Rebuilding Advice

aimeelynne756 · ‎10-23-2024

I am trying to rebuild my credit as much as possible during the next 6 months.

i don't have a lot of debt but I have a few collections, 3 credit cards that are in good standing but my ultization is a little high, and I had a remaining car loan balance of about $2,100 that was just charged off because I didn't pay the remaining balance after it was totaled.

My score is between 560 - 580 between the 3 credit bureaus.

my question is what should be my first step.

improving my credit card utilization?, paying off my car loan charge off, or paying my collections.

I'm about to get a $20k bonus and I want to use some of it to clean up some of this mess. I plan using about half of it to pay for a used car in cash and the rest towards my debt.
any advice would be appreciated. Thank you for your help.

Creditwiser · ‎10-23-2024

@aimeelynne756 wrote:
I am trying to rebuild my credit as much as possible during the next 6 months.

i don't have a lot of debt but I have a few collections, 3 credit cards that are in good standing but my ultization is a little high, and I had a remaining car loan balance of about $2,100 that was just charged off because I didn't pay the remaining balance after it was totaled.

My score is between 560 - 580 between the 3 credit bureaus.
my question is what should be my first step.

improving my credit card utilization?, paying off my car loan charge off, or paying my collections.

I'm about to get a $20k bonus and I want to use some of it to clean up some of this mess. I plan using about half of it to pay for a used car in cash and the rest towards my debt.
any advice would be appreciated. Thank you for your help.

A charge off will sting for some time to come. Paying it will help ease it a bit but its still going to affect your scores. High Utl will also depress your scores and you'll see a score bump from paying it down. Is the Charge Off your only collection ? You said you have a few. I would attempt Pay for Delete.

Providing some data on CC balances & limits will help determine what to do next.

JoeRockhead · ‎10-24-2024

@aimeelynne756 wrote:
I am trying to rebuild my credit as much as possible during the next 6 months.

i don't have a lot of debt but I have a few collections, 3 credit cards that are in good standing but my ultization is a little high, and I had a remaining car loan balance of about $2,100 that was just charged off because I didn't pay the remaining balance after it was totaled.

My score is between 560 - 580 between the 3 credit bureaus.
my question is what should be my first step.

improving my credit card utilization?, paying off my car loan charge off, or paying my collections.

I'm about to get a $20k bonus and I want to use some of it to clean up some of this mess. I plan using about half of it to pay for a used car in cash and the rest towards my debt.
any advice would be appreciated. Thank you for your help.

The ideal thing would be to get it all settled. If you can't take care of all three at once, it would be best for you financially to address the current credit card utilization, especially if you're paying interest (which is likely sky high) on that debt. Once it's paid down, keep it down by only allowing a small balance (under 9% of CL) report on one revolving credit card. Don't use the cards for anything that you can't afford to PIF every month, pretend they're debit cards. Next would be to get your collections paid. Hopefully they're with agencies that offer PFD (pay/settle for delete). Then take care of that Charge Off.

Even if the collections and charge off remains on your reports, it looks better to future lenders that you positively addressed the problems.