Hi and welcome to the forums!
Chargeoffs first. The 100%+ util is killing you. The sooner you get those balances reporting as $0, the better for your scores. Pay in Full or Settle - whichever you can handle financially. Paid in Full just looks better than "Settled for Less", but both will have the same result scorewise.
Then, the collections. For the medical collection, contact the original medical facility and see if you can pay them directly and ask that they recall the debt from the collection agency so the collection could then be removed. If they will not accept payment directly, then reach out to the collection agency and request a Pay for Delete (PFD) - offer payment in full in exchange of deletion. *If you had insurance during that time that should have covered the costs, you can also ask the medical facility rebill the insurance co. for payment.
Pay Sprint & Verizon - either in full or settlement amount. You can offer a PFD as well - if I recall posts from others correctly, they both can a bit difficult to deal with when it comes to PFD requests - but try it. You can also do a search in the forums for "Sprint / Verizon PFD" to see how others have fared.
Not too much you can do about the lates on your student loans. Are they Federal loans? If so, a Goodwill request won't work. If they're private loans you can try sending a Goodwill letter.
And try Goodwilling the auto loan lates also. You're very close to paying it off so may have some luck there. You can search the forums for example goodwill letters, but basically you write a letter explaining whatever hardship (medical, job loss, or perhaps, lack of credit experience/knowledge) that led to your default and ask that they give you a fresh start by removing the delinquencies as an act of goodwill. You'll either receive a yes or no response- the advice we give is not to give up because it can work - you just need to be determined. Read this post on the Goodwill Saturation Technique: https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/The-Saturation-Technique-Best-GW-adjustment-...
Once you payoff those chargeoffs and collections, then you'll likely be more successful when apping for a credit card with a major lender. In the meantime, just to get a postive revolving account - for which you are the primary account holder - reporting, you can open a secured card with Open Sky - no credit check, non-predatory, reports to all three bureaus. https://www.openskycc.com/Home?utm_source=GoogleAds%20&utm_medium=cpc&NID=1864&SID=google_1-3
Along with all of that, read these forums and learn all you can about credit and FICO scoring and put what you learn into practice. And have patience - you're going to need it.
EDIT: I forgot you mentioned you recently opened Fingerhut and Self Lender - good. No reason to open another card via Open Sky as I suggested. Let those accounts age and report positively while you work on your derogatories. After a minimum 6 months of positive history - and clearing your outstanding debts, you can look into acquiring new credit.
@Anonymous wrote:Hi guys, I am fairly new to the community. I have seriously let my credit go over the last few years due to many curveballs that life threw at me. Thankfully, I am in a better situation today, but I am looking to rebuild my credit after being denied multiple times, even for secured cards.
Experian: 565
EQ: 572
TU: 579
Negative items
Charge offs:
Charge off for synchrony bank: 1700.00 balance, however, I made a settlement with them a few weeks ago for 800. I am doing this in monthly payments, but my utilization shows at 111% on my fico report. Will paying the settlement in full right now help my score? Or do I just give it more time
Charge off for Merrick bank: 1081.00, I’ve made a settlement with them as well that I am making monthly payments on, utilization reports at 139%.
Charge off for Amex: 769.00, utilization reports as 79%. I haven’t called them yet, but I intend to call this week.
Verizon charge off: 700.00 no utilization;
Collections:
One medical bill: $760.00; 12/2018
Sprint: $1487 6/14/2019
Active accounts
Citibank Authorized user: My mom’s card, that I use daily. CL is 2000.00 balance owed is 1200.00.
Home Depot authorized user: CL is 500.00 balance owed is 287.00
New accounts opened recently;
Fingerhut- 300 limit: haven’t used yet
Self lender: installment loan reporting
Self lender also just offered a credit card with a limit of 125.00
Late Payments
Honda Financial -10 30 day late payments last one in October 2019; I will finish payments in 8 months.
Student Loans-12 30 day late payments last one reported in October 2019.
I don’t know what to attack first or where to start that will make the most impact. I recently applied for discover, capital one secured card and I was denied even for their secured card. I used to have a Capital one a few years ago and I paid that collection off about 2 years ago, so I thought I would at least be able to get a secured card.
Please help! I am so lost!
Paying off Synchrony and Merrick will improve your score by no longer reporting over the limit. Paying them off will also stop the reporting allowing the negative to age, slowly allowing your scores to improve.
Paying Amex will get score bumps as you cross thresholds (68.9%, 48.9%, 28.9% and for some profiles 8.9%).
Your collections are hurting a lot as well. Some collection agencies will delete once paid (listing the collection agency may get you suggestions on how to best deal with that specific company).
There are ways to remove medical debt from your credit reports, some of those methods can't be discussed on this forum.
Though not likely to get any traction, you can try a Goodwill campaign with your student loans provider and Honda to see if they will remove the lates.
If possible, get Citi reporting under $578 (28.9% or less of limit)
Get home depot under $144 for same reason.
STOP applying for credit for a minimum of 6 months. You shouldn't waste the HP's while your scores are under 620 (in my opinion).
Once you've cleared up the negatives, paid your charge off's and collections; and allowed at minimum 6 months since your last application for credit (or last HP), check the Discover prequal site for possible credit card offer.
When you negotiate repaying Amex you *might* be able to negotiate the reopening of the account or an invitation to apply for their Optima card.
Until you make a little more headway at cleaning up your reports you will continue to receive denials from most bank's. Those inquiries could haunt you later if you continue to apply for more credit before your reports are ready.
Best of luck going forward!
@Anonymous wrote:
I'm not sure I understand about the threshold numbers you mentioned for the Amex?? What does that mean?
That's a reference to revolving credit utilization. FICO scores respond to util according to percentage thresholds: 89%, 69%, 49%, 29%, and 9%. These thresholds apply to both individual (balance / respective credit limit) and aggregate (total balances / total credit limit) utilization.
You will gain / lose points as your util crosses below / above a threshold. It is recommended to keep aggragate util below 9% with individual below 29% for optimal scoring. Anything 49%+ is considered too high.
I dont know how much control you have over balances as an AU... I wouldn't worry about that too much right now - as long as payment history on those accounts remains good- but in the future once you've cleared things up and are ready to pursue new credit, if the utilization isn't under control, you may want to consider removing yourself as an AU so your scores don't suffer.
@Anonymous wrote:Thank you @chiefone4u ! I was wondering about the Citicard and Home Depot! I will get those down as well.
I'm not sure I understand about the threshold numbers you mentioned for the Amex?? What does that mean?
I will not apply for credit for 6 months after paying the charge offs! That makes a lot of sense because I'm getting denied anyway. Concentration on the negative items is my best bet. Hopefully after paying I can get those Collections deleted!! Fingers crossed!!
Thanks again!!!
You are very welcome @Anonymous
I see @thornback already answered your question.
The reason I mentioned those thresholds was because Amex is playing nice for now and not reporting over the limit. If I remember correctly each card crossing a threshold (set percentage of limit-- 88.9%, 68.9%, 48.9%, 28.9% and 8.9%) you'll gain about 5-10 points as your balance goes below the threshold. Likewise, you will lose those 5-10 points for each threshold you cross when your reported balance increases above each threshold.
You are likely to also see score changes for your overall utilization (aggregate utilization) for each of the above mentioned thresholds of 15-20 points.
While not guaranteed (to many variables) I wouldn't be surprised if you see a score bump of around 85 points once your three charge off's report paid.
@Anonymous wrote:
4/28 Approved for card with NFCU; SL 1k
haha.. so much for 'I will not apply for credit for 6 months' (it's OK, totally understandable).... congrats on your new Navy card -- excellent app choice & that $1K will grow in no time (though you may have received a higher starting limit had you waited for those charge-offs to report as paid first -- patience, you gotta learn it if you want this thing to work).
@Anonymous wrote:
So I have paid off all charge offs that were reporting utilization
4/27 paid Synchrony CO
4/28 paid Merrick Bank CO
4/29 paid Amex CO in full
Fantastic! Once they report as paid you will hopefully see a bit of a score boost due to reduced utilization (this varies from profile to profile so hard to know for sure) - even if not, it's still a great move on your part - now your scores will be able to begin recovering from these derogatories.
@Anonymous wrote:
I have a total of 6 new inquiris in the last 3 months (I was previously denied for Discover and Capital One)
My current credit line-up is as follows;
Citibank -AU $1442 / $2000
Home depot-AU $116 / $500
Fingerhut- $24/ $300
Self lender CC $0/ $125
Self Lender Installment Loan: 8 months left
NFCU: 0/$1000
Car Loan: 85% paid, final payment will be in 12/2020
Student Loans with Navient and Mohela
At this point, should I garden for 6 months or should I go for a CLI on the NFCU or apply for 2nd card? If not, when would be the best time to apply for 2nd card with NFCU?
You need to garden for at least 6 months. A year wouldbe preferable but you can see where your scores are in 6 months and decide if it's time to apply. You can do a CLI at 91/3 (91 days and 3 statements from account opening) with NFCU -- they've been doing Soft Puill CLIs lately, so as long as that continues there's no harm in seeking an increase. As for a second card -- that really should be decided based on where your credit is at 6 months. Remember -- you'll get a 15-20 point score boost when your youngest account ages over a year... so if you're looking for best approval odds, it may be worth waiting a full year. Too many new accounts and inquiries will also hold down your scores and prevent you from seeing the progress you'd get otherwise - too many new accounts can also hinder the limit growth of your existing cards, so keep that in mind. A big part of (re)building credit is time... just watching the paint dry. You've got a decent lineup of accounts right now... it would be of benefit to let them age.
@Anonymous wrote:
Also, if Amex offers me the Optima, should I go for that and then garden? I am not sure if this would be a HP or SP. (Ive been reading so much in the forums about it).
Yes - I'd actually say this is one thing worth stepping out of the garden for -- but if you get it, you MUST reenter the garden immediately and stay there till everything is a year+. But the Optima is your way back in with Amex.
@Anonymous wrote:
I do plan on working on the collections at the end of this month as well. I have paid alot on the charge offs but I want to start on the collections as soon as possible.
What would be my best next steps?
The medical collections would probably be easiest to deal with and get removed. So I'd work on those first (see my earlier postof how to handle). Then tackle Verizon & Sprint.