Looking to build a credit-worthy future. Any advice? :) Thank you!!

[Desmoire]

Hello everyone. Here is my story:

I am 26 and my credit history is short. I only have 2 years since I opened my first cc. Since then, I have opened 1 more cc, 2 store cards, and a line of credit through my bank. Across all cards, my total available credit is 4500$. I was foolish and maxed out almost all my credit, and also had 2 lost hospital bills that went to collections. Back in August, I paid the collections account in full (530$) and also got some family help to consolidate my debt interest free. My Fico score went from 590 to 622 just from one of my cards showing 0 balance (the rest of the cards are still still showing max) and I am assuming by the time the other accounts show 0$ balance at the end of the month, my score should jump above 650?

I have no auto or mortgage loans and never have. I have never had a late payment on my CCs.

My Goal: To become credit worthy within the next 6 months - 1 year so that I may get an auto loan with a decent interest rate. Also in 2 years after I get married, I wanna be able to purchase a house.

Is 6 months too soon to repair the damage I have caused? What steps should I take my quickly repair my score? Should I open more cc's is 4 not enough?

Thanks so much for the help!!!

[guiness56]

Hi and welcome to the forums.

From what I see the only long term negative you have affecting your score are the collections accounts.  Paid or not they are scored the same by FICO, as a collections.  Since they are paid, start sending goodwill letters to the CA asking if they will remove them.

You also have a short credit history and nothing but time will help you there.

As for your CC, utilization is one of the biggest factors in your score.  Getting that down will significantly help your score.

Are the maxed out cards paid and just not reflecting on your CR?  If that is the case, yes, your score will go up.  Keep in mind not to let all of them report a 0 balance.  FICO doesn't like to see that.  They also do not like to see too many balances.  Each card is scored individually first, and if they are maxed out, you are dinged for that.  Then the overall utilization is scored.  High utilization will really hurt you.   Let all but one card report a 0 balance and the other at 9% or below.  Then pay it off before the due date to avoid interest charges.

Utilization has no memory so as soon as those cards are paid down your score will go up.

The only thing another CC would do is extend your overall CL.  It could help if you carry high balances all of the time.  But you will also lose AAoA and points for the inquiry.  IMO, you have enough for now.  Just garden for the next 6 months to a year, make on time payments and don't let your balances get high.  Your score will react accordingly.

[Desmoire]

Guiness56 - Thank you so much for your reply. It was incredibly helpful. I find this forum community to be very nice. I look forward to posting back in 6 months with a success story!