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Next steps to healthy credit

Grizzygains
New Member

Next steps to healthy credit

Hi All,

 

I am new to the community and I am looking for general advice on what are the next steps I need to take to achieve an even healthier credit profile. 

 

So far I have subscribed to the myfico paid service and have access to all my scores on a monthly basis. After reviewing my credit reports, I identified the derogatory items and was able to get one removed myself by reaching a settlement offer with the collection agency and agreed to pay for delete. 

 

I have 3 derogatory items remaining on my report, which I have hired a credit Repair company to assist with. My general question is, aside from removing negative items, what are the next steps I should be taking in the meantime while the credit repair company does their work? How do I know what cards, line of credit ect to apply for?

 

My FICO 8 current scores are EQ 643 TU 657 Experian 628

 

Any advice is appreciated and I can provide any further info that might help the community help me.

Message 1 of 16
15 REPLIES 15
Dumbee
Established Contributor

Re: Next steps to healthy credit

We'd probably need more info, like what accounts do you already have, how old are they, etc

 

Usually it's good to have 3 credit cards + 1 installment loan in terms of max points.

 

Secured/Starter cards: https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Best-Secured-Cards-that-Graduate-in-2020/td-... 

 

If you already have a loan like auto/mortgage/personal, you wouldn't need another to build credit.

 

 Credit builder loans:

https://www.self.inc/ 

https://www.creditstrong.com/ 

Or an SSL from a local credit union or Navy Federal if you are eligible would be better.


Smiley Embarassed
Personal/40.15K Biz/23K POT/17K
Message 2 of 16
chiefone4u
Established Contributor

Re: Next steps to healthy credit


@Grizzygains wrote:

Hi All,

 

I am new to the community and I am looking for general advice on what are the next steps I need to take to achieve an even healthier credit profile. 

 

So far I have subscribed to the myfico paid service and have access to all my scores on a monthly basis. After reviewing my credit reports, I identified the derogatory items and was able to get one removed myself by reaching a settlement offer with the collection agency and agreed to pay for delete. 

 

I have 3 derogatory items remaining on my report, which I have hired a credit Repair company to assist with. My general question is, aside from removing negative items, what are the next steps I should be taking in the meantime while the credit repair company does their work? How do I know what cards, line of credit ect to apply for?

 

My FICO 8 current scores are EQ 643 TU 657 Experian 628

 

Any advice is appreciated and I can provide any further info that might help the community help me.


Welcome to MyFico! 

 

I'll start with; there is nothing a credit repair company can do that you can't. A large percentage of credit repair companies receive excessive fees to send one or two dispute letters a month. 

 

If you list the good, the bad and the ugly the members of this forum will help you reach your goals. 

 

When sharing your information, it is helpful to know:

UGLY:

who the original creditor is, who the current collection agency is, amount owed, and Date of First Default-- for your collections. 

 

BAD:

Creditor, date opened, limit, current balance owed, number of lates and severity of each (30, 60, 90 days late) how recent was the most recent? 

 

GOOD:

Creditor, age of account, limit and amount owed. 

 

With the above, great advice can be tailored to your specific profile and goals. 

BrutalBodyShots - Good Will Saturation Technique

Starting Score: EQ:608, EX:617, TU:625
Score 10/2018: EQ:669, EX:686, TU:668
Score 11/17/2018: EQ:682, EX:681, TU:683
Current Score 3/11/2020: EQ:695, EX:703, TU:720
12/24/2018 -- EQ Beacon 5.0: 678, EX Fico II: 690, TU Fico Classic 04: 716

Goal Score: 740+


Take the myFICO Fitness Challenge

Discover IT $1000Cabelas Clasic $1000Coscto Anywhere Signature Visa -Citi- $7200ExxonMobil Smartcard -Citi- $2500Playstation Visa (Comenity) $1950QuickSilver One $2200Walmart $6000Wells Fargo Platinum Visa $3000

Member of the Synchrony Bank giveth then Taketh away April 2020 Club! $86,900 in available credit gone without warning.

Newest Account July 8, 2020 -- Last HP October 24, 2020 -- Gardening Goal:
August 2022 and reach 0/24
Message 3 of 16
ImTheDevil
Community Leader
Super Contributor

Re: Next steps to healthy credit

^^^ seconded. Money you pay a "repair" agency is money you can use toward resolving your debts. At best, those outfits may get lucky and have a dispute not followed up and get something deleted. More often, it comes back validated and dings your score for additional points. Cut ties with them, spell out your info as @chiefone4u laid out above, and we can help you do this yourself.

 

Welcome to MyFICO - you're in the right place to get things fixed, I can promise you that!



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Message 4 of 16
Grizzygains
New Member

Re: Next steps to healthy credit

Thanks all @ImTheDevil @chiefone4u @Dumbee 

 

My wife and I have mentally committed to give this repair agency a try for 3 months ish. Mostly due to the sheer number of negative accounts that she has and the time we assumed it would require to do both ourselves.

 

Now onto my profile, here's what I have:

 

UGLY

1. Original Creditor: Navient (currently issued to a national enterprise systems collection agency)

Amount owed $17,519 charge off

Date of first default: 10/2016 90days late

Last activity 05/2016 EQ 04/2016 TU

 

2. Original Creditor: Navient (currently issued to a national enterprise systems collection agency)

Amount owed $11,691 charge off

Date of first default: 09/2016 90days late

Last activity 05/2016 EQ 04/2016 TU

 

3. Original creditor: Bank of America (closed)

Amount owed: $0 (paid acct/was a charge off)

Date of First Default: 09/2013 30 days late

Last activity: 08/2013

closed date: 11/2008

 

GOOD

 

1. Ally financial car loan

Age of acct: opened 09/2019

Balance $27,947

 

2.Jared galleria 

opened 11/2018

limit $5,100

balance $0

 

3. cap1 auto (closed)

opened 08/2015 closed 09/2019

balance $0

 

4. Cap1 CC

opened 05/2015

limit $7000

balance $0

 

5. Top asset solutions

opened 05/2014

balance $0

 

6. sams club (closed) 

opened 10/2011

limit $2000

balance $0

 

7. cap1 auto

opened 10/2011

balance $0

 

8. cap1 cc

opened 04/2011

limit $2000

balance $683 (will be $0 before statement close, I've been clearing my cc balances each month for a few months now)

 

My wife and I recently became NFCU members however we just have savings and checking with them for now.

Message 5 of 16
CA4Closure
Regular Contributor

Re: Next steps to healthy credit

First, now that your accounts went into collections, I would negotiate a repayment plan. Stop using your credit cards except for one. For example, use one card only and your spouse or you pays by cash. You need to work on financial savy. Don't even think of applying for more credit because at this point your APRs will all be in the 18% or higher range and most credit card issuers will not lower your APRs intil you hit the 700s in FICO score. 

Second, get rid of financially draining expenses like cable TV just get the basic. If you are paying over $400 on your auto payment, sell it and get a cheaper vehicle. 

The only way to fix this is mess is time. Make timely payments on your credit cards and stop living beyond your means.

I have been there except my downfall was lost of a job and a business partner who stole business assets and I got stuck with paying for the loss. I lost my home and was destroyed financially. It took me 4 years to get from FICO 330 to FICO 700. Today my FICO is between 831-850.

Message 6 of 16
chiefone4u
Established Contributor

Re: Next steps to healthy credit


@Grizzygains wrote:

Thanks all @ImTheDevil @chiefone4u @Dumbee 

 

My wife and I have mentally committed to give this repair agency a try for 3 months ish. Mostly due to the sheer number of negative accounts that she has and the time we assumed it would require to do both ourselves.

 

Now onto my profile, here's what I have:

 

UGLY

1. Original Creditor: Navient (currently issued to a national enterprise systems collection agency)

Amount owed $17,519 charge off

Date of first default: 10/2016 90days late

Last activity 05/2016 EQ 04/2016 TU

 

2. Original Creditor: Navient (currently issued to a national enterprise systems collection agency)

Amount owed $11,691 charge off

Date of first default: 09/2016 90days late

Last activity 05/2016 EQ 04/2016 TU

 

3. Original creditor: Bank of America (closed)

Amount owed: $0 (paid acct/was a charge off)

Date of First Default: 09/2013 30 days late

Last activity: 08/2013

closed date: 11/2008

 

GOOD

 

1. Ally financial car loan

Age of acct: opened 09/2019

Balance $27,947

 

2.Jared galleria 

opened 11/2018

limit $5,100

balance $0

 

3. cap1 auto (closed)

opened 08/2015 closed 09/2019

balance $0

 

4. Cap1 CC

opened 05/2015

limit $7000

balance $0

 

5. Top asset solutions

opened 05/2014

balance $0

 

6. sams club (closed) 

opened 10/2011

limit $2000

balance $0

 

7. cap1 auto

opened 10/2011

balance $0

 

8. cap1 cc

opened 04/2011

limit $2000

balance $683 (will be $0 before statement close, I've been clearing my cc balances each month for a few months now)

 

My wife and I recently became NFCU members however we just have savings and checking with them for now.


Your dates look off to me on your BoA charge off. Were you in some sort of repayment plan from 2008 to 2013? I'm not sure where you got your dates from, just looks odd that the account is $0 and your first default was a month after last activity. 

 

On the bright side, if your dates are correct this account will age off this year. You should even be able to call Transunion this month and ask for "early exclusion", requests the same from Experian in July. Don't mess with Equifax as they tend to make it more complicated than it needs to be.

 

The early exclusion is where paying a credit repair company to fix your credit can be harmful. If the company disputes this account, your request for early exclusion could be denied.

 

Someone will correct me if I'm wrong, in my opinion you need to get ahold of Navient and rehab those student loans. You should be able to enter a income based repayment plan. 

 

Rehabilitating the student loans will put them in the "good" column after 6 on time payments. If they are federal student loans, they will never actually go away. Sometimes they fall off your reports, but they will haunt you down the road if you try to finance a home. 

 

Keep up the good work on not carrying a balance month to month on your credit cards. 

 

Overall, your profile isn't that bad. 

 

You didn't mention anything about income, or how much you have to toss at debts so I can't say for sure how quickly you'll be cleaned up. 

If you rehab those loans, you should be pretty much cleaned up before end of this year. Obviously unless you have $30k available you'll still be paying down the student loans for a few years (those terms should be laid out when you rehab them).

 

Best of luck! 

BrutalBodyShots - Good Will Saturation Technique

Starting Score: EQ:608, EX:617, TU:625
Score 10/2018: EQ:669, EX:686, TU:668
Score 11/17/2018: EQ:682, EX:681, TU:683
Current Score 3/11/2020: EQ:695, EX:703, TU:720
12/24/2018 -- EQ Beacon 5.0: 678, EX Fico II: 690, TU Fico Classic 04: 716

Goal Score: 740+


Take the myFICO Fitness Challenge

Discover IT $1000Cabelas Clasic $1000Coscto Anywhere Signature Visa -Citi- $7200ExxonMobil Smartcard -Citi- $2500Playstation Visa (Comenity) $1950QuickSilver One $2200Walmart $6000Wells Fargo Platinum Visa $3000

Member of the Synchrony Bank giveth then Taketh away April 2020 Club! $86,900 in available credit gone without warning.

Newest Account July 8, 2020 -- Last HP October 24, 2020 -- Gardening Goal:
August 2022 and reach 0/24
Message 7 of 16
chiefone4u
Established Contributor

Re: Next steps to healthy credit


@CA4Closure wrote:

First, now that your accounts went into collections, I would negotiate a repayment plan. Stop using your credit cards except for one. For example, use one card only and your spouse or you pays by cash. You need to work on financial savy. Don't even think of applying for more credit because at this point your APRs will all be in the 18% or higher range and most credit card issuers will not lower your APRs intil you hit the 700s in FICO score. 

Second, get rid of financially draining expenses like cable TV just get the basic. If you are paying over $400 on your auto payment, sell it and get a cheaper vehicle. 

The only way to fix this is mess is time. Make timely payments on your credit cards and stop living beyond your means.

I have been there except my downfall was lost of a job and a business partner who stole business assets and I got stuck with paying for the loss. I lost my home and was destroyed financially. It took me 4 years to get from FICO 330 to FICO 700. Today my FICO is between 831-850.


 @CA4Closure 

Without OP giving any indication of income, or disposable income we don't have enough information to say what is a reasonable car payment. 

 

From what I see OP has roughly $30k in student loan debt, but other than lack of payment we don't know why it went to collections. 

 

I do agree that to clean up their profile quicker it's going to take all available disposable income they can scrape up. 

I find it a pretty bold statement of "living outside your means" with what has been shared. 

 

It is possible ignorance got them behind on student loans, then it compounded with not knowing how to fix it later -- so it was just ignored.  <-- only speculation as a back story wasn't provided either. 

 

BrutalBodyShots - Good Will Saturation Technique

Starting Score: EQ:608, EX:617, TU:625
Score 10/2018: EQ:669, EX:686, TU:668
Score 11/17/2018: EQ:682, EX:681, TU:683
Current Score 3/11/2020: EQ:695, EX:703, TU:720
12/24/2018 -- EQ Beacon 5.0: 678, EX Fico II: 690, TU Fico Classic 04: 716

Goal Score: 740+


Take the myFICO Fitness Challenge

Discover IT $1000Cabelas Clasic $1000Coscto Anywhere Signature Visa -Citi- $7200ExxonMobil Smartcard -Citi- $2500Playstation Visa (Comenity) $1950QuickSilver One $2200Walmart $6000Wells Fargo Platinum Visa $3000

Member of the Synchrony Bank giveth then Taketh away April 2020 Club! $86,900 in available credit gone without warning.

Newest Account July 8, 2020 -- Last HP October 24, 2020 -- Gardening Goal:
August 2022 and reach 0/24
Message 8 of 16
Eagered2succeed
Frequent Contributor

Re: Next steps to healthy credit

As others have stated you're not in a horrible place with your credit. Yes it will take some cleaning up but starting on it now will get you want to be in the next few years(sooner thanyou probably think). I would suggest checking your pre qualify options for Navy. Good card to have especially if you ever need a balance transfer. Good luck on your rebuild and thanks for being open about your credit. It will help a lot of people who are struggling to rebuild. Again wish you the best of luck.

Message 9 of 16
Grizzygains
New Member

Re: Next steps to healthy credit

To provide some more context and clarity, I'll add a little bit of background.

 

The two navient loans are PRIVATE and not federal. Also they were closed and sent to collections for non payment as I was unemployed for over a year back in Late 2011 to 2013. During that time I had to ration funds. At first I went on an income based plan however with $0 income for an extended period of time, even that plan I just couldn't afford after a while. Whenever I contact navient, they tell me at this point they will only accept payment in the full amount if I go through them as the accounts have been closed for years. The communications I have from the various debt collection agencies are basically settlement offers the debt collection agencies are willing to take. I believe the best offer so far I've gotten is around 6-9k. I am currently evaluating these offers as I go through my rebuild. Ideally I would like an offer that would include removal of the file but I do not know if that is possible. At some point in the next few months I will probably be accepting the best settlement offer I can get. I would like to know what type of impact this will have on my credit or how it would be viewed if I attempted to  get a mortgage in the near future.

 

As far as the boa account, if the dates confuse you then they confuse me twice as much. This along with the navient accounts are being disputed for accuracy. I closed the account myself and entered into a payment plan with boa and paid the balance off. This must've been around 7 years ago.

 

As far as income I would consider my current income as good. It increases every year and I am able to cover all my bills and expenses in addition to aggressively save. I am employed in a very stable industry and have been continuously employed since 2013. I am not sure why an insinuation was made I am living above my means. I haven't had any new derrogs since I was Reemployed.

 

I will definitely look into the NFCU pre-approval options. Let me know if there's anything else I should be looking at.

 

 

Message 10 of 16
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