Need your advise

[Mashay]

I am new to credit building and I have made some poor financial decisions. I am trying to increase my credit rating. I have a student loan, car loan, no mortgage, and I just got a Discover secured card. I also have a personal loan which I recently paid off and closed. This seemed to have affected ny credit (I later learnt I shouldn't have. By paying off and closing that personal loan, I offset my credit mix. I am in the upper 500's. Can you suggest how to fix this? Also need the best installmet loan options I can get to fix my credit mix while also purchasing an appliance, preferrably with no interest rate. I only have 2 hard inquiries. Thanks

[Patient957]

I wouldn't worry about your credit mix.  With scores in the high 500s, the main thing keeping your score down is the derogs.  You'll get better advice here if you list your accounts, with balances and current statuses.  Be sure to list any charge offs, accounts with late payments, collections, and any other derogs.

[GZG]

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@Mashay wrote:

 I have made some poor financial decisions.  Can you suggest how to fix this?

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pay them back

you're not going to make meaningful credit improvements until all derogatory/deliqent tradelines reflect a $0 balance or are removed from your report entirely 

[JoeRockhead]

Credit mix is only a small part of your score, and not something you should be concerned about right now.  The two biggest factors you should be most concerned with are your revolving utilization, and your payment history.  As stated, you could share what kind of derogatory information you have on your reports and when these things went sideways.  With more information other members may be able to suggest the best path forward. 

Welcome to the forum.

[Mashay]

Thank you kindly for your advise and that's why I am here. See below has requested. Not all accounts show up on all credit bureaus. I have a settlement plan going on with two accounts already. 

1 credit card Charge off- $1240, date opened-Apr 14, 2022

1 School Collection- $1774 (being settled, should be paid off by month end) Date opened-2023. Only reports to one CB.

1 Car note- Original balance $18,553, current balance-$9,116 (with 12 late payments).Date opened 4/1/21. Currently in good standing.

No mortage

School loan- Original balance- $31,135, Current balance- $32,507

1 personal loan recently paid off

My rent reports (In good standing) date opened 9/9/23

All other accounts are closed mostly in good standing with the exception of a verizon collection opened in 2017 paid off in Mar 31, 2021.

I recently signed up for a discovery secured card

2 hard inquiries

[JoeRockhead]

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@Mashay wrote:

Thank you kindly for your advise and that's why I am here. See below has requested. Not all accounts show up on all credit bureaus. I have a settlement plan going on with two accounts already. 

1 credit card Charge off- $1240, date opened-Apr 14, 2022

1 School Collection- $1774 (being settled, should be paid off by month end) Date opened-2023. Only reports to one CB.

1 Car note- Original balance $18,553, current balance-$9,116 (with 12 late payments).Date opened 4/1/21. Currently in good standing.

No mortage

School loan- Original balance- $31,135, Current balance- $32,507

1 personal loan recently paid off

My rent reports (In good standing) date opened 9/9/23

All other accounts are closed mostly in good standing with the exception of a verizon collection opened in 2017 paid off in Mar 31, 2021.

I recently signed up for a discovery secured card

2 hard inquiries

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Appreciate all the information, but we really need to know what the DOFD (date of first default) on these accounts were.  The DOFD would be the first date the account went into default (30 day late) and was never brought back current, and subsequently went to charge off status.  The DOFD also is what starts the clock for the information falling off your report.

If you don't know already, you can go to Annual Credit Report and get accurate reports from all three bureaus for free every 7 days.  

[Mashay]

When I paid off the personal loan, my credit score on CK dropped by 51points.

[Mashay]

1 credit card Charge off- $1240, date opened-Apr 14, 2022.Date of First Delinquency June 1, 2023

1 School Collection- $1774 (being settled, should be paid off by month end) Date opened-2023. Only reports to one CB.Date of First DelinquencyFeb 16, 2024

1 Car note- Original balance $18,553, current balance-$9,116 (with 12 late payments).Date opened 4/1/21. Currently in good standing.Date of First Delinquency-none stated. Staus- pays as agreed

No mortage

School loan- Original balance- $31,135, Current balance- $32,507

1 personal loan recently paid off

My rent reports (In good standing) date opened 9/9/23

All other accounts are closed mostly in good standing with the exception of a verizon collection opened in 2017 paid off in Mar 31, 2021.

Date of First Delinquency. Apr 25, 2019. Status-Paid collection

I recently signed up for a discovery secured card

2 hard inquiries

[Cowboys4Life]

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@Mashay wrote:

1 credit card Charge off- $1240, date opened-Apr 14, 2022.Date of First Delinquency June 1, 2023

1 School Collection- $1774 (being settled, should be paid off by month end) Date opened-2023. Only reports to one CB.Date of First DelinquencyFeb 16, 2024

1 Car note- Original balance $18,553, current balance-$9,116 (with 12 late payments).Date opened 4/1/21. Currently in good standing.Date of First Delinquency-none stated. Staus- pays as agreed

No mortage

School loan- Original balance- $31,135, Current balance- $32,507

1 personal loan recently paid off

My rent reports (In good standing) date opened 9/9/23

All other accounts are closed mostly in good standing with the exception of a verizon collection opened in 2017 paid off in Mar 31, 2021.

Date of First Delinquency. Apr 25, 2019. Status-Paid collection

I recently signed up for a discovery secured card

2 hard inquiries

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Paid collections are better than unpaid and the damage lessens as time passes.

The biggest things killing your score(s) right now are the 12 late payments, the charge off, and the collection.  The best thing you can do right now is get collections paid off.  See if they will do a good will removal after paying or PFD if not already settled.  If you had one late on the car note you could probably get a good will removal, 2 lates maybe, 12?  Nope not going to happen so all you can do is put time between you and those late payments.  The longer you stay in good standing and don't have lates the less damage they do.

Focus on managing your debt for the next few months:  having no lates, no new collections, paying off others, deletions and you will start to see score improvements over time.

[Patient957]

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@Mashay wrote:

When I paid off the personal loan, my credit score on CK dropped by 51points.

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Your CK score is a Vantage 3.0 score, which doesn't matter as much as your Fico scores.  If you don't already have a free Experian account, then sign up now.  You'll get a free Fico 8 score with daily updates.  You should focus on improving your Fico 8 and good things will follow from there.

Paying off your personal loan likely increased your aggregate balance to loan ratio, and this may be at least part of the reason for your score drop.  There could be other contributing factors as well, but either way, adding a new loan at 100% B/L isn't likely to get you any points back.