Need some help and advice, road to buying a home.

[djpolo]

Hello People, new to the forum here.

My current report:

0 Credit Cards

1 Auto loan which shows as installment loan on report with balance of $5700, original loan was for $6050 , Age of account is 6 Months, with no late payments.

Collection accounts: (7 on Equifax) ( 1 On Transunion ) ( 9 on Experian ) All collections are medical bills.

Current Scores ( 577 Equifax ) ( 619 Transunion ) ( 578 Experian )

My goal is to have good enough credit by October when my lease is up on my rental home, to purchase a home of my own.

In january I applied for a secured capitol one card, and was denied.

I just signed up for a First Progress $500 secured card tonight.

Questions:

I only have about 2000$ in debt, should I just pay it all off? Cash is really not an issue,  If i pay it all off, would they delete off of my credit report?

Should I pay off my auto loan? The whole point of me getting it was to help build my credit.

What kind of score bumps would I see if I paid off the car loan, and or collection accounts? And how long will it take to reflect on my report?

Should I also get another Applied Bank card for $500 or more?

My Equifax score watch shows my utilization at 1000% even though I do not have any credit cards? How can I get this down to an acceptable number?

What score would I need to meet to get approved for a home loan?

[750orbust]

"Questions:
I only have about 2000$ in debt, should I just pay it all off? Cash is really not an issue, If i pay it all off, would they delete off of my credit report?
Should I pay off my auto loan? The whole point of me getting it was to help build my credit.
What kind of score bumps would I see if I paid off the car loan, and or collection accounts? And how long will it take to reflect on my report?
Should I also get another Applied Bank card for $500 or more?
My Equifax score watch shows my utilization at 1000% even though I do not have any credit cards? How can I get this down to an acceptable number?
What score would I need to meet to get approved for a home loan?"


1. Absolutely pay off the debt as long as you aren't disputing it. Offer PFD to all the creditors first, if they refuse they refuse but you can always GW them to death afterwards. With that many collections being updated to PIf or deleted altogether will have dramatic movement on your CS's
2. Do not pay off auto loan. This is probably the best thing you've got going for you right now. It's a positive TL and it helps it providing a good mix of credit.
3. Bumps in score....pay off car loan and you're liable to see a slight drop. Don't pay it off! Pay off collections and you should see dramatic increases fast!
4. I would hold off at least six months before apping for another card. Get those collections PIf and or deleted and by then chances are your scores might be high enough to get approved for an unsecured card. KEEP DEPOSITING MONEY ONTO THE SECURED CARD YOU ALREADY HAVE iIT WILL LOWER YOUR UTILIZATION AS LONG AS YOU KEEP YOUR BALANCES BETWEEN 3-9%
5. See answer number four.
6. Depends, what kind of loan are you after? FHA, USDA, other? USDA, the loan I'm working on getting only requires a 620, but remember, higher the score lower the IR thus lower monthly payments.

Hope this helps

[djpolo]

Thanks for the advice, how will paying about $4000 of my auto loan help? that way the interest doesnt kill me on this ... that way leaving a balance for the credit report

[750orbust]

That's strictly up to you whether you can afford to just go ahead and make payments. Unfortunately interest is something that come with the territory and at a lot steeper price for those of us with poor or bad credit. Making the monthly payments on time every month (interest or not) will do way more for your scores than paying it off early. Have you considered seeing if you can possibly refinance and get a lower interest rate? Check into credit unions, they will often times offer their members really good rates, they could possibly be a good source for another CC in a few months with better IR than you're going to get from most CCC's with less than optimal scores. I love credit unions.

[guiness56]

Paying off an auto loan will not help that much.  Installment loans count very little toward your score.  If it is your only installment, paying and closing it could impact your score because it will be closed and no longer count toward mix of credit.  It will, however, continue to factor into your AAoA.

[CreditSuccessGirl2013]

Were you approved right away for First Progress? I need to get a secured credit card too but I have low scores

[djpolo]

Yes, it was instant, and added the funds right on the web page with my debit card

[djpolo]

Ok guys, I now have 6 Letters of deletion in my hands from the collection agencys, one of the smaller collections ($50) refused to delete it off my report, so that will show as paid in full after the next update. is there a faster way to get these off of my reports rather then wait the 30-60 days? how could I fax these to the credit companys to speed this up? Also, how much of a score bump do you guys think I will see from this? after this, I will only have the one collection on my credit, and it will show paid in full

[Gkanthony]

Congrats on the progress!!!!

[mashdun]

Do secured cards check credit at all? I found a secured card called "Applied Bank Secured Gold Visa Prefered" that says 'No Credit Check or Minimum Credit Score Required" and they report to all three bureaus. I'd like to get a secured card, but without the inquiry. I'll probably call them tomorrow just to make sure.