Help with my financial plans...

[Anonymous]

Hi all, Much like the general forum population here, I'm in the middle of trying to straighten out my financial future. My credit used to be excellent (780+), but in the midst of going to law school, a couple of late payments, and accruing a high total balance, my scores are what you see below. I'm currently in the process of trying to get a collections account off my record (PIF, letter to be sent to CA), as well as writing GW letters for the late payments mentioned above. Hopefully, if all goes well, my scores will inch a bit closer to 700. After my scores improve, I have three major goals in mind, but I don't really know which order to take them in. Please read on and advise me on the best course of action: - I want to consolidate my massive student loans, but because they are private, my credit score is going to determine whether I get approved and the rate. Ideally, I'd be able to get it consolidated without fees, and lock in a decent rate (variable rates kind of make me nervous). - I want to get a couple new credit cards for the long run. I have my eye set on the American Express Blue Cash rewards card, for the excellent rewards and because it's the only card accepted at Costco. I'm also looking into getting a Chase Platinum Visa soon, because I'd rather pay off my CapitalOne (my only Visa at the moment, and I'm not totally satisfied with it) and make the Chase card my primary Visa. - Eventually ... in a few years, I'd like to buy a condo and get married. This is really going to depend on my credit score improving from now until then, as I think it will be hard to get approved for a mortgage in my current state. And if I get the credit cards soon, a year will go by before I apply for a mortgage, so I should be inquiry-free. Any suggestions on how to accomplish this? Will one of these goals interfere with another? Am I being a bit reckless? Heck, even words of encouragement will do, as I love reading responses from myFICO guys. Definitely the most enlightened bunch of forumites I've ever seen in my life (and I've been a forum rat elsewhere for many years, different places).

[llecs]

I would focus on repair before rebuilding. You'd be surprised how fast your score will go up. That will give you better options for CCs and a better rate for the loan and mortgage. Inquiries have minimal impact anyway via a FICO score or a manual review. I have around 30 on EX and I have yet to have that come up as an issue via apping or through a manual review for a CLI, loan, etc.

Go after the CA. If you already paid, then send a GW letter asking for its removal. If the GWs go unanswered, then send a DV to this paid CA. If not paid, send a DV then offer a PFD.

You can also GW the lates for removal. That would likely bump your score too.

If these two items are the only things impacting you, then your scores would be in the 700s giving you pleny of new options to consolidate, get new CCs, mortgage, etc.

Edit to add....lower your utilization. I'd hazard a guess and say 40-50 points gained from that.

Message Edited by llecs on 07-10-2008 01:55 PM

[Anonymous]

Thanks for the advice. Lowering the utilization quickly is going to be next to impossible, but all of the other things (if successful) should help. I'll try to repair before anything else, instead of trying now and getting burned.

[Anonymous]

Fewer and fewer student loan lenders are doing private loan consolidation.  Sounds like you already know that the private loans can't be consolidated with the Stafford loans.  Also, you can't consolidate private loans that are not current.  Sallie Mae recently suspended its private loan consolidation program, and it was a good one.

I found a list of private loan consolidators at

http://www.finaid.org/loans/privateconsolidation.phtml

but they still list Sallie Mae.  When you go to the SM link, it explains that they're not doing it anymore.  I would try to do the consolidation sooner rather than later just because its become a much less profitable product for the lenders.