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Next steps to healthy credit

Community Leader
Super Contributor

Re: Next steps to healthy credit

Let's see if we can get @calyx to chime in some of her extensive loan knowledge. Maybe there's another possibility lying out there that you're not being told.

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Message 11 of 16
Regular Contributor

Re: Next steps to healthy credit

@chiefone4u wrote:

@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.


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. 


I had $150,000 in business debts plus attorney fees to close and end the business relationship. I had to sell off everything I owned of value and lived frugally. I learned the only way to correct bad credit is to start paying down what you owe. When I returned to work, at my rent, auto insurance and other expenses, I used a large portion to pay down my debts. I paid cash for groceries and scrimped. 

My car was paid for but had high mileage. I did most of the maintenance myself. I had to get a new car but by 2018 I was back on my feet. I bid my car which had 350,000 miles gooodbye. This experience is why my utilization is less than 2% and I am very cognizant of what I spend and why. 

Message 12 of 16
New Member

Re: Next steps to healthy credit



Thanks for your advice. I just applied for the NFCU Amex card and got approved for 3k limit!

Message 13 of 16
Frequent Contributor

Re: Next steps to healthy credit

@Grizzygains wrote:



Thanks for your advice. I just applied for the NFCU Amex card and got approved for 3k limit!

Nice. Congrats. That limit will increase big and fast. Also the more rewards is my favorite NFCU card 😁

Message 14 of 16
Established Contributor

Re: Next steps to healthy credit

Congratulations on making good first steps! 

EX: 728 (+65)| TU: 741 (+81)| EQ: 747 (+102)| TU Fico 9: 704

Next Goal: Min. 740 w/all CRAs

Subsequent Goal(s): Min. 760 w/all CRA & Chase FU

Gardening Until: 06/20/2021| Last App: 5/27/2020
Message 15 of 16
Super 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:



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




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.

1. I don't think there's anything wrong with using a credit repair company in your situation.

2. You should keep your individual revolving accounts reporting at 28% or less of the credit limit.

3. You should keep your aggregate of revolving accounts reporting at 8.9% or less. But the lower the better, as long as at least one account reports a small balance each month before you pay it off.

4. Once you pay your car loan down to 9% of the original amount you'll get a strong boost in certain of the scoring models, and you might pick up a few points here and there on the way down to 9%.

5. In terms of credit score, there's no reason on earth for you to apply for anything new. Since you're an NFCU member you might want to try one of their offerings, but expect your score to decrease, not increase, when you do.

Total revolving limits 653000 (575000 reporting) FICO 8: EQ 716 TU 747 EX 715

Message 16 of 16
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