So, where to start..
I was unemployed for nearly a year in 2003 and had 4 CC accounts closed. When finally re-employed in a different field, I took a $30K per year pay cut. The next several years were rough. In 2008, we had our car allowance cut in half, and living paycheck to paycheck, I had to let it go back in order to keep everything else going at home. So, long story short, crap credit. I need a new car for my wife and my credit won't allow it at a decent rate that I can afford, not to mention a normal payment would kill the budget. I do have about $80K in my house equity though so I thought a cash out refi would be the way to get this done.
Last year I took the advice of a local mortagage broker in order to begin the process of refinancing my house with a VA loan. Bad news, I needed at least a 640. At that time, my credit score was around 500 (once a 460). I had a bunch of late house payments from 2007, charged off credit cards from 2004 and a repo'd car from 2008. All of these duplicated with the collection agents chiming in. So I borrowed $6K at high interest from Springleaf (now at a $10K balance) and began settling/paying off the collectors. I was able to get rid of about $10K in collections and everything was finally a zero balance except for some medical stuff. The car repo ate up most of the $6K. Then he told me to get a secured CC from USAA or BOA. Well BOA said no of course (another inquiry to boot), but USAA did it for $300. So after 10 months of nothing happening, things are looking up finally. Here we are 10 months later and I am up to 635, 637,638. (EXP,EQF,TU). I still have about $4K in medical collections showing up from a surgery that insurance paid little of in 2009. I would like to pay them off if I could get the VA refinance done, but there is no way to do it without the refinance, I just don't have enough spare $ at the end of the month.
So I seem to be stuck at 637. I haven't made a late payment to anyone in nearly 5 years, but I wonder how much impact these medical collections are having. The old late house payments will continue to come off over the next year until they are all gone finally. The car repo will come off in Feb 2015. In the meantime, I really need to get this VA loan. I have been reading about NFCU being very lenient with their granting of credit cards so I just joined them. Experian tells me that I could increase my score another 15 points or so if I had a CC with more than $1500 limit. So I have 2 questions.
My USAA card balance is $150 which is 50%. I can pay this off this month and have a $0 balance. Will having a $0 balance help me to get a higher limit with NFCU? If so, I will not apply for their card until I get to the zero balance. i am worried that if I apply right now, the 50% balance with USAA will screw me.
If they were to give me a card with $1500 limit, how long do you think it would take my score to go up?
OR is all of this futile with the VA folks until the repo comes off in Feb?
I'm just looking for some good advice and from what i have seen in these forums, there is a wealth of knowledge here that good folks like to share.
