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advice/suggestions?

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advice/suggestions?

Hi! I'm fairly young and am trying to rebuild my credit.  I have 1 collection from a cap one recieved on my 18th birthday maxed out the $300 limit and now I owe like 480? (PRA- recently updated policy to delete within 30 days of paid/settled) which lead to bad credit. I currently have a few positives on my account- car loan with 11k balance, been making more than the payment it is 9 months old, Discover It Secured with a $200 limit that is 5 months old, Kohls $300 because I shop there often enough for my kids it is worth it, as well as Old Navy $250 both these store cards are 2 months. I carry usually a $15 total balance each month so my utilization is at 3%. My score has gone up nearly 100 points. I'm sitting at 610.

 

My collection is 2 years old- if I pay it off and get it deleted would my score jump or drop because the loss of an account?

Should I add more money to my Discover card before it is eligible to graduate? I don't want to end up with a card that's useless with no CLI etc
I was looking into refinancing my car as I am currently paying 29.99%- I will probably wait another 6-9 months before applying for any more credit.

How often do I need to use the store cards so they don't close them? I was thinking once every 3-4 months.

Message 1 of 7
6 REPLIES 6
Community Leader
Senior Contributor

Re: advice/suggestions?

If you only have one negative and you get it removed, you’ll be looking at a significant score increase, likely more than enough to allow you to refinance your car at a much better rate. Since PRA will delete themselves upon payment, settle for as little as possible - it won’t matter because it’ll be deleted from your reports.

With your cards, pay off two of them each month before the statement date and let the third report a small balance, $5-6. This will maximize your scoring and is known as AZEO, All Zero Except One.

It’s anecdotally said that a higher secured Disco limit begets a higher unsecured limit upon graduation, so if you can add to the deposit, do so. It may help when it graduates, and it’ll allow you more headroom before your utilization percentage hits scoring thresholds that’ll put a dent in your score.

Most evidence says using a store card every 4 months is enough to keep it open. That should be easy enough to do.


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Message 2 of 7
Established Contributor

Re: advice/suggestions?

Get that Baddie off your account as soon as possible a temporary drop is better than you having it on your information longer,  I wouldn't worry about adding more money rather than just taking great care of your card and raising your AAoA's.     I would wait a minimum one year before Refinancing and if you can do so with a CU as they tend to offer lower rates.     I'm not sure about store cards I would just ask the store itself but you can always put a small amount on them to keep them active 5 dollars or so and just pay it off every month if you want help in best way to do that we can help too!    Good luck on the build it won't be easy trust me I know but the point is you are starting now and it's never to late to start!
















Message 3 of 7
Super Contributor

Re: advice/suggestions?


@Girlzilla88 wrote:

Get that Baddie off your account as soon as possible a temporary drop is better than you having it on your information longer,  I wouldn't worry about adding more money rather than just taking great care of your card and raising your AAoA's.     I would wait a minimum one year before Refinancing and if you can do so with a CU as they tend to offer lower rates.     I'm not sure about store cards I would just ask the store itself but you can always put a small amount on them to keep them active 5 dollars or so and just pay it off every month if you want help in best way to do that we can help too!    Good luck on the build it won't be easy trust me I know but the point is you are starting now and it's never to late to start!


I respectfully disagree. If a collection is deleted there is no drop temp. There will be a major score increase if its the only collection.





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC at 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game. Pay it Forward!
Message 4 of 7
Super Contributor

Re: advice/suggestions?


@3lilnuggets wrote:

Hi! I'm fairly young and am trying to rebuild my credit.  I have 1 collection from a cap one recieved on my 18th birthday maxed out the $300 limit and now I owe like 480? (PRA- recently updated policy to delete within 30 days of paid/settled) which lead to bad credit. ( How long ago was the charge off?) I currently have a few positives on my account- car loan with 11k balance, been making more than the payment it is 9 months old, Discover It Secured with a $200 limit that is 5 months old (Your getting close to graduation. You'll get a CLI after graduating), Kohls $300 because I shop there often enough for my kids it is worth it, as well as Old Navy $250 both these store cards are 2 months. I carry usually a $15 total balance each month so my utilization is at 3%. My score has gone up nearly 100 points. I'm sitting at 610.

 

My collection is 2 years old- if I pay it off and get it deleted would my score jump or drop because the loss of an account? JUMP!

Should I add more money to my Discover card before it is eligible to graduate? (If you got more give more) I don't want to end up with a card that's useless with no CLI etc
I was looking into refinancing my car as I am currently paying 29.99%- I will probably wait another 6-9 months before applying for any more credit.

How often do I need to use the store cards so they don't close them? I was thinking once every 3-4 months.


Once that collection drops off you may get enough of a score boost to peek around at pre-quals. Especially with a CU or your bank. It would help us with what is your FICO score. Is that 610 a FICO from Disco?





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC at 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game. Pay it Forward!
Message 5 of 7
New Member

Re: advice/suggestions?



my "original" debt they purchased was 584- my credit limit was only 300 and I offered 200, they countered with 411 lol and I told them I would not pay a cent over the original limit of $300. I demanded a settlement agreement letter be emailed to me. It took a lot of back and forth on the phone with a supervisor to get it emailed and saved to my desktop as my proof it's ok settled/pif. 

Paid it- now gotta wait for it to be PIF and then the tradeline deleted. And hopefully a score jump.

My discover fico is actualy 633, I'm going with the lower Credit Karma 608. Experian pulls a 615. The original charge off was 2015. I am still debating the addtl limit on the discover because what if i don't graduate?

Message 6 of 7
Moderator

Re: advice/suggestions?


@3lilnuggets wrote:


my "original" debt they purchased was 584- my credit limit was only 300 and I offered 200, they countered with 411 lol and I told them I would not pay a cent over the original limit of $300. I demanded a settlement agreement letter be emailed to me. It took a lot of back and forth on the phone with a supervisor to get it emailed and saved to my desktop as my proof it's ok settled/pif. 

Paid it- now gotta wait for it to be PIF and then the tradeline deleted. And hopefully a score jump.

My discover fico is actualy 633, I'm going with the lower Credit Karma 608. Experian pulls a 615. The original charge off was 2015. I am still debating the addtl limit on the discover because what if i don't graduate?


As far as your store cards from a post above once every 6 months is pretty good. Personally I would not add more money to Discover, if you dont graduate when expected then that might be the time to reconsider.

"If there's a lack of money in your life, understand that feeling worried, envious, jealous, disappointed, discouraged, doubtful or fearful about money can never bring more money to you, because those feelings come from a lack of gratitude for the money you have."

"Reactions are powerful creators because they contain every element needed to manifest—they're a combination of thought, belief, and feeling in action. Positive reactions create more positive things, and negative reactions create more negative things. If you can respond to negative situations calmly and lightly, instead of with emotional turbulence, what happens next in your life will be so much better."

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Message 7 of 7
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