New and have some questions on where to start.

[giosan32]

Hello everyone,

    I am new to this and have some questions and hope to get some help so I can get my credit/life back on track.  First my TU score is 565, Equ score 580, Exp score 545.

I have 3 medical bills in collection for pretty small amounts, and about a dozen late pays of 30 and 60 late on my credit cards which have been current for the last 4 months.  3 Capital One cards 1250 limit with balance of 1235, 2nd Cap one card 750 limit with balance of 735 and 3rd Cap One card w 400 credit limit and a balance of 366.  I am coming into $2000 dollars end of November what should I be doing to get my scores up.  My goal is to have my middle score over 620 so I can get a VA loan to buy a house next spring, thanks in advance.

[Anonymous]

Hi and welcome to the forums.

I would start by pulling all 3 reports from annualcreditreport.com.  You get one free from each CRA every 12 months.

Those appear to be pretty new lates.  Single 30 day and 60 day lates are minor derogatories and only impact your score for around 2 years.  You can try sending the OC good will letters and asking if they would remove them.

Your utilization is killing your score.  With what you provided, each card is maxed out.  In order 99%, 98% and 92%.  Your overall is 97%.  Each card is scored individually and if maxed out FICO dings you for that.  Then you are dinged for high utilization.  You need to bring that down significantly.  You will see a bump in score.

With the $2000 I would pay off the 2 lower balance cards. That will leave around 900 to put on the balance of $1235.  Doing this your utilization would drop from 97% to 14%.  Still a bit high for optimum scoring but much better.

It is suggested to leave all but one card at a 0 balance and the last one at 9% or below.  The 9% is the balance that needs to be reported to the CRAs.  You would need to pay the cards down around the statement date.  Then pay off the balance before the due date to avoid interest charges.

As for the collections, paying one will not improve your score.  They would need to be removed.

If you know they are yours and don't question the accuracy, ask them for a PFD.

[giosan32]

Any idea what kind of score increase I could see by paying down those card to 0 and the 1 remaining to 14%?   Thanks so much for answering me so quickly.

[Anonymous]

Your score is based on your entire credit profile.  No one knows exactly how a FICO score is derived, other than the things they look at.

With that said, I always estimate a 5 - 10 point increase for every 10% that is paid down.  In your case that would be somewhere between 40 to 80 points. YMMV.

I have seen some gain triple numbers.

[giosan32]

Thanks for the advice and I will give everyone an update on where my scores are after I pay the balances down.