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1.2 Million dollar loan. 461 Credit Score

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Anonymous
Not applicable

1.2 Million dollar loan. 461 Credit Score

My TransUnion is 461 and my Equifax is 501.
I have the following which are in CO all 2.5 years old.
Car repot $5500
Eviction $6,000
Rental repairs $290
Interernet $300
Bank $150

Does the score go up with amount spent or the amount of time? I spend roughly about $15,000-$20,000 every 3 months on repairs cash. Right now I only have access to a $2500 secured card but have not signed up yet. If I need to spend $6,000 for a month in supplies, will my credit go up quicker keeping the 30% rule and paying my 30% credit card debt every few days in large quantities even though I'm putting $6,000 on a $2500$ CC every month? Or will it increase the same regardless of how much or little I spend on the card as long as I keep the 30% rule?

In 2 years in looking to get a loan for 1.2 million with $350,000 as a down payment for a highly profitable business but im trying to figure if more money means quicker credit recovery and if paying these debts in collection will have any benefit. Thank you!
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3 REPLIES 3
Jnbmom
Credit Mentor

Re: 1.2 Million dollar loan. 461 Credit Score

First off, if you have that money I would pay your debt obligations , see if you can get PFD and clean up your negatives first. That right there is killing your scores.

EXP 780 EQ 791TU 795
Message 2 of 4
Anonymous
Not applicable

Re: 1.2 Million dollar loan. 461 Credit Score

Thanks Jnbmom! I never heard of that but looked into it and that would be excellent!

As far as going over the CC limit but topping off at 30%. Is this beneficial or negative or the same as just a few hundred a month vs 6000? How does a loan company look at stuff like that?
Message 3 of 4
silver_idle
Established Contributor

Re: 1.2 Million dollar loan. 461 Credit Score

Spending less will show creditors that youre using credit responsibility. The 30% rule is generally to keep your balance low. Some do spend as much as 50% is still going good with credit because they are usually paying it off in full instead of carrying a balance. You never want to really max out your credit limit, let alone, go over it (if the creditor allows it) as that usually sends a red flag to other creditors that arent responsible. 

 

Next, if you have the money, its best to do a PFD. This can usually means settle or PIF (though most CA will want to be PIF to do a PFD, but some do allow one to settle and they may remove the item anyway). 

 

A small off topic note (but still related to OP): If youre planning to get a loan to buy a business, you may want to incorporate into either a corp or an llc and build the business up so you can get a business loan with that entity instead of you personally. Though it may be unlikely that you will be able to get one without going a PG, its still worth the shot, especially if youre planning on doing a down payment, put that money into a business account (maybe a business savings account), and while you are rebuilding your personal credit, build your business credit up so when its time to sit down with a LO to pitch to them why you want this loan, you will have business credit plus the money to use as a down payment. Maybe build a relationship with the bank first since this would be a serious purchase, and since you are putting down payment around 30% towards the loan, they may take you serious and allow you to do it without a PG. From there you can purchase the profitable business, merge that business into your own and continue operation to pay off the loan, all while maintaining limited liability. While I do not know what business youre referring too, keep in mind that you would want to do due diligence before doing any major purchase like this. If this isnt to buy a business but just for a business loan, this can still go a long way and to reduce your liability. 

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