Score increase ?

[Anonymous]

I have recently been repairing my miserable credit. I have 5 credit cards with a total credit limit of $4600. I recently paid everything to a zero balance (about $2200). I had 3 collections that have been removed and also paid a $1741 post due student loan off. My current scores are all around 540. How much of an increase will I get from this?

[Anonymous]

Do you have other derogs on your reports? If those were all of them, getting them removed/paid will help. Having the late loan paid is good but you should Goodwill the provider to see if you can have them change the lates to “no data”. That will help also.

As for usage, paying off that amount brought you through two scoring thresholds which I could see being worth 20-30 points on its own. Pick one card and put a small ($5-10) charge on it and let it report. This will avoid you suffering the “no credit usage” penalty which can cost you 10 points give or take.

[Anonymous]

The only derogatory items on my report were 3 medical collections which have been removed completely, and the past due student loan. I inquired about a goodwill adjustment but they wanted no part of it. I am needing to get to a 620 to utilize my va loan to purchase a home and am trying to figure out a timeframe (realistically) that I will be at this number.

[Anonymous]

Gotcha. You should implement AZEO (lots of info can be found searching the forum), but basically, use your cards as you like. As the due dates approach, pay all to zero except one of them. Allow that to report a small balance of $5-10. This is a way to maximize your scores. If you now have no loans active on your profile, look at a self-lender loan, as FICO likes to see an installment account as well as revolving accounts. Adding one of those and immediately paying it to less than 8.9% of its starting value will net you some more points.

Once all of your cards report to the bureaus (give it a week after their statements cut, to be certain) order a 3 bureau report to get your current FICO scores and let us know where all of your work has landed you. From there we can try to guide you and help you keep moving in the right direction. Note that your FICO8 scores aren’t what matter for this - your FICO mortgage scores are what you need to work on. Getting two of the three at or above that 620 figure will put you in the right place, as the underwriters go by your middle mortgage score. You’ll need to order full reports to get those. You can get all 3 here from MyFICO, but wait at least a week after the statement for your last card is cut so you can be assured that all of them have reported your new balances.

[DollyLama]

I agree about having a small balance report on 1 card only. But not obtaining a SSL to replace any paid off loans. They may affect FICO 8 scores more harshly, but not the mortgage scores nearly as much. I think it would be more harmful to take a hard pull inquiry, new account, reduction of Youngest age of account, Average Age of accounts. 

If you were just in general rebuilding credit, or keeping up scores with no big apps like a mortgage or auto, it would be fine. But seeking credit right as you plan to app is not a wise move, IMO.