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Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

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lambomoonboy
Established Member

Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

In advance, I really appreciate anyone giving some advice, it is imperative to me I make the right choice after coming so far. I think at one point my credit was 50x!

 

The road to rebuilding my credit has been pretty good but I need advice on what to do going forward now, as my Equifax is decent (hit 725 recently), but the other two are low. I want to have a good chance of getting a mortgage soon, once I have good income to show, and I don't think just Equifax will cut it. The reason being, my dispute efforts were most succesful with EQ. They removed all the bad accounts tarnished with lates and deliquencies, and all the open accounts are in good standing/no lates (except the BoA). I used that as a segway to open 8 new accounts, in the last 2 months and a total of :

 

Discovery 200 NEW

Capital One 300 NEW

Reflex credit 750 NEW

Self Credit card 200 NEW

First Digital 300

Applied Bank 200

---other products---

Cred AI 1500 NEW

Grow credit  NEW

Grain credit 600 NEW

One financial NEW

Self reporting 200

BoA 43,000 balance (5 years old, current, but many lates)

 

I've gotten two big car loans (70k+30k at once, 128k at once) and they are paid off in full (128k is the one owing now 43k). I have lots of inquiries since I opened lots of new accounts and tried to trade the car in to have a new fresh loan (I got really bad approvals).

 

The glory from all the new accounts should boost me nicely, as I'm using them and PIF. However TU has 7 charged off accounts, and EXP has a total of 9. Exp is $16,500 total on the charge offs and TU is $8600. The charge off accounts are still about 80% on time, despite being closed when I lost my job and stopped servicing them (I kept my car). In a perfect world I would pay off the 16,500 (which if I run into money in the future and it makes sense I would). As a matter of what is most efficient in raising the lacking scores quickly, do the charge offs matter so much at this point, they show as "low impact" ? It's been over 3 years on most of them, but a couple are "affordable" to me, if I feel its worth it (One is $530 that is on both T+Exp for example). Or would you use my limited funds to increase Discovery and first digital upto 2-5k limit over the next few months? Which of the 2, or mix of the 2 options would take me to 700+ for all 3?

I think I've explained myself, but please feel free to ask for additional information. I paid off a $35 charge off on Exp today, and I'm hoping that demonstrates what kind of impact it would have but you guys seem to be loaded with XP points. Thanks again!

 

 

70 REPLIES 70
Jnbmom
Credit Mentor

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

I would suggest not applying for anything else. You really only need 3 cards to start rebuilding. Adding new cards will not offset your bad accounts , your TU and Exp will not move your scores up  very much with all those negatives reporting . The only way for those to improve would be to take care of the negatives.

 

Also keep in mind that creditors periodically do reviews and can look at other reports besides EQ which could result in adverse action on your recently opened accounts .

EXP 780 EQ 791TU 795
Message 2 of 71
EAJuggalo
Established Contributor

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

You're going to want to post this over on the mortgage board as well.  My initial impression is, quit applying for new things, close some of the crap you have, and pay off the debts you obviously have the ability to pay.  Unless that 128k auto loan is a semi truck, I would sell that and pay everything else off.  I would expect that if you looked at your mortgage scores they are incredibly low, and not likely to get any higher with the charge offs showing.  Even if you did get someone to approve you for a mortgage, one of the things that is likely to happen is that the lender will require you to satisfy the debts. And there are many reports that once a creditor sees initial mortgage pulls they will add collections immediately, knowing that they have a better chance to get paid.  

EX700 TU 704 EQ 694 4/03/22
Cap1 QS-$4,500 Chase Freedom Flex- $800 Chase Freedom Unlimited- $1,000 Victoria's Secret- $1,200 Citi DC- $800 Amazon Store Card- $3,500 AMEX Hilton Honors-$1,000 Discover It-$1,000 Wal-Mart MC $290 Chase Sapphire Preferred-$5,000 NFCU Flagship $13,800 AMEX BCE-$1,000 AMEX Gold-$5,000 AMEX Delta Blue $1,000 Lowe's $5,000 Navy Platinum $17,000 AMEX BBP $2,000
Message 3 of 71
lambomoonboy
Established Member

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

I'm confused why you would tell me to close anything when I see dozens of accounts opened in your signature ??

Message 4 of 71
Red1Blue
Super Contributor

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

Hi @lambomoonboy  I think every one is trying to say is. It is a good and know practice to

1. Make settlements and payoff any outstanding balances one might have on the closed accounts. This will reduce the utilization and improve scores.

2. Pay off the try to get the collections removed from the reports. This will help with the score.

3. Reduce the number of new accounts opened. New inquiries and new credit cards ding the scores.

4. Best known cure for the score improvement is Time. As the accounts age your scores will go up and up.

Message 5 of 71
OmarGB9
Community Leader
Super Contributor

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

First off, opening more accounts won't outweigh the negative info already on your reports. Also, the "80% on time" is just as bad as 0% on time. Despite what credit monitoring services like Credit Karma may say, your "on time percentage" is not an actual FICO scoring stat. Either you're 100% on time on ALL accounts, or you're not. There's no in between. Any lates hurt your scores, but 60day + lates and ESPECIALLY charge offs hurt the most. 

 

I would pay/settle all those charge offs because they are weighing heavily on your score regardless of the fact that they are 3+ years old. COs hurt all 7 years. Their impact doesn't really go down much with age. Also, if they're updating monthly, that's hurting you as well. And the fact they they're COs means that for utilization purposes, they're considered "maxed out" accounts. Finally, there's the possibility of litigation if they're still within SOL.

 

So yes, I would definitely take care of all those COs ASAP.


Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 6 of 71
WayneSki
Regular Contributor

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572


@lambomoonboy wrote:

In advance, I really appreciate anyone giving some advice, it is imperative to me I make the right choice after coming so far. I think at one point my credit was 50x!

 

The road to rebuilding my credit has been pretty good but I need advice on what to do going forward now, as my Equifax is decent (hit 725 recently), but the other two are low. I want to have a good chance of getting a mortgage soon, once I have good income to show, and I don't think just Equifax will cut it. The reason being, my dispute efforts were most succesful with EQ. They removed all the bad accounts tarnished with lates and deliquencies, and all the open accounts are in good standing/no lates (except the BoA). I used that as a segway to open 8 new accounts, in the last 2 months and a total of :

 

Discovery 200 NEW

Capital One 300 NEW

Reflex credit 750 NEW

Self Credit card 200 NEW

First Digital 300

Applied Bank 200

---other products---

Cred AI 1500 NEW

Grow credit  NEW

Grain credit 600 NEW

One financial NEW

Self reporting 200

BoA 43,000 balance (5 years old, current, but many lates)

 

I've gotten two big car loans (70k+30k at once, 128k at once) and they are paid off in full (128k is the one owing now 43k). I have lots of inquiries since I opened lots of new accounts and tried to trade the car in to have a new fresh loan (I got really bad approvals).

 

The glory from all the new accounts should boost me nicely, as I'm using them and PIF. However TU has 7 charged off accounts, and EXP has a total of 9. Exp is $16,500 total on the charge offs and TU is $8600. The charge off accounts are still about 80% on time, despite being closed when I lost my job and stopped servicing them (I kept my car). In a perfect world I would pay off the 16,500 (which if I run into money in the future and it makes sense I would). As a matter of what is most efficient in raising the lacking scores quickly, do the charge offs matter so much at this point, they show as "low impact" ? It's been over 3 years on most of them, but a couple are "affordable" to me, if I feel its worth it (One is $530 that is on both T+Exp for example). Or would you use my limited funds to increase Discovery and first digital upto 2-5k limit over the next few months? Which of the 2, or mix of the 2 options would take me to 700+ for all 3?

I think I've explained myself, but please feel free to ask for additional information. I paid off a $35 charge off on Exp today, and I'm hoping that demonstrates what kind of impact it would have but you guys seem to be loaded with XP points. Thanks again!

 

 


With all the negatives you have going on with your credit profile, I doubt that any of those small limit tier 4 accounts you opened will do anything for your credit positively and some of those accounts are consumer finance accounts, that impact your credit negatively.

Message 7 of 71
jcooks
Established Contributor

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

I agree, work on paying off the charge offs and try to work with the collection agencies to agree to pay for delete.  In other words, once you pay it off, they will take remove the derog.  Other than that, time would be your best option at this point.

Message 8 of 71
Remedios
Credit Mentor

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

Just so I can un-confuse myself 

 

You are driving RR, you had all your cards charged off for non payment, multiple lates on RR but unlike cards you continued paying it, you want to buy Lamborghini, you're applying for mortgage, you opened a bunch of accounts that are completely unnecessary, you think you'll go from 590 to 700+ from opening new accounts, all while wondering if you should pay charge offs? 

 

Disclaimer : there was a removed post because OP didn't like the answers but we ain't having that ag... 

 

Here, your funds are limited according to you but you're putting money into secured loans, predatory...  

 

Is this for real (completely retorical question) 

Message 9 of 71
FinStar
Moderator Emeritus

Re: Pay off Closed bad accounts, or Increase Good card limits- EQ 710, TU, 606 EXP 572

0648726A-C920-4D5F-BE02-71E63F83883E.gif


I'm still lost on the Lambo chapter 🤔

 

So, if I were to obtain Lambo, would that be a true fembot magnet and wipe off all my CO's?  Asking for a friend Smiley Wink

Message 10 of 71
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