What to do next in rebuild process?

[tedb]

I’m a long time lurker here and I’m looking for a bit of advice. I had been laid off from two jobs and had an emergency health scare in the past 3 years that put me behind on all my bills. Fall of 2016 I found a new job after recovering from health issues and started to get my life back to normal. I pulled my credit report in late 2016 and it was in the low/mid 500s. 536, 541, 537. The low scores are pretty much from defaulting on every credit card and loan that I had during that time. So in 2017 I vowed to pay down my debt and as of this moment I’m just about debt free except for my mortgage. I’ve paid off my car, all credit cards, and will be sending off my last payment in a month or two for a personal bank loan I had taken out and fallen behind on during those dark days of unemployment and illness. I’m currently sitting at 641 EX, 626 TU, and 637 EQ. With that being said what’s next to raise my score? I got two credit cards to start the rebuild process. The Capital One unsecured and a Discover secured. Both balances are low and I only use them both for Netflix and Amazon Prime subscriptions. I pay in full each month and carry no balances on them. My current report shows a 2% credit utilization. I’m thinking the next step is to write some GW letters to get the bad stuff off my report. I’ll probably go for another card but I really wanted to be in the 700 range before going for another one. Any advice would be appreciated.

[capricornchanges]

I would definitely GW my butt off, that and time my friend. Don’t app unless you really need to as the inquires will cause another drop.

[Gidgetmom]

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@capricornchangeswrote:
I would definitely GW my butt off, that and time my friend. Don’t app unless you really need to as the inquires will cause another drop.

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+1 Congrats on the rebuild.  Your making strides!

[Anonymous]

Congrats to getting out of the hole.

Very hard work you have done, and you should be proud of what you accomplished!

Yes you should just sit tight with your cards and just work on getting the bads removed

as that will be the best for improving your score, you already have done the rest.

Congrats again and good luck!

[Anonymous]

Congrats on getting everything back on track! I am so glad your health and finances are coming back together!

The only other recommendations I can see would be to let you know that:

1) There is actually a score bump for having 3 cards.  Adding another one now with these other two may actually help you get to a better card once you do hit higher scores.

2) There is also a score bump for a mix of credit. Currently you have a loan and cards, but you are about to pay off the loan.  Paying off the loan may actually show you a drop in scores because you will lose the bump for the mix.  Options to help prevent the drop without getting into further debt are to use Self Lender or another type of secured loan. (Unless you have other loans reporting.)

[tedb]

Thank you all for the replies and the congratulatory posts. It's been a long road and I'm still walking the path. Just trying to get back right.

I was thinking that the GW letters would be the next step. I've been looking at a couple of posts on these boards on how to start this process. I'll write up some letters this week and send them out on Monday. Wish me luck! 

[Anonymous]

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@Anonymouswrote:

Congrats on getting everything back on track! I am so glad your health and finances are coming back together!

The only other recommendations I can see would be to let you know that:

1) There is actually a score bump for having 3 cards.  Adding another one now with these other two may actually help you get to a better card once you do hit higher scores.

2) There is also a score bump for a mix of credit. Currently you have a loan and cards, but you are about to pay off the loan.  Paying off the loan may actually show you a drop in scores because you will lose the bump for the mix.  Options to help prevent the drop without getting into further debt are to use Self Lender or another type of secured loan. (Unless you have other loans reporting.)

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^ this is good advice

and if you haven't done so already, build an emergency fund of 3-6 months worth of expenses. this will protect the hard work you put into your rebuild should employment curveballs be thrown your way

Nice work!

[tedb]

I can probably stretch out the loan a couple of months. I was just going to lump pay it off or split it into two lumps to pay off. I can continue to pay normally a little longer. I just wanted all old debt gone.