Rebuilding for 2026

[Wcgolf01]

New to all of this but looking for help when it comes to rebuilding my credit!  It has been a long time coming but now is the time to fix what I created and make sure it doesnt happen again.  Transunion is 634, Equifax is 659, Experian is 616. 

I am looking at Credit Karma for information and this is what I am seeing.  

Credit Card Usage  0% usage

Payment History is 93% 

          GM Financial 5 missed payments on an account that was closed on Feb 9, 2024 when I traded in the vehichle and it was current.  1                                            payment listed as 60-89 days late.

          Ford 2 missed payments in December 24 and January 25.  Now current. December payment was listed as 30-59 days late

          Ashley Furniture life got in the way and we missed 5 payments and then my wife settled for a lower amount without asking for a removal                            upon payment and that account has been closed since March 20, 2024. This was in collections and a charge off.  Worst was 120                                days late

          Belk/Syncrony Bank  2 missed payments closed for full amount on April 2, 2024. 2 60-89 day late payments.

          All In Credit Union  More than 5 missed with this going to collections and a charge off that was paid in full on December 11, 2024.  This                                   was  a big one with multiple 120 late payments.  Travel Trailer that was destroyed in Hurricane Sally.

Derogatory Marks

          1 Listed for Jefferson Capital Systems for $35 in collections and I paid it in full last night.

Credit Age 

          19 years 1 month

Total Accounts 

           15

Hard Inquiries

           15  I have been looking for a new truck loan so those are higher over the last two months.

So the question I have is where do I go from here?  I am going to send Goodwill letters to GM and Belk and the Credit Union, but I doubt these will help any based on history, but I have to try correct?  I need advise I want to get this thing above 700 as quickly as possible.  Lead me people who are smarter with this stuff than me!

[CreditBob]

I am going to share my experience with you as 12 months ago, my chapter 7 bankruptcy was discharged, so that it helps you out. I am finding out that creditors are telling their customers to do a direct online dispute with the credit bureaus. If the late payments are in error, then you need to upload proof, such as an account statement that shows the payment was made. If any trade lines that you are disputing, come back as verified, & accurate by the lender, then the information will stay.

On your 0% credit card utilization, the optimal balance should be 1%. Take all of your credit limits with all credit cards, add them together & times that by .01 percent. If you have three credit cards and the total combined limit is $ 5k ($ 5,000 X .01 = $ 50 dollars. And of all accounts combined together, loans & credit cards, less than 4 accounts with balances. 

• Rate Shopping Window: FICO treats multiple auto loan inquiries as one if they occur within a specific timely (14 days for older models, 45 days for newer ones).

If you have other hard inquiries for other loans & credit cards, or have opened any new accounts within the last 12 months, if you can wait for those to age past 12 months.

You need to also achieve the credit mix. Along with a credit card, you also need to have an active & open installment loan. If you do not qualify for a personal loan at your credit union, you can get a credit builder loan, for example, through Credit Strong website, which I have found very useful. And when you open it, get in a few months of payment history, pay down loan 95%, but do not close it & pay it off until you get your truck loan. 

You are going to have to do a lot of work on your credit. From what you are posting, the creditors see you as a high risk. Time is your friend. Also, your interest rate would be very high. And your DTI, debt to income ratio  has to also be able to support your payments. Take all your credit monthly obligations & divide that by your gross income. Make sure your current income will support a DTI no higher than 35-40%, which includes the possible new truck payment & all your other credit monthly amounts.

Use the FICO score simulator tool as well.

[BrutalBodyShots]

Hey there @Wcgolf01. You've got a very dirty credit file. The best way to "rebuild" credit is to address the negative information on your reports, not to open new accounts. Opening new accounts is the equivalent of putting a new set of tires and wiper blades on a broken down car that can't run. Sure, it may look at little better, but it's not going to help you sell the car any easier. I would suggest looking up DYI credit repair techniques. Goodwill letters (Goodwill Saturation Technique) is a great approach for late payments. For your collection(s), negotiate a PFD (Pay for Delete). Some CAs like Jefferson Capital that you mentioned will automatically delete the account from your reports once paid, even if you settle for less. Charge offs are notoriously difficult to get removed, so typically the best you can do is pay them and allow them to age which it seems you've already done. Nice job!

I disagree with what most of @CreditBob says because their focus seems to be more on opening accounts rather than cleaning up your dirty file. Things like optimizing utilization aren't necessary / is like washing the windows on that broken down car. They also say you "need" an installment loan for credit mix. That's not true. Diversity of credit mix is satisfied by the presence of a loan anywhere on your reports. It doesn't have to be open. Even if you've never had a loan, loans are a terrible way to "build" credit in the first place. They aren't open ended accounts and they cost money. No one needs to pay a penny to build credit. When the time comes for a "real" loan (that you need) you'll be able to obtain one just fine with a clean credit file that's absent of an open loan. 

[Echelonstyle]

@BrutalBodyShots This is such great advice. Thank you so much!!!

[SusanJA]

You need at least one credit card that's in good standing reporting positive information to the bureaus each month. That's the most dependable way to build back from a spotty track record. If you don't have one already, apply for a secured credit card. 

[Wcgolf01]

Thanks for your reply!

The Jefferson Cap collection is now gone and I had a nice little jump to 648, (T)656, (E)678 on reports.  

As far as next steps I will be sending out goodwill letters this week.  Who knows if they will work but its worth a shot.  If i know I had the late payments is it worth sending dispute letters?  I guess I dont understand why I woudl send them if I had them?  

I am a secondary on two American Express cards (one for business and one personal)  I guess my dad kept me on the personal all these years just in case.  And the other is our business which both are paid on time every single month.  Do these have any affect on my credit?  Other than those two I do not have a credit card of any kind and dont really care to unless I absolutely have to.

As debt ratio I am a 6 figure salary with only two car loans and no house payment so that should not be an issue with ratio.  $1500 a month for two newer cars is pretty darn good in my opinion in this day and age for both 2023 vehicles.

I guess I am asking what are my other options or next steps?