How to increase MyFico Score with small credit limits and unresolved collections?

[Anonymous]

Need Help Desperately. 

I'm trying to buy my first home and seeking some solid advice on how to get my credit score from 602 to 720 by March 2010.

This the whole run down on what I'm facing.

Currently, I have 3 CC, details below:

1. Orchard Bank - limit is $320, balance is at $300

2. Credit One Bank - Limit is $200, balance is at $197

3. First Premier Bank - limit was $200, but closed the account and paid the balance down to $79 to date

When I initially received the cards I only used it for small purchases that I was sure I could pay. Making a goal $25 each monthly my max. However, after rough times and I need to relocate I needed to use the cards more than I had imagined. To date, I have no late payments and am in good standing, yet I hadn't been able to pay much more than the minimum balances (most occasions paying $10 more than the min). This was all due to economic changes. However, I am now in the process of paying them all of off.

Was closing my First Premier card a bad decision?

Would allowing the card to remain active increase my scoring?

Would closing the card have a negative effect?

Should I reestablish this account since I am still in good standing? 

What steps can I take to get a line of credit of $5,000?

Recently, I pulled all CBR to see what collection accounts are still open. Currently, I received two -- Experian and Transunion. Equifax I am still waiting to receive. Based on the collaboration of the two reports, I have the following collections that are unresolved and one that is paid-off.

4 Medical Collections (1 of the 4 I don't recognize nor recall)

1 Cellular Company - Paid off in full, balance says $0

1 Book Club 

Three of the collections are due or estimated to be remove in a matter of months. 

Should I pay those off anyway? Can they be reestablished after they are removed? 

Would calling the agency and paying each of them off resolve the issue and increase my score from a 602 TU?

Are there any other recommendations or methods I should consider to get these resolved?

 Again, I'm trying to purchase a home and trying to correct the mistakes I've made in the past now that I am able to. Other than these items I have no loans or payments than what is listed. Is there any reasonable help to get me to a 720 by March 2010? I need help and I need to be put in the right direction.

Thanks a bunch in advance.  

[XAVIERSMAMA]

Your CC utility is killing your score.  Just getting your balances down will cause your score to improve dramatically.  It's not how large your limit is, it's how close you are to your limit that makes the difference.  I would pay them all off except for one which you pay down to a util of less than 10% make sure to pay it off everymonth after it reports a balance so it doesn't cost you any interest.  As far as the collections if they are going to fall off soon you may want to leave them alone the others you should use the HIPPA process for the medical debts and try to get a PFD for the non-medical.  This will definitely help your score, but I don't know if it will get you to 720.

[Boldilocks]

Pay off the FP and one of the others, and have the remaining card report a balance of 1-9% - that alone will help a good bit.

I'd leave the collections that are going to drop off anyway alone, DV the others (but be prepared to PIF if they come back validated).  Any that are validated, off er a PFD - don't call them, get everything in writing.

Google Whychat hipaa for info on dealing with the medical debts.

If you're hoping to buy a house within the next year, it mightn't be such a good idea to get a $5000 loan, as it will be considered new credit for a year and your report has to settle a bit before getting a mortgage.  Others will know better than me about that.

You know you don't need a 720 score to qualify for a home loan, right?

[Anonymous]

Thank you so much this is all great and useful information. I'm definitely going to take your advice and pay those CC's down to 1-9%. All of this is great!!! Really thank you so much!