This is my second time rebuilding my credit.
The first time was in 2010, where I had to rebuilt the credit I destroyed during 2003-2009. I learned a lot of lessons during that journey, read a lot of credit score books and tons of internet posts and articles. Made some mistakes along the way, learned from them, and overall was pretty successful.
Then, enter 2016. After only a few short years of good credit bliss, divorce left my credit in tattered pieces again. I couldn't keep up with payments anymore. I took on personal loans to pay off the cards, then racked the cards right back up again and ended up in even worse shape because now I had both maxed out cards AND personal loans to pay. I was doomed, every month the debt grew deeper and the late payments stacked up, but I refused to file bancruptcy.
Thankfully, one lesson I learned from my first credit repair journey, was that it's a WHOLE LOT easier to rebuild your credit if you didn't burn ALL of your bridges. So I crunched the numbers, and selected a few accounts I would continue to stay current on, and then I stopped paying on the rest. I kept my Citi card, and my car loan. The rest (8 accounts, ~$40,000) went into charge-off & collections. Discover even got a judgment against me. (If I had known at the time that Discover routinely sues over charged-off credit cards, I'd have kept that one current too. A new lesson learned.) Somehow, though, the CRA's never caught wind of the judgment - eventually I settled with Discover anyways, and now the judgment is gone (even though it was never on my credit reports anyways, but at least now I can sleep at night knowing that it never will be).
My credit was a DISASTER from 2016 through 2018. At it's worst, my scores were in the low 400's. The only thing I had going for me is a decent income @ $85,000.
In 2018, with alimony payments finally finished, I decided to start settling my closed accounts. With the "help" of a credit repair company (which I regret using, now. A second new lesson learned), I finally settled my last accounts in January 2019. As of January 3rd, my scores were hovering around 580-600, yet somehow Kia Finance decided to give me a loan for a new car around this time, even though I already had another car loan on another car which I was also keeping. I still had collections and delinquncies on my report at the time, too, and my Citi card was maxed out. (I intentionally kept it maxed out, because I was worried that with my disastrous credit history they would slash my SL if I paid any of it off).
In February, the last of my old creditors reported the accounts as settled, and my scores began to climb once again. I already had a head start on rebuilding, with a Citi card in good standing (albeit maxed out), a 4 year old open car loan, another brand new car loan, plus a few old accounts that were closed by me and had good standing. And my apartment lease was also reporting, and in good standing.
By April (just this last month), my scores were around 650, which is where they still are currently. A couple weeks ago, I saw on their website that I had a Capitol One pre-approval for a Platinum card. The very same card I have burned Capital One on TWICE. I had one in the early 2000's, and I had another one in the early 2010's. Chargeoffs on both. I also had chargeoffs on two additional Cap1 cards over the years. What are they smoking, to decide to give me another chance after that? I only just paid off my most recent chargeoff with them in January! But I decided to jump on it before they changed their mind, and they approved me for a $2,000 Platinum card - a higher SL than they had ever given me on any other card in the past! And mind you, my Citi card is still maxed out during all of this.
Later that week, I noticed Chase listed 3 cards as being PreQualified. Yes, I also burned Chase in the 2000's AND the 2010's, and yes I also just settled my most recent chargeoff with them only 5 months ago. Whatever Cap1 was smoking, they shared some with Chase.
So I applied for the Sapphire Preferred card. They instantly approved me for $8,400, which is the highest SL I've ever had on any card in my entire life. I was waiting for the dream to end, and for me to wake up. I couldn't believe it. I decided, hey maybe lightning will strike 3 times, and applied for the Freedom Unlimited the next day. I instantly regretted it when I got the "Your application will need further review, we will contact you soon" message. Oh well, at least I got the SP card! Even though My credit was still garbage, and I only had 1 account in good standing (and it was maxed out), they still approved me for a SP at least. Figured I'd count my blessings from that, and not worry about seeking the FU again or any other new cards for a while.
But then, last week, I logged into my Chase account and saw 2 credit cards listed. Apparently they approved the FU card, after all! With a $5,400 SL!
My total SL went up by over 800% in just 1 week. I paid off some of my Citi card this week, as well. So just since last week, I went from $3,100 utilized of $3,100 available credit, to $2,000 utilized of $19,100 available credit.
Those new accounts and balances have not hit my reports yet, but I can't wait to see what happens in a few weeks. Where will my scores be at the end of May? I'll report back when I find out!
Total Loan Balance: $43k / $65k
Total SL: $78k
Great job on the rebuild and thanks for sharing your story.
Thanks!
My citi card is a leftover from the days when my credit was in the 700's a few years ago. I'm honestly shocked they didn't close it when my scores dropped to the 400's, maybe they just didn't notice because all they cared was that I was still at least paying them on time.
I tried applying for a Citi DoubleCash card a couple weeks ago, and got no love. BofA and Amex also still don't want my business, even though I've never burned either of them. It's probably because of all my negative items still on my report. Believe it or not, even with scores in the 650-ish range, I've got all 8 negative accounts still listed on my report, all of them listed as "previously charged off, settled for less than the balance". One of the next steps in this process is to start writing Good Will letters to them and hopefully get some of them removed.
Just finished drafting 7 goodwill letters for my 8 derogatory accounts (all of them "charge-off settled for less"). One of them covers 2 accounts from the same creditor.
Just need to find the addresses to send them to, locate my old account numbers, and drop them in the mail and cross my fingers!
Unfortunately I don't expect it to make a huge difference to my score at this point, unless I successfully get all 8 accounts removed. But I guess we'll see! Couldn't hurt to try!
Oddly, I just realized that I have ZERO collections on any of my credit reports. I say "oddly" because 6 months ago there were LOTS of them. I paid them all earlier this year, but I (stupidly) never asked any of them to delete their collection accounts from my credit reports.
It seems that they all voluntarily deleted them, anyways. Strange! But I'll take it 
Thanks, and great tips, I agree with all of them! I'm not quite able to do AZEO yet, as I still have about a $3000 balance to deal with, but in the meantime I've spread it out among the 4 cards to bring utilization down to 15% on each one. Once I get the total balance down to about $1500, I'll move it all over to my largest card to achieve AZEO.
I've also just set all my credit cards to autopay the minimum payment in case for some reason I forget to make a payment before a due date (even though I've never in my life "forgotten" to make a payment. In the past, it was always intentionally not paid, due to lack of funds). I've also set up all my other monthly bills to be autopaid from my credit cards (at least 1 bill on each credit card) so that nothing ever ends up with late fees or colections again, and also to show monthly activity on each card.
Definitely not planning to apply for any new credit until at least 1/1/2020, except possibly a refinance on my terrible 10% car loan. I'm hoping to refi with Alliant, where I already have another car loan at 4.74% (but of course, I'll pick whatever bank gives me the best terms)
@DIYcredit wrote:Spreading out cc balances does not improve a Fico score because cc utilization is calculated in total amount and the credit limits on closed accounts are not in the calculation.Actually when you have too many cc's with balances it decreases your credit score somewhat..But that is only important when you about to apply for a new credit account and then you can use the azeo method.You should show activity on all of your credit accounts.
That makes sense.
It looks like I'll need to wait until July before I see how all this affects my scores anyways, because I ran up my Cap1 to near max in the last week on a business trip and I don't think I'll get reimbursed for it before the statement cuts. So my scores might actually go down in June, rather than up.
In the meantime, I'll take your advice and shift the balances all over to the highest limit card, which would put it at about 50% utilization for now (25% after I get reimbursed for this trip).