if that will help?

Re: Need Help!!

llecs — Thu, 25 Feb 2010 16:36:46 GMT

hdirider1974 wrote:
Also is your mortgage figured into your util? Because my mortgage shows a high utilization even though I put 50,000.00 down it shows what I financed compared to what the balance is. Does that make sense or did I describe it wrong?

No, your mortgage isn't factored into your revolving (CC) utilization. It is factored into your installment utilization, but that's such a teeeeny tiny part of scoring that it isn't worth thinking twice about. In other words, if you paid off your mortgage tomorrow, you probably wouldn't see much of a change in FICO, if at all.

Re: Need Help!!

llecs — Thu, 25 Feb 2010 16:39:12 GMT

hdirider1974 wrote:
All of my cards are paid down to 10% or under. Hopefully they will report soon and I will see some progress. Now If I can just get those tax liens taken off. I would at least like to get a Boa secured card but they turned me down a few months ago because of the open liens, I wander if they at least report satisfied if that will help?

IMO, I would move past BofA. They used to be good and offered a great product, but they've changed and I would no longer recommend any of their secured cards. In fact, some here won't even recommend any of their cards, even if it fell in their lap.

Re: Need Help!!

hdirider1974 — Thu, 25 Feb 2010 16:40:36 GMT

Which would you recomend?

Re: Need Help!!

llecs — Thu, 25 Feb 2010 16:49:15 GMT

hdirider1974 wrote:
Which would you recomend?

I started with a secured Orchard. They were actually pretty good. HSBC had a bad reputation, but they were good, predictable, and were my lowest APR. They report differently from everyone else, but that was the only issue I had (other than the fees). Also had a BofA 99/500, which is offered as a counter-offer to their unsecured card. I don't think they offer that anymore and I think they still offer a secured card, but I hear those aren't graduating anymore. Check over in Credit Cards for more. Also try your local CU to see if they offer secured CCs. When talking to any lender, ask to see if their card graduates so that way you won't have to close the card in order to get your money back.