Need Help Breaking 600s

[Prakas]

I have 8 charge offs, totalling about 28k. I'm settling my biggest charge off account  ~9k balance for 70% off, my last payment on it is the end of Feburary. Can I expect a boost in score? From what I've read, the balance of charge offs still affect your score.

My fico score is about 524. I only have one active card, a secured open sky for 500. It's maxed but I'm paying it off within a month or so. I did simulation, it said my score would go up to about 570 if i pay it off.

I'm trying to get my fico in the 600 range so I can refinance my 30% $17,500 auto loan. Even if i can get approved at 15%, that's a heck of an improvement. But right now, I can't get approved for anything with my score being this low. Any suggestions on getting to 600+? Do I need a 2nd card? The simulation only gave me 570 paying off my active credit card.

[FicoMike0]

To get opinions on the cos, you'll need to list them all in detail.

Having a card maxed is certainly hurting. The good news is scores will improve quickly when the utilization is decreased, best under 9%.

[FlaDude]

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@Prakas wrote:

I have 8 charge offs, totalling about 28k. I'm settling my biggest charge off account  ~9k balance for 70% off, my last payment on it is the end of Feburary. Can I expect a boost in score? From what I've read, the balance of charge offs still affect your score.

My fico score is about 524. I only have one active card, a secured open sky for 500. It's maxed but I'm paying it off within a month or so. I did simulation, it said my score would go up to about 570 if i pay it off.

I'm trying to get my fico in the 600 range so I can refinance my 30% $17,500 auto loan. Even if i can get approved at 15%, that's a heck of an improvement. But right now, I can't get approved for anything with my score being this low. Any suggestions on getting to 600+? Do I need a 2nd card? The simulation only gave me 570 paying off my active credit card.

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Unfortunately simulators are notoriously unreliable. Adding another card would only (potentially) help in the short term if it lowered your total utilization percentage. Do you have any inquiries or new cards in the last year? If not, you will see a score hit from a new inquiry and taking your age of youngest account to zero, so it definately would't help in the short term in that case. At this point getting your balance to zero or close is probably the only thing that will really help in the short term, but hard to say how many points that will gain you.

[SouthJamaica]

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@Prakas wrote:

I have 8 charge offs, totalling about 28k. I'm settling my biggest charge off account  ~9k balance for 70% off, my last payment on it is the end of Feburary. Can I expect a boost in score? From what I've read, the balance of charge offs still affect your score.

My fico score is about 524. I only have one active card, a secured open sky for 500. It's maxed but I'm paying it off within a month or so. I did simulation, it said my score would go up to about 570 if i pay it off.

I'm trying to get my fico in the 600 range so I can refinance my 30% $17,500 auto loan. Even if i can get approved at 15%, that's a heck of an improvement. But right now, I can't get approved for anything with my score being this low. Any suggestions on getting to 600+? Do I need a 2nd card? The simulation only gave me 570 paying off my active credit card.

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1. Welcome to the forum.

2. Certainly paying off the credit card would help. How many points it will get you is anybody's guess.

3. Not much point in getting a 2nd card.

[FireMedic1]

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@Prakas wrote:

I have 8 charge offs, totalling about 28k. I'm settling my biggest charge off account  ~9k balance for 70% off, my last payment on it is the end of Feburary. Can I expect a boost in score? From what I've read, the balance of charge offs still affect your score.

My fico score is about 524. I only have one active card, a secured open sky for 500. It's maxed but I'm paying it off within a month or so. I did simulation, it said my score would go up to about 570 if i pay it off.

I'm trying to get my fico in the 600 range so I can refinance my 30% $17,500 auto loan. Even if i can get approved at 15%, that's a heck of an improvement. But right now, I can't get approved for anything with my score being this low. Any suggestions on getting to 600+? Do I need a 2nd card? The simulation only gave me 570 paying off my active credit card.

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Settling 1 of 8 CO's isnt going to do much for  score change. If all were settled and reflected a $0 balance. That would do the most movement. No longer any of them reporting a CO which is a killer. Plus it still goes towards your overall util %, Work on all of them. Thats when things will really change.

[Prakas]

O lord, so it's gonna be awhile       So all 8 have to be settled in order to really see an improvement. No way to really hit 600 then in the very near future.

[Realist]

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@Prakas wrote:

I have 8 charge offs, totalling about 28k. I'm settling my biggest charge off account  ~9k balance for 70% off, my last payment on it is the end of Feburary. Can I expect a boost in score? From what I've read, the balance of charge offs still affect your score.

My fico score is about 524. I only have one active card, a secured open sky for 500. It's maxed but I'm paying it off within a month or so. I did simulation, it said my score would go up to about 570 if i pay it off.

I'm trying to get my fico in the 600 range so I can refinance my 30% $17,500 auto loan. Even if i can get approved at 15%, that's a heck of an improvement. But right now, I can't get approved for anything with my score being this low. Any suggestions on getting to 600+? Do I need a 2nd card? The simulation only gave me 570 paying off my active credit card.

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You appear to be facing a challenging uphill battle, but there's a silver lining in every crisis.  

Since there are already charge offs on your accounts, and you've managed to negotiate a 70% reduction on one of those payments, your credit score has already taken most of the brunt of the negative impact.  Not all, but most.   One or two single actions will not remedy this situation, but instead require a combination of actions.  Each account you settle, will continue to show for seven years on your credit report, so I ask, why not settle them all?   

Perhaps you have enough money on hand to do this, or perhaps you might delay while saving up money, and buying enough time to earn favorable settlement amounts.   With this, the longer you wait to settle, you may face increased risk with the lender/debt holders and their desire to pursue a deficiency judgement in court.  Factors that help in this negotiation are being between jobs, as you can't bleed a rock.  Bad economy.   When neither of these are an issue, it's more of a balancing act to strengthen your hand, while not pushing it too far.

What will occur should you pursue this path, and settle your debts, is that every amount settled, the difference will be taxed as personal income for the year.  With the amount you owe, if it was all cleared out as settled, your credit score would most likely jump to a 625-650 range, give or take.  Why is this?  Because while settled isn't great, reducing your overall debt load will help very noticeably to offset the negative.

In seven years these fall off your report, but it doesn't mean you can't do anything in the meantime.  You can attempt to acquire credit builder loans, or personal loans in small amounts and short enough terms, and pay these monthly.  A simple $1000 loan at a 9% interest, will cost only $4-$5 per month in interest.  Allow the bank to earn their pennies, so you can start rebuilding that credit portfolio.    Acquire one (1) credit builder credit card as allowed  (scratch this part, just noticed you already have a card).  Re-establish a new credit history, and a show of on time payments.   Then attempt to work on the car rate.  

When it's done, thats the moment to reflect.  It's going to take time to heal from this, but the more positive steps you take, the less impact the settlements will have over time.   While you continue to build your new credit, your score will raise conservately over time.  Then, when these settlements fall off, you won't even recognize your new and improved score.

Time tends to heal.

[Thomas_Thumb]

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@Prakas wrote:

I have 8 charge offs, totalling about 28k. I'm settling my biggest charge off account  ~9k balance for 70% off, my last payment on it is the end of Feburary. Can I expect a boost in score? From what I've read, the balance of charge offs still affect your score.

My fico score is about 524. I only have one active card, a secured open sky for 500. It's maxed but I'm paying it off within a month or so. I did simulation, it said my score would go up to about 570 if i pay it off.

I'm trying to get my fico in the 600 range so I can refinance my 30% $17,500 auto loan. Even if i can get approved at 15%, that's a heck of an improvement. But right now, I can't get approved for anything with my score being this low. Any suggestions on getting to 600+? Do I need a 2nd card? The simulation only gave me 570 paying off my active credit card.

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Charge offs are not cummulative. Paying off one won't help score if others remain. One possible exception is impact can lessen with age. So, paying off a 1 year old CO may give you a few points if all the others are 4-6 years old.

You only have one card. Therefore, it needs to report a non $0 balance every month to avoid the: "no recent revolving activity penalty".

Fico does penalize for high aggregate revolving credit utilization AND highest revolving utilization on any card independently. So, you are being penalized for both. Your best option is to have the card report under 9% of the CL but atleast $5. So, in your case reported statement balance of $5 - $45 would be best.

You can charge more on the card during any month. The key point is reported balance on the statement. For example, If you charge $300, make a progress payment of $280 a couple days before statement cut date so only a $20 balance reports on the statement. Then pay the statement balance before the due date.