NEED ADVICE

[Anonymous]

My scores currently EQ 531 TU 526 EX 513

I need to purchase a home in the next 90 days. I'm working with a Lender who can get me done with a 580 middle score. High interest rates but can refinance later. Below is my current credit profile, what can I do to improve my scores very quickly.

Credit Profile

BAD:

1. One Charged off autoloan from 2015 reporting a Balance of 19K
2. One old capitl one credit card charge off but paid in full. 6 years old
3. 9 Collection accounts total NON-JUDGEMENT just collection, old utility bills, and medical total of $15,000 
4. Collection accounts range from 1 to 3 years old. 
5. Several 30 aand 60 late pays all over two years old.
6. Total CC Utilization is  100% because I didnt time payment properly 

GOOD:

1. Secured Credit card opened in May of 2017 paid on time every month
2. Secured personal loan opened in May of 2017 paid on time every month 
3. Auto loan open September of 2017 paid on time monthly
4. I have enough cash to pay every collection in full except for one of them.

I've read of companies you can pay to be added to their accounts as an AU does this really help when it comes down to me having a short and thin file and utilization? Oldest account is 10 years old but aaoa is only 42 months.

Give me steps of what I can do to get scores up very quick. 

[Anonymous]

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@Anonymous wrote:

I've read of companies you can pay to be added to their accounts as an AU does this really help when it comes down to me having a short and thin file and utilization? Oldest account is 10 years old but aaoa is only 42 months.

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Unfortunately, aging your account with AUs will do nothing for you because account age really only matters to people with clear reports.  If you have 2 or more derogatories, account age is not a major factor, if any factor at all.

At this point, I don't think you're going to have any luck unfortunately.  Also, you're reporting your FICO scores but are those mortgage FICOs or FICO 8s?  That matters.  So please check to confirm if they're mortgage FICOs or FICO 8s.  Maybe post where you pulled the scores from.

The 30D and 60D lates over 2 years old don't hurt for much, maybe 30 or 40 points TOTAL.  Goodwill request letters would only help if ALL the lates were removed using goodwill corrections.  So that's not likely to happen in time.

The collections won't help if paid because paid collections score as much as unpaid.  If you could PFD all of them, you'd maybe get a tiny return, but if even one stuck, you'd be at zero there.

The chargeoffs are your absolute worst baddies, paid or unpaid.  I have no experience or data points on unpaid auto loans, but I assume that's hurting more than the paid credit card chargeoff.  Either way, having 2 of them means removing one won't really help.

Your biggest issue is you only have 1 credit card open.  For maximum FICO scoring during a rebuild, you want three credit cards reporting open.  The big problem is you really shouldn't apply for new credit cards while seeking a mortgage, but getting two more credit cards WOULD likely boost your scores 10-20 points total if you didn't carry a balance.

What is the balance on your ONE card as reported to the bureaus?  If it's $0, that hurts your score 10-20 points.  You always want to have ONE card report a tiny balance ($10 is fine) and all your other cards reporting $0.  If you got 2 more credit cards ($0 balance) and one of the 3 cards reported a $5 balance, it's theoretically possible to see a boost of as much as 30-40 points when everything reports.

That gets you close, but not close enough.

So the order of operations is:

1. Check to see if you have mortgage FICO scores.  If not, get mortgage FICO scores from MyFico ($30 quarterly pull or $40 monthly pull includes mortgage FICOs).
2. Ask your lender if you are allowed to app for 2 more credit cards to increase your score.  If they approve, spend some time finding which credit cards report the fastest.
3. Practice the AZEO method (see my 11 rules signature link) on 3 cards which is 2 cards report $0 balance, 1 card reports a tiny balance ($5 but under 8% of your limit on that card).
4. Send out goodwill letters to the lenders you had 30D/60D lates on.

That's all I can see doing.  I doubt you'd get to 580, but it's possible.

[Anonymous]

Just an update, just pulled another report and I only have one Charge off showing and thats the auto loan. Also those scores are my mortgage scores. I will create PFD letters tonight and I will send email to mortgage broker concerning the apps for cards.

[Anonymous]

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@Anonymous wrote:

Just an update, just pulled another report and I only have one Charge off showing and thats the auto loan. Also those scores are my mortgage scores. I will create PFD letters tonight and I will send email to mortgage broker concerning the apps for cards.

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That's somewhat helpful but getting rid of a recent chargeoff with a balance that big isn't going to be easy -- and worse, poking that bear may create a lawsuit situation and future judgment.  So be cautious there.

A profile with 1 or more chargeoffs may see a FICO drop of anywhere from 90-120 points.  Doesn't matter if you have 1 or 10, which is why you have to wipe them all out.

A profile with 1 or more collections may see a 60-90 points FICO drop.  This is not "in addition" to the chargeoffs, so having both collection and a chargeoff means 90-120 points total drop.

Not having 3 credit cards can be a 10-20 point drop.

Not carrying a balance of say $5 on one card can be a 10-20 point drop, but carrying high balances on many cards can be a 100 point drop which is why we practice AZEO during rebuilding.

The age of your oldest account matters but if you have derogatories, it doesn't matter.

Basically, if you can get rid of that chargeoff "somehow", you may see a 30-60 point increase possible, but I have no suggestions on poking that bear because of lawsuit concerns.