Big changes are coming

[Anonymous]

My post is two parts.  First my equifax score stands at 580.  I had $3,450 in credit card debt of $3750 total credit.  That is a whopping 91%.  I had some extra money so I paid them down and  now I am at about $1876 or 49%.  I plan to pay off the rest in September.  I want to know how long it will take to impact my fico score and if anyone has an estimate as to how much it will be impacted.  I also have to old accounts sitting in collections, totaling about $3000 that I will also pay off in September.  The reason I want to know is because I am in a 2 yr home-buying program and I want to clean-up my credit and have it clean for 12 months by November of 2008 so that I can get a great loan.  Will I be able to acheive this goal by then?  The second part of my post is does anyone have any tips on refinancing an auto loan? What are the benefits? How long should I wait to refinance?  What is the optimal credit score for an interest rate at or below 8%? (Right now I am at 13% interest which sucks , but I have only had the loan since March of 2007).  Also, when paying off those two collection accounts, any tips on negotiating a settlement?  I have no idea what I am doing and I want to pay as little as possible, seeing how most of that is fees and interest.  I know these are a lot of questions, but I did not want to forget anything!!! Help!!

[Anonymous]

Hi Montique, welcome.

You might benefit from reading this post first:

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=11303

One of our moderators Tuscani prepared it and it is super helpful.  It will help you with the first issue.

When settling with collections you want a PFD (pay for deletion) and Tusc also has a great example letter for that that you can use as a guide.

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=2659

Hope this helps.

Oh and lets not forget another of our forums Super Contributor's, Midnightvoice, post, which should at least make you smile.

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=5651

[Anonymous]

Do check out the links that tringal posted. They are very helpful.

On your last question about refinacing your auto loan at a 8% IR down from a 13% IR. It's not likely that you will be able to refinance until you get the negative old collections taken care of. Once you read the links and try thrm and you are successful, then you will have more of your cc debt paid down, you then may quaify for a lower interest rate.

[Anonymous]

That information was more than helpful.  I printed off the information for each one and it all hit right on the money.  I really needed to hear some good news tonight.  FICO can get you down some, but I am on the way back up.  Until next time.