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My Credit Rebuild Plan

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Anonymous
Not applicable

My Credit Rebuild Plan

Hello everyone...I once had a mid 600 credit score then I got a divorce now I’ll sitting in the 530’s across the board. Since then I’ve remarried and I’m planning to buy a house but my lender is saying I need a minimum 580 for the VA loan. So I’ve put this plan into action.

1.Opened Self Lender account  for an Installment Loan

2. I’ve opened a NFCU, Cap 1, and Open Sky secured cards 

3. I’ve open a Fingerhut Fresh Start account.

 

I plan to use each card to buy a pack of gum every month for the next 12 months and keep my utilization under 10%. So I hope I have a nice mix of credit and hoping the positive payments that I intend to make will outweigh all of the charge offs that I have. 

 

Am I going in the right direction?

Message 1 of 11
10 REPLIES 10
FireMedic1
Community Leader
Mega Contributor

Re: My Credit Rebuild Plan

Welcome @Anonymous 

Yes in a way. It will help your scores. Just hope the lender ignores all the new accounts. They usually like no new accounts for 6-12 months before applying for a mortgage. Either way. Congrats. Hope all past baddies are paid too.


TWO MORE MONTHS NO BK! (on Eq/Ex)
Message 2 of 11
thornback
Senior Contributor

Re: My Credit Rebuild Plan

You're on the right track as far as reestablishing a positive credit history -  but what about your existing history?  Any negative/derogatory accounts, late pays, etc.?

 

Welcome to the forums!

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 3 of 11
AllZero
Mega Contributor

Re: My Credit Rebuild Plan

I'll echo the above. You might want to address any derogatory you have; delinquency, charge off, collection, etc. If they are updating monthly, it'll keep your scores suppressed.

Message 4 of 11
Anonymous
Not applicable

Re: My Credit Rebuild Plan

I have about 7 or 8 charge offs from 2 years ago and 2 collection accounts. One of the collections should be deleted in the next 30 days.

Message 5 of 11
thornback
Senior Contributor

Re: My Credit Rebuild Plan


@Anonymous wrote:

I have about 7 or 8 charge offs from 2 years ago and 2 collection accounts. One of the collections should be deleted in the next 30 days.


Are the chargeoffs paid?

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 6 of 11
Anonymous
Not applicable

Re: My Credit Rebuild Plan


@thornback wrote:

@Anonymous wrote:

I have about 7 or 8 charge offs from 2 years ago and 2 collection accounts. One of the collections should be deleted in the next 30 days.


Are the chargeoffs paid?


No none of them are paid. My lender said they would be ok because they are older than 2 years. Was my lender lying or what?

Message 7 of 11
thornback
Senior Contributor

Re: My Credit Rebuild Plan


@Anonymous wrote:

@thornback wrote:

@Anonymous wrote:

I have about 7 or 8 charge offs from 2 years ago and 2 collection accounts. One of the collections should be deleted in the next 30 days.


Are the chargeoffs paid?


No none of them are paid. My lender said they would be ok because they are older than 2 years. Was my lender lying or what?


Well, most mtg lenders require outstanding debts be paid. 

 

Your scores will have a very difficult time recovering with chargeoffs that have balances. Creditors may continue to update the accounts with new negative chargeoff notations (either monthly or sporadically) which will keep the derogatory from aging and your scores suppressed.  

 

You're also leaving yourself open to possible lawsuits and/or further collection attempts by a collection agency resulting in a new collection account being added to your reports in addition to the original chargeoff. 

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 8 of 11
thornback
Senior Contributor

Re: My Credit Rebuild Plan

Let me also add -  the outstanding balances are factoring into your overall util and unpaid chargeoffs are treated as maxed out.   Paying them (either in full or settled) would be hugely beneficial for all these reasons. 

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 9 of 11
Anonymous
Not applicable

Re: My Credit Rebuild Plan


@thornback wrote:

@Anonymous wrote:

@thornback wrote:

@Anonymous wrote:

I have about 7 or 8 charge offs from 2 years ago and 2 collection accounts. One of the collections should be deleted in the next 30 days.


Are the chargeoffs paid?


No none of them are paid. My lender said they would be ok because they are older than 2 years. Was my lender lying or what?


Well, most mtg lenders require outstanding debts be paid. 

 

Your scores will have a very difficult time recovering with chargeoffs that have balances. Creditors may continue to update the accounts with new negative chargeoff notations (either monthly or sporadically) which will keep the derogatory from aging and your scores suppressed.  

 

You're also leaving yourself open to possible lawsuits and/or further collection attempts by a collection agency resulting in a new collection account being added to your reports in addition to the original chargeoff. 


So should I contact the original creditors to PIF or settle even though the accounts are charged off?

Message 10 of 11
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