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How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

Regular Contributor

How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

After a recent post encouraging a low-scoring forum member to be hopeful, several people have asked me how I got my FICO score from 420 in April to the 600s today. Hard work, patience, and diligence, as well as asking many questions on this forum, have been my salvation. Not to say I haven't slipped – I got so excited a few weeks ago when my FICO hit 668, and applied for a CapitalOne Auto Loan and a Best Buy card (it was my birthday), and my score started slipping downward because of those new inquiries. I need to not beat myself up over those decisions, but oh well, you can't change the past.

To set things up, I have had a contentious relationship with credit for the last few years, barely holding onto some subprime credit cards before their unmentionable fees overwhelmed me and led to the cards' closure. I never really relied much on credit cards because I could never qualify for more than $700 on one, although I did get a $1500 Best Buy card a few years ago, which was closed/charged off after I couldn't keep up with payments. I used to have a Dillards, Marshall Fields, and Sears card, but they all got closed due to delinquent pay patterns as well. These were all reporting well, as long as I made minimum payments each month, but I had too many, and the many minimums maxed me out, and I was never making any progress on the principal. Now the only card I have of any kind of revolving credit is my Target card.

I also have moved four times in five years for employment opportunities, and each one dried up almost as soon as I arrived, usually due to downsizing. This constant moving placed my already tenuous financial status into a constant state of disrepair. It also meant that I was leaving a trail of unpaid utility bills in my wake, which eventually got sold to collection agencies. I even had a "pay to stay" rental situation which shows up as an eviction/public judgment from 2003 on my credit reports.

Last summer (like a lot of people), I found myself having to choose between gas and other payments. Unfortunately, gas prices meant I delayed making my car payments. I started to get behind, and once I did, I never recovered. I tried to trade-in my vehicle for another one, but that just resulted in tons of hard pull inquiries that benefited me nothing. Then I ended up refinancing the car, but even the refinanced amount was too high, with gas prices still in the upper $2s, lower $3s, coupled with the fact that I was commuting 60-70 miles a day, 6 days a week, in an SUV that got 21 mpg tops on the highway (oy). Then I had to move to a new apartment (mine was being turned into condos, so there were all the moving expenses and utility deposits due). So nothing was really working in my favor at the moment.

Ultimately, I had gotten myself into a state of mind a couple of years ago in which I just didn't care about my credit, plain and simple. I figured that my situation was so bad, how could it possibly get any worse? That cavalier attitude led me to ignore important deadlines and settlement offers that would have kept things off of my credit report. It also relegated me to nights where the phone wouldn’t stop ringing for hours as creditors and collectors called over and over again. I resigned myself to always having bad credit and never owning a home, which made me bolder (and somewhat stupider) in my own taunts of the creditors that were calling me. I now know that some of this was due to anxiety and depression, but some was just plain stubbornness.

Then in March, my 2003 Ford Escape was repo'd, and I all of a sudden discovered just how important good credit was, when I couldn't even get into a used car for less than $3000-5000 down, and those were subprime loans in which I was paying the bank $2000-3000 to approve the loan, BEFORE the cost of the car. This became the tipping/turning point for me, and it opened my eyes to the seriousness of my situation.

I began monitoring my credit at that point, and was shocked as what I found. I started out around 457 in late March, and after some more attempts to get into a car loan in April, it dropped to the aforementioned 420. I got my FICO Score through the 30-day free trial of ScoreWatch, and then did the same for TrueCredit. I have since subscribed to both of these services, but it was invaluable to have a parallel comparison of all 3 credit report accounts (TrueCredit), as well as the comparison of a FICO score and a FAKO score. As part of ScoreWatch, I became addicted to the FICO Forum, and learned most of what helped me there.

I had let several of my student loans go without applying for deferrals, so they were reporting past due, but thank God not in default yet. There were several erroneous accounts that were not mine, as well as accounts that I had paid, but were showing as still open and unpaid. Far too many collection accounts with unpaid balances.

I called Target and made a payment arrangement with them, just to keep the card open and active, so that it could help me later on if I needed it to, as my sole source of revolving credit and good credit-building power.

The first thing I did was comb through the free credit reports I received (, and mark any accounts I didn’t recognize as mine. Then I found any erroneous late pay notations. I disputed these sets of items right away, and several of these errors disappeared very quickly. Step one should always be getting rid of obvious errors – personal information, addresses you don’t recognize, accounts that don’t belong to you, duplicate reporting, etc.

But I think the most important thing I did to monitor my success was creating an Excel spreadsheet of all of the derogatory items on my credit reports. I had columns for:
• The name of the creditor
• The name of the original creditor (if the account on the report was a collection agency)
• The amount of the debt (even if it was zero – paid off/charge off)
• Date reported
• Expected date it would drop off my credit report (this takes some math and research at times)
• Which credit reporting agencies reported the debt (this was a small detail, but became very important as time went on)
I also made a similar chart that included all of this info for accounts that I had received correspondence about from collection agencies or creditors that had not yet appeared on any credit reports yet – this was to become my reporting prevention list.

These charts allowed me to track what I owed (totally and individually), and monitor when things would start to drop off (and how many). Ultimately, it was a hard look at the reality of my situation. But when I realized that, apart from the student loans – which were now in deferral or the process of being deferred, I only owed $12000 max, it made me realize that this was too low a number to consider bankruptcy.

I made a plan to set aside $100 per week in a savings account to use for credit repair – this amount has taken a bit of a beating because of a settlement with Ford I arranged, but that single settlement (if I paid them 50% of my deficiency amount remaining after the sale of the repo’d vehicle, they would consider it paid in full and remove the repo comments from my credit reports) has actually reduced my total bad credit debt to less than $5000 now! The $100 a week allows me to look at my chart and see what accounts might be paid off completely with $100-300; those accounts I attempt to Pay for Delete – See Tuscani’s sample Pay For Delete (PFD) and Goodwill (GW) letters; they will help you through hell and high water. I did the math, and if I continued my credit repair savings account, it would allow me to pay off between $2000-4000 a year, which meant that after the Ford settlement, I could get all of my bad credit accounts paid to zero (and work out PFD and/or GW plans) within a year and a half. Some sacrifices would have to be made, yes. And the collection agencies don’t like hearing me say this, but I do and I stick with it, “I have drafted a plan to get out of debt by the fall of 2008, and your account is included in that plan, but you’re not the account I am working on at the moment, so you will have to be patient, but you will get your money.”

Part of my plan also involved joining the credit union at my job. Many benefits, not the least of which was automatic overdraft protection for my checking account up to $500. USE WISELY!

I have also created an Excel spreadsheet and chart function that allows me to enter my daily TrueCredit scores as well as my FICO score updates, and it may not seem to be much of an increase daily, but it does continue to go up.

This is more detailed than it should be, and probably not as detailed as it could be, but this has been my journey so far, and hopefully it will be enough of a shock and build enough good fiscal habits that I can keep moving steadily towards fiscal solvency.

Hope this helps.
Message 1 of 15
Moderator Emeritus

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

Fantastic! Thanks for sharing your story. This will definately help many who might feel discouraged or unmotivated!
Message 2 of 15
Established Contributor

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

Dang Neb,
I'm impressed.....seriously.
Great story though and I think people need to read your post.  Fixing your credit is not a fly by night matter and you've demonstrated that persistence and dedication pays off.
And I have to say, education is so important.  The stuff you pick up on here, even when we're messing around and poking fun at each other and the "system", is priceless. 
Think of how much more empowered you feel when you finally pick up the phone to call that creditor or CA to try to sort things out or you get on the pc to type that GW or PFD letter.  It's a good feeling, and I only wish more people would educate themselves instead of giving up.
Anyhoo, I'm a pushover and and a softy and I could go on all night, but I won't (say AmenSmiley Happy).
Glad you shared your story.
Message 3 of 15
Regular Contributor

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

Another thing I didn't mention was KEEP A CREDIT DIARY!!

For more info:

Message Edited by Neblett on 07-06-2007 07:52 PM
Message 4 of 15
Regular Contributor

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

for a second.. I thought this post was a spam for a quick fix service.. Smiley Happy
My score went from 470 to 570 in about 7 months.. I have made a budget where I will have my cards paid off within 3 years... I got tired of paying $700 in interest per month and $900.00 in minimum payments and not getting anywhere.
I guess my score bottomed out because I defaulted on the cards while I was looking for a company to refinance my home. I have enough equity, but the banks were closing the door in my face.
I have no collections, no charge offs, no bankruptcy.. Just a bunch of lates from last year while I was trying to reorganize things.. I guess having 17 open accounts being late for a few months was like a sledge hammer hitting my credit report 32 times..
I started to run into trouble last year when my cards were maxed out and I got behind with utilities and stuff.  I took a 401K loan of 7 grand.. But with no budget or plan.. It was just a band aid to keep going a few more months longer before we would bottom out.
I had to refinance my home for 10.5% interest to get maybe 12 grand in equity to knock down my revolving debt payment $200.00 per month to make a budget work. Otherwise there was not enough cash coming in to make minimum payments on everything. I also had to zero out 401K contributions and concentrate on paying off our revolving debt..
I guess the only thing discouraging is NO FUN MONEY...  I also feel my 3 year old is missing out on a lot of things in life.. We can't afford many fun things for her. We take her to daycare one half day a week just to have interaction..there are free things and activities to do at the Library and There are free county programs for young kids.. Vacation Bible School and stuff like that.. but as far as trips, or vacations.. Not in the budget.. Its a shame she has to suffer our financial mistakes..
Thank goodness.. my wife and I have good jobs and fairly good incomes to fix our mistakes without going in default... Maybe our situation will be much better in a few years when our daughter will be old enough to really enjoy vacations and remember them. Smiley Happy
I read other posts and they are an inspiration to keep on going with my financial plan.. Hopefully in 3 years this nightmare will be behind us.. Smiley Happy

Message Edited by Pants on 07-06-2007 06:10 PM
Message 5 of 15
Regular Contributor

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

WOW!!  I am impressed and encouraged by your post.  Thanks for taking the time to share your experience.  Your honesty is refreshing.  I now have hope that I can dig my way out of this mess that mostly I created, and it isn't nearly as daunting as I originally thought. 
Message 6 of 15
Frequent Contributor

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

Great work!!! Thank you for sharing your story. It is important for everyone to see that though one's credit may not be strong today, does not mean that tomorrow it can't be great. Keep up the good work.
Message 7 of 15
Valued Contributor

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

Neblett, first off.... kudos and hats off to you! 
Second, this post is awesome and I hope it bumps every now and then for people to want to see what a huge change they can make for themself with some organization, planning, work and dedication.
EQ 787 EX 781 TU 737 11/17/07 *** I am not an attorney. If I was, I might not clip coupons. If you want legal advice, consult an attorney. If you want my personal opinion, feel free to consider my posts***
Message 8 of 15
Valued Member

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

I really appreciate your candor and the tips that you offer.  I particularly like the fact that you are determined to pay your bills.  While I understand the logic that one shouldn't even bother paying chargeoffs since paying them doesn't benefit you in terms of score, there's something to be said of the integrity that you demonstrate by being determined to pay your obligations.  I figure that if I created the bill, it's my obligation to pay it -- no matter what. 

Thanks so much for the great testimony.  You have inspired me! Smiley Happy
Message 9 of 15
Frequent Contributor

Re: How I Moved from 420 to the 600s in 12 weeks - LENGTHY POST

i just got my most recent score updated and im almost in the 600's i believe i should be there hopefully in the next month or so, i am aiming to be in the mid 600s, i was at 476 in feb.

Starting Score: 643
Current Score: 657
Goal Score: 700

Take the FICO Fitness Challenge
Message 10 of 15