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29 with a 428 - Need help strategizing for repair

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29 with a 428 - Need help strategizing for repair

Hi All - This is my first post on myFICO after trolling through quite a few threads. Please go easy if this is the wrong sub-section to post on. I have a feeling this might be better spread over a few sub forums. ::/

I have a 428 and personal finance is my "blind spot" in adult life. Something that I get great anxiety from and usually avoid at all costs. But I want to get that under control and manage my money well. I'm close to the big 3-0 and want to be able to get a small car or boat loan or mortgage in the future, have 6mo of expenses saved, retirement, etc

The base line:
-I make $22/hr and between overtime and other stuff I make about $50k per year and I do pretty well at work.

-I live with my girlfriend, in fact moved across the country to RURAL Northern Michigan so we could be close to her family. My overhead expenses are low. Like really really low.

-She is a pharmacist fresh out of school with a great job, and manages her finances well. She also has her student loans, and her mortgage on the house we live in. IIRC her FICO score is like 750-780 with all of that debt and income. I want to be like her in this regard. However she is financially strained with everything so it's imperative that I take on more active role in our  finances. 

My debt:
-10,400 in student loans that were in default, and have recently been rehabed. I'm back on my feet. However the company that was handling the rehab sold my loans off (coastprofessional sold to FedLoan Servicing). Never told me, and I got 122 days behind on paying them, as I thought I was golden and had auto pay. I contacted them and got up to date on 9/17/19, but I believe they dinged my credit. I have gotten, but not filed, a form/letter to request they undo this as they never contacted me either. Whole thing is shady.

-I have two collections on medical bills, they total about $414 dollars. One is 5 years old and one is 2 years and 7 mo.

-I have 0 credit card debt. In fact at 29 I have never had a credit card. I've bought all my cars with cash, all deposits for apartments - cash, emergency vet bills - cash. The reason I did this was because I didn't like the idea of paying someone interest on my own money and financial anxiety. In hindsight this is bad. I understand that leveraging credit can be good, and credit history is obviously good.

What's happening recently:
-Its northern f#$(%ing michigan and I'm from the south. I need a 4x4 to get around for my job. Potentially I need to commute 50 miles or more in sevre blizzard/polar vortex conditions. People's lives could literally be at stake if I get stuck as I work for a hospital,  but this is unlikely. I can't find a car for what I have saved in cash for this and I can't get a loan, precipitating addressing my problems with finance.

 

-Collections upped one account by $20. This and the loans dropped my score from 535ish to 428 as they're the only recent credit history.

-I recently inherited $10k from a deceseaed relative. I have spent $5700 of this.

-The $5700 went to student loans. I paid off a 6.8% loan of about $750, and a 3.4% loan of 3300. I paid ~ $1100 onto the third and largest loan. All the backed interest is paid on this and some of the principal is paid down. I have minimum payments of $76/mo and I add about $1.25 per day in interest right now. I upped the payments to $115/mo as I can afford this and it effectively will cut a 9 year repayment to 3.8 years. I could go faster but it seems like diminishing returns with only marginally faster pay off and less interest over the life. (total remaining is $4776)

- I have $3250 in checking and saving in my old bank (BB&T) in the South and a 5 year good history with them. I have $4300 in a new PNC virtual wallet premium account that has the fees waved from my income being direct deposited. The PNC virtual wallet is actually 3 accounts checking, short term saving and long term saving. They have a lot of personal finance tools available.

-I have a beautiful car I've put a lot of blood sweat and tears into that I've always wanted as they came out when I graduated high school. I got it cheap, and cleaned it up. Its red, two door, honda, big motor, and manual trans. I do not want to sell it. I could probably get $5k-6k out of it.


What do I do now?
I don't know. I'm in a weird spot as I have very litle credit history, and I think manageable debt. But I'm kinda backed into a corner because of the history. Couldn't find many posts similar to this situation :/
Cash total: $7550 
Assets: $5000 (car)
Debt total: $5190
FICO score: 428

I think I should pay off the collections this week, I have the cash, and I want to bargin them to pay-in full-delete the records. They're both regional mom and pop places. Recievable Management Systems in Richmond, VA and Credit Control Corporation in Newport News, VA. If they won't play ball just pay em anyways. What are my chances on the PiFD?

I'm trying to talk my girlfriend into adding me as an Authorized User onto her USAA OR Discover Card (which I actually have on me for emergencies). She has 16 years of credit history roughly.

If I can get the AU with her, open 2 credit cards or 3, put all the utility bills on my cards, and auto pay them off. They total around $250 per month. I could also put the food bills on if its a good idea, as I already pay for them. I would like to be putting $400 per month into our bills and get the stress off her. I already do this, but its not tracked and I think I could leverage this for my benefit. 
Is this AU/Card scheme a good idea? How do I time this effectively?

I need a 4x4. I really need to get my car off the road, out of the salt and snow, and put something in its place. I think Nov/Thanksgiving might be my drop dead - must have it date. I think I need to spend about $5k on a vehicle, and $2k on winterizing it. Is this viable with my credit situation? Should I try to go 50/50 on cash and credit? Should I try to go cash here? What is the best for my FICO score?


Any help at all is so greatly appreciated, and please, if there is a section that should be posted to another forum, or all of it, let me know! Thank you!

46 REPLIES 46
Valued Contributor

Re: 29 with a 428 - Need help strategizing for repair


@WilburB wrote:

My debt:
-10,400 in student loans that were in default, and have recently been rehabed. I'm back on my feet. However the company that was handling the rehab sold my loans off (coastprofessional sold to FedLoan Servicing). Never told me, and I got 122 days behind on paying them, as I thought I was golden and had auto pay. I contacted them and got up to date on 9/17/19, but I believe they dinged my credit. I have gotten, but not filed, a form/letter to request they undo this as they never contacted me either. Whole thing is shady.
Hopefully, more experienced members can comment on best course of action. Those delinquencies will hurt you unless removed.


-I have two collections on medical bills, they total about $414 dollars. One is 5 years old and one is 2 years and 7 mo.

Google the HIPPA process. We can't discuss it here on the forum. It should be a simple process.


I think I should pay off the collections this week, I have the cash, and I want to bargin them to pay-in full-delete the records. They're both regional mom and pop places. Recievable Management Systems in Richmond, VA and Credit Control Corporation in Newport News, VA. If they won't play ball just pay em anyways. What are my chances on the PiFD?

I'm not familiar with those collection agencies. Try to request Pay For Delete.


I'm trying to talk my girlfriend into adding me as an Authorized User onto her USAA OR Discover Card (which I actually have on me for emergencies). She has 16 years of credit history roughly.
Yes, add yourself as authorized user on the old accounts, it would benefit you as long as the utilization % is at a reasonable number.


If I can get the AU with her, open 2 credit cards or 3, put all the utility bills on my cards, and auto pay them off. They total around $250 per month. I could also put the food bills on if its a good idea, as I already pay for them. I would like to be putting $400 per month into our bills and get the stress off her. I already do this, but its not tracked and I think I could leverage this for my benefit. 
Is this AU/Card scheme a good idea? How do I time this effectively?

I would not recommend applying for your own primary credit cards unless you take care of the collections first.

Yes, add yourself as an authorized user. The sooner the better.

I need a 4x4. I really need to get my car off the road, out of the salt and snow, and put something in its place. I think Nov/Thanksgiving might be my drop dead - must have it date. I think I need to spend about $5k on a vehicle, and $2k on winterizing it. Is this viable with my credit situation? Should I try to go 50/50 on cash and credit? Should I try to go cash here? What is the best for my FICO score?
Your timeline is short for credit repair vs vehicle purchase. I would recommend joining a local credit union or DCU. It'll be a soft pull EQ for DCU membership. Credit Unions offer used vehicle loan rates depending on the age. Let your membership account marinate. However, you need to repair your credit first before considering a vehicle loan. Your current FICO score will impact your approval odds and APR %.

Any help at all is so greatly appreciated, and please, if there is a section that should be posted to another forum, or all of it, let me know! Thank you!


See comments in red.

 

You have good income and low DTI. Your debt appears to be manageable. What's hurting you now is the collections and delinquencies. Clean up your credit report first before applying for your own credit cards, vehicle loans. You will be denied or get unfavorable credit limits or high interest rate credit cards and vehicle loans based on your current credit profile.

 

Consider alternate means of purchasing a 4x4 to meet your needs while you are repairing your credit.

 

You will see a score boost once you address those collection and delinquencies. Putting you in a better credit situation. Making your profile more attractive to lenders.

Message 2 of 47
Valued Contributor

Re: 29 with a 428 - Need help strategizing for repair

You mentioned USAA. Is your GF a member of Navy Federal Credit Union?

Do you have any military affiliation; directly or immediate relatives?
Message 3 of 47
New Member

Re: 29 with a 428 - Need help strategizing for repair

Thank you!

I can pay off the collections immediately, or as soon as they open tomorrow. I have their numbers and hours ready to go for when I get home tomorrow evening. And I will likely pay within the week regardless of a PFD deal. Its the next steps im not so certain of.

Message 4 of 47
New Member

Re: 29 with a 428 - Need help strategizing for repair

USAA is open to everyone and she has navy federal, or rather she had a rarely used personal checking account that she closed this past week.
Her ex husband (divorced about a year ago after being seperated for awhile) and her share a checking account. Though they are divorced they have a kind of informal alimony thing going on til he's out of nursing school. The ex husband was recently honorably discharged.

Grandmother is widowed from a 2 star General. She gave my mother USAA, and in turn I got it. But I also left it because the insurance was insanely high.

So not really any direct connection to the military. Why do you ask?

Message 5 of 47
Senior Contributor

Re: 29 with a 428 - Need help strategizing for repair


@WilburB wrote:

Hi All - This is my first post on myFICO after trolling through quite a few threads. Please go easy if this is the wrong sub-section to post on. I have a feeling this might be better spread over a few sub forums. ::/

I have a 428 and personal finance is my "blind spot" in adult life. Something that I get great anxiety from and usually avoid at all costs. But I want to get that under control and manage my money well. I'm close to the big 3-0 and want to be able to get a small car or boat loan or mortgage in the future, have 6mo of expenses saved, retirement, etc

The base line:
-I make $22/hr and between overtime and other stuff I make about $50k per year and I do pretty well at work.

-I live with my girlfriend, in fact moved across the country to RURAL Northern Michigan so we could be close to her family. My overhead expenses are low. Like really really low.

-She is a pharmacist fresh out of school with a great job, and manages her finances well. She also has her student loans, and her mortgage on the house we live in. IIRC her FICO score is like 750-780 with all of that debt and income. I want to be like her in this regard. However she is financially strained with everything so it's imperative that I take on more active role in our  finances. 

My debt:
-10,400 in student loans that were in default, and have recently been rehabed. I'm back on my feet. However the company that was handling the rehab sold my loans off (coastprofessional sold to FedLoan Servicing). Never told me, and I got 122 days behind on paying them, as I thought I was golden and had auto pay. I contacted them and got up to date on 9/17/19, but I believe they dinged my credit. I have gotten, but not filed, a form/letter to request they undo this as they never contacted me either. Whole thing is shady.

-I have two collections on medical bills, they total about $414 dollars. One is 5 years old and one is 2 years and 7 mo.

-I have 0 credit card debt. In fact at 29 I have never had a credit card. I've bought all my cars with cash, all deposits for apartments - cash, emergency vet bills - cash. The reason I did this was because I didn't like the idea of paying someone interest on my own money and financial anxiety. In hindsight this is bad. I understand that leveraging credit can be good, and credit history is obviously good.

What's happening recently:
-Its northern f#$(%ing michigan and I'm from the south. I need a 4x4 to get around for my job. Potentially I need to commute 50 miles or more in sevre blizzard/polar vortex conditions. People's lives could literally be at stake if I get stuck as I work for a hospital,  but this is unlikely. I can't find a car for what I have saved in cash for this and I can't get a loan, precipitating addressing my problems with finance.

 

-Collections upped one account by $20. This and the loans dropped my score from 535ish to 428 as they're the only recent credit history.

-I recently inherited $10k from a deceseaed relative. I have spent $5700 of this.

-The $5700 went to student loans. I paid off a 6.8% loan of about $750, and a 3.4% loan of 3300. I paid ~ $1100 onto the third and largest loan. All the backed interest is paid on this and some of the principal is paid down. I have minimum payments of $76/mo and I add about $1.25 per day in interest right now. I upped the payments to $115/mo as I can afford this and it effectively will cut a 9 year repayment to 3.8 years. I could go faster but it seems like diminishing returns with only marginally faster pay off and less interest over the life. (total remaining is $4776)

- I have $3250 in checking and saving in my old bank (BB&T) in the South and a 5 year good history with them. I have $4300 in a new PNC virtual wallet premium account that has the fees waved from my income being direct deposited. The PNC virtual wallet is actually 3 accounts checking, short term saving and long term saving. They have a lot of personal finance tools available.

-I have a beautiful car I've put a lot of blood sweat and tears into that I've always wanted as they came out when I graduated high school. I got it cheap, and cleaned it up. Its red, two door, honda, big motor, and manual trans. I do not want to sell it. I could probably get $5k-6k out of it.


What do I do now?
I don't know. I'm in a weird spot as I have very litle credit history, and I think manageable debt. But I'm kinda backed into a corner because of the history. Couldn't find many posts similar to this situation :/
Cash total: $7550 
Assets: $5000 (car)
Debt total: $5190
FICO score: 428

I think I should pay off the collections this week, I have the cash, and I want to bargin them to pay-in full-delete the records. They're both regional mom and pop places. Recievable Management Systems in Richmond, VA and Credit Control Corporation in Newport News, VA. If they won't play ball just pay em anyways. What are my chances on the PiFD?

I'm trying to talk my girlfriend into adding me as an Authorized User onto her USAA OR Discover Card (which I actually have on me for emergencies). She has 16 years of credit history roughly.

If I can get the AU with her, open 2 credit cards or 3, put all the utility bills on my cards, and auto pay them off. They total around $250 per month. I could also put the food bills on if its a good idea, as I already pay for them. I would like to be putting $400 per month into our bills and get the stress off her. I already do this, but its not tracked and I think I could leverage this for my benefit. 
Is this AU/Card scheme a good idea? How do I time this effectively?

I need a 4x4. I really need to get my car off the road, out of the salt and snow, and put something in its place. I think Nov/Thanksgiving might be my drop dead - must have it date. I think I need to spend about $5k on a vehicle, and $2k on winterizing it. Is this viable with my credit situation? Should I try to go 50/50 on cash and credit? Should I try to go cash here? What is the best for my FICO score?


Any help at all is so greatly appreciated, and please, if there is a section that should be posted to another forum, or all of it, let me know! Thank you!


@AllZerogave some good advice. I'm just going to add this. In red. Its time to get a secured card or 2. You have no revolving credit on your file. This is where you would gain some points in the credit mix. Since your scores are low. You could get an OpenSky secured card with no HP and do what you say by putting some bills on it and then pay it off. As you work on clearing the debts. In a few months try for another card. Each one will raise your scores some. You got the installments. You need some revolvers and that will do a lot.

 

Side note: If you want to quote a certain poster. Hit reply to the post you want to answer. Then click "quote" top right of reply page. Type your quote. Post





My posts are JMHO. I DO NOT claim to be a FICO expert. Just sharing my experiences from rebuild to recovery after BK DC. My siggy is not to brag at all. Just to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 6 of 47
Valued Contributor

Re: 29 with a 428 - Need help strategizing for repair


@WilburB wrote:

USAA is open to everyone and she has navy federal, or rather she had a rarely used personal checking account that she closed this past week.
Her ex husband (divorced about a year ago after being seperated for awhile) and her share a checking account. Though they are divorced they have a kind of informal alimony thing going on til he's out of nursing school. The ex husband was recently honorably discharged.

Grandmother is widowed from a 2 star General. She gave my mother USAA, and in turn I got it. But I also left it because the insurance was insanely high.

So not really any direct connection to the military. Why do you ask?


Maybe she should reconsider opening her own primary account with Navy?

 

Trying to set you up for your future. Navy is one of the best CUs out there. They offer a lot of products: credit cards, checking line of credit, mortgage and vehicle loans, etc.

 

See link for requirements. It appears you are eligible through your grandfather.

https://membership.navyfederal.org/#/step/eligibility-choices

 

It's nice to have credit union choices. Even though you might not use USAA products eg insurance, it could still benefit you being a member for the unforeseeable future.

Message 7 of 47
Community Leader
Senior Contributor

Re: 29 with a 428 - Need help strategizing for repair


@AllZero wrote:

@WilburB wrote:

USAA is open to everyone and she has navy federal, or rather she had a rarely used personal checking account that she closed this past week.
Her ex husband (divorced about a year ago after being seperated for awhile) and her share a checking account. Though they are divorced they have a kind of informal alimony thing going on til he's out of nursing school. The ex husband was recently honorably discharged.

Grandmother is widowed from a 2 star General. She gave my mother USAA, and in turn I got it. But I also left it because the insurance was insanely high.

So not really any direct connection to the military. Why do you ask?


Maybe she should reconsider opening her own primary account with Navy?

 

Trying to set you up for your future. Navy is one of the best CUs out there. They offer a lot of products: credit cards, checking line of credit, mortgage and vehicle loans, etc.

 

See link for requirements. It appears you are eligible through your grandfather.

https://membership.navyfederal.org/#/step/eligibility-choices

 

It's nice to have credit union choices. Even though you might not use USAA products eg insurance, it could still benefit you being a member for the unforeseeable future.


+1 Yes she definitely needs to see about reopening Navy, that is one of the best CUs out there,  which could help you both down the road. 

 

**USAA is not open to everyone though,  you need  a military affiliation. 

EXP 760 TU 781 EQ 733
Message 8 of 47
Valued Contributor

Re: 29 with a 428 - Need help strategizing for repair


@WilburB wrote:

Thank you!

I can pay off the collections immediately, or as soon as they open tomorrow. I have their numbers and hours ready to go for when I get home tomorrow evening. And I will likely pay within the week regardless of a PFD deal. Its the next steps im not so certain of.


Are those collection medical related? See the HIPPA comment.

 

If not, PFD is the best scenario. The cleaner your report, the better. But paid collection is better than unpaid.

Message 9 of 47
New Member

Re: 29 with a 428 - Need help strategizing for repair


@AllZero wrote:

Maybe she should reconsider opening her own primary account with Navy?

She likes USAA, but she still has access to Navy through the joint account. I can ask. I got a lot more info from her as she just got in from work and we talked a bit about this.

 

Trying to set you up for your future. Navy is one of the best CUs out there. They offer a lot of products: credit cards, checking line of credit, mortgage and vehicle loans, etc.

 

See link for requirements. It appears you are eligible through your grandfather.

https://membership.navyfederal.org/#/step/eligibility-choices

 

It's nice to have credit union choices. Even though you might not use USAA products eg insurance, it could still benefit you being a member for the unforeseeable future.

I may be able to join Navy, but I should clarify that he was not my biological Grandfather. In spirit, in practice, but not by blood. Grandma's 2nd husband. I think I meet their req's however.


 

Message 10 of 47
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