Back to Reality and Adulting... Cleaning up Credit...Any suggestions welcomed!!

[Anonymous]

Hello All...

  Well I'm finally brave enough after months of lurking to come out and ask for help or suggestions.  In 2016 I had the unfortunate experience of going to prison for two years.... pulling out a gun on a guy when you're drunk is frowned upon..   Needless to say...I did my time...and before you ask no its NOT like Orange is the New Black..prison sucks..lol...LESSON LEARNED.... I am just beyond blessed that my education and years of work experience helped me get out and get right back into the swing of things.  So definitely have a great income coming in.  When I got home my Fico was 472  this of course stemmed from nothing getting paid for two years.  I also had a charge off for a vehicle from 2013 which only Transunion honored my divorce decree and removed it .    I also had several accounts I was able to get deleted that were opened under my name while I was incarcerated.  Submitted my paperwork and they came off immediately.  Since then I have raised my scores to Ex 552, TU 585, Eq 570 .... Here is what I have on my report 

Fed Loan Service $16,349  Excellent Payment History this is on all 3 Credit Reports 

My baddies

Midwest Recovery $446, I have paid down on it and only owe $104 left on it which is set to autopay on the 25th and that will be done. 

University of Phoeniz $662  once midwest is done I will then set up a PFD plan for this account.

Credit... I HAVE NONE!!!  I just got approved for a $300 cap one unsecured card which I set my wifi bill to $45 and auto pay for 2 weeks before due date to pay the balance off each month... This card has not started reporting yet.  Only had it a month.

My question... The car loan charge off is set to fall off May 2020...do I just let this take its course and fall off?  The other two credit bureaus will not honor my divorce decree where it says my ex was going to be responsible for it, so its stuck on there.  I was considering setting up a PFD plan...but then thought its going to fall off soon I could put that extra money towards something else to help build my credit.  

2nd question..where do I go from here 552 Fico is less than stellar and Im sure it will move up soon once Midwest falls off at the end of this month...but I have no credit line except for Cap One which hasn't started reporting yet...  Any help would be greatly appreciated!!!

TIA

Daniella 

[dynamicvb]

You want a little to report on your card, 5 bucks are so or you don't get the credit mix bump. You need an open installment loan so you may wna to look into Self Lender or one of the other SSL loan programs around. That will give you the correct credit mix and help your scores probably a good bit now.

Other than that and paying off the charge offs, you should sit tight and let your scores come up some before trying for any other cards. 

I probably would not worry about the repo either. You can request an early exclusion from TU at 6 months, EX at 3 months( its probably already factored in there), an EQ maybe a month but who knows with them.

[Anonymous]

Agreed on the car. A judge said you weren’t responsible for it so let it go. On February 1 you can ask Experian to remove it. Let it fall off of Equifax on its own - they’ll just screw it up. As for the rest, keep the good-standing accounts in good standing, work on goodwill letters to the creditors who are paid and now just sitting on your reports, and try to arrange a pay-for-delete with any that you have yet to start paying. That stuff plus time will heal your scores.

[Anonymous]

@dynamicvb, she already has the student loans on her reports so that should cover the installment portion for credit mix.

[calyx]

You should get a nice boost once your cap1 reports.

I would not bother with the auto loan and let it fall off in 2020, but that's me.  As has been mentioned, TU does an early exclusion at 6 months, EX at 3 (though there has been mixed success with this and it may also already be "built in"), and I wouldn't bother with EQ, because they only allow one month and more often than not it seems to go wrong.

Getting an additional card on your report might also help as well - check the Discover prequalify link, and see if you can get preapproved - you could also take extra money and put down a deposit for a discover secured card (it will graduate with responsible use and gives rewards while secured).     

Getting a self lender or other shared/secured loan will not help you since you already have installment loans reporting (your student loans).

Good luck!

[Anonymous]

Thank you everyone!!!  I was unsure which direction to head into since I've seemed to already have taken care of any negative items I had on my report, it was now just an establishing issue for me.  I am going to let the Midwest come off at the end of my month and let the extra points increase help me with trying for the Discover Secured card.  With that and the Cap One I think I should be ok for now....just gotta give it time!

[Queen_Etherea]

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@Anonymous wrote:

Thank you everyone!!!  I was unsure which direction to head into since I've seemed to already have taken care of any negative items I had on my report, it was now just an establishing issue for me.  I am going to let the Midwest come off at the end of my month and let the extra points increase help me with trying for the Discover Secured card.  With that and the Cap One I think I should be ok for now....just gotta give it time!

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Yes!! Patience is a must when it comes to credit. Don't try to open too many accounts at once like I did. Don't get me wrong, I love the cards I have, but I should have spaced them out better. I would absolutely recommend Discover if you pre-qualify. Seems like you're doing great and things will fall into place if you keep doing what you're doing!

[Chestnut1]

As others mentioned here, I would not worry about that repo as it is going to fall off soon. However, you have just one Secured card at the moment. You certainly need a good mix of Credit. You should try get a small car, maybe <$10,000 on an Auto Loan. don't worry, the local car dealers WILL WORK to get you a loan on a higher interest. Don't worry about higher interest. this will add a sweet Installement Loan account to your credit wallet. Next, check for some Discover Pre-qualify cards ( could be secured ) and get one. Your wallet now will be 2 CCs + An Installement Loan account. This is when your actual journey starts.

1. Pay the loan EMI without fail every month ( remember the Timely payments is one of the factors used to calculate that credit score ).

2. If i were you, i would not pay off my CC balances completely all in one month. What it does is it will increase your score that month but just stops after. Say your CC total balance is $500. I would pay $150 Next month. That will give some boost to my credit score. and another $150 a month later, increasing it further. then i will let the remaining $200 hover around for bit ( but pay minimum wihtout fail everymonth). I will let all the accounts age a bit. You will be lucky if you can get a CLI during this time. When you feel your accounts are taking shape slowly. I will now go and pay off $100 on that total credit card balance. this might increase the score by 2/3 points. I will now follow the same rule again, Will let this $100 balance hover around for a bit while letting the accounts age and get seasoned. One fine day, I will pay off $80. brining the balance to $20 <5%. This will give a good boost to your scores as your accounts aged by now, your payment history is getting reported and your UTL has gone below 5%. 

But remember one thing. This is a long journey. It took my almost 2 years from the day i seriously started working on it to get the scores from lower 500s to higher 600s. I'm still working on it. Good luck on this journey. may the force be with you my friend. 

Other Senior members- please correct me if my above advise is misleading. Will be happy to correct and learn along the way.