Am I Doing the right things - and will this go up?

[Anonymous]

I went through some hard financial times when my son was diagnosed with bi-polar - and health insurance didn't cover the therapy - consequently I went into deep debt and behind on my payments. Up until this point in my life I have had stellar credit. 6 months later I am trying to get back on my feet financially. I finally had the courage to look at my credit scores and here they stand.....

TU
12/20/07 589
11/26/07 581

EQFX
12/20/07 593
12/14/07 588

EXP 12/20/07 646
12/14/07 616
11/26/07 608

In the past month I have called 3 of the retail credit accounts and requested a goodwill adjustment - which they granted. All but 1 late has been removed. I still have several late payments - 3 with my old auto loan, which I refinanced with another lender and have paid off. 3 with a Bank of America loan. Bank of America has been the most uncooperative - actually raising my interest rate because of my hardship. I have no collections, charge offs, etc. Just the late payments (which I understand are horrible to have). I converted most of my debt into installment loans rather than revolving credit - but it is significant. I make a great salary and can pay down much more than minimum....

QUESTIONS - if I continue to make the payments on time - will this in and of itself help my score go up? Is there anything else I should be doing (aside from winning the lottery and paying everything off)?

And why is TU and EQFX so much lower than EXP- even after some adjustments by the lenders?

[haulingthescoreup]

Hi, welcome to these forums! I'm sorry to hear of your son's difficulties --I hope he's doing better. And congratulations on the GW's for your lates!

Yes, slow and steady will help you get back where you were. Do you have any revolving accounts left? You do need to have some to help your credit scores, and if you know how to manage the utilization (balance to credit limit) and the timing of your payments, they can be enormously helpful.

Sorry also to hear about BofA's crappy attitude, but it's not unusual in these tough credit times. If you PIF every month anyway, it doesn't matter, although it's irritating. Do today's scores show the removed lates? How many others are left, and what are their dates? Are they all 30-days, or did any go 60 or 90 days or later?

Once we see your baddies and their dates, we should be able to make some educated guesses and recommendations about what you might want to do.

edit: oops, can't tell boys from girls any more, it seems

Message Edited by haulingthescoreup on 12-20-2007 03:08 PM

[Anonymous]

Thanks for responding....here is some more detail...

Retailer has a 60 and 90 day late from June and July, 2007 – I called this morning and asked for a goodwill adjustment – and I am waiting to hear.

BofA - has 2 - 30 days late posted in Feb/March 2007

Toyota Motor Credit – has 3 – 30 days late in Feb/March/April 2007

Every agency removed the other Goodwill adjustments from the retailers except for Equifax still has not removed theirs.

I have one credit card with Citibank – which is a revolving account and always has been in good standing. It has a high balance 36,000 – but they worked with me and set the interest rate at 1.9% for the life of the card – or until I pay it off.

[haulingthescoreup]

Just noticed that I had turned your son into your daughter --sorry about that!

As a rule of thumb, 30's hurt less after one year and 60's sort of start to fade after two years. 90's and 120's hurt a long, long time. (I have a 9-month-old 30-day and a 22-month old 30-60-90.) I would keep trying to GW your remaining lates and keep your fingers crossed.

The biggie is the $36,000 on the Citi card. What is your credit limit on it? High utilization kills scores, so since you have a good income, I would throw everything that you can at that. There are break points in your util where your score changes, and I've seen several guesses. 90% of your CL (or maybe 85%) equals maxed out. Then the scores change when you go under 70 or 75%, under 50%, under 30%, and under 10% (the ideal.) For now, don't let any other revolving accounts (CC's) report. Eventually, let one report under 10% (doesn't matter which card) and have the others at $0. There's no hurry on paying down your installment loans (car, etc.) --just be sure to keep them timely.

All this needs to be done within the bounds of maintaining your financial security --savings, etc. With luck, you won't need new credit in a while, and the lates that just can't be removed will simmer down over time.