Why is nothing improving my credit scores?

[Anonymous]

I am sure this won't be enough info but will try to provide enough. My scores are 540/567/531. I owe about 20k in student loan debts. I have some collections, primarily telcom and medical. About $1500 left, not all of which is however valid. $2000 remaining on my car payment. Two credit cards in good standing with total available credit lines of $1500 (woot). Utilization on these cards is very low - maybe 5% but did used to consistently be around 90%. I've paid off about $1200 in collections recently. I do have a big smudge on my credit - about $15000 in credit cards I defaulted on but they are dated around Novermber 2009. I was advised not to pay them when I was unemployed and single with two small medically fragile babies, born July of that year. I am afraid to do anything now and reset their clock.

Here is what I do not understand:

1) I pay down my current cards. transunion score goes down 3 points.

2) I get a $200 increase on one of my pathetic little credit cards. experian score goes down 2 points.

3) I pay collections. score does not change..

4) I get erroneous collections removed. score does not change.

What is it going to take? How long do I have to work to see signiifcant improvements? Why do things that should improve it not? Should the evil credit card debts drop off late next year? Can I do anything to see them disappear sooner? My avg FICO for mortgages is the big 500. Is there any hope for me? I want to buy a house before I die. :/

Help.

[Anonymous]

Have you tried writing gw letters?

[Anonymous]

I feel your pain. My report stagnated for about a month, during which time I paid off all of my collections and reduced my reported cc utilization. i think my reports gained maybe a point or three with the paid collections. then suddenly last week...WHAM! I get huge increases from TU and EQ (24 and 28 points, respectively...still waiting on EX to join the party) seemingly out of nowhere. My theory is that all the changes took a while to calculate. The moral of the story: hang in there and (try to) be patient.

[jamie123]

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@Anonymous wrote:

I am sure this won't be enough info but will try to provide enough. My scores are 540/567/531. I owe about 20k in student loan debts. I have some collections, primarily telcom and medical. About $1500 left, not all of which is however valid. $2000 remaining on my car payment. Two credit cards in good standing with total available credit lines of $1500 (woot). Utilization on these cards is very low - maybe 5% but did used to consistently be around 90%. I've paid off about $1200 in collections recently. I do have a big smudge on my credit - about $15000 in credit cards I defaulted on but they are dated around Novermber 2009. I was advised not to pay them when I was unemployed and single with two small medically fragile babies, born July of that year. I am afraid to do anything now and reset their clock.

Here is what I do not understand:

1) I pay down my current cards. transunion score goes down 3 points.

2) I get a $200 increase on one of my pathetic little credit cards. experian score goes down 2 points.

3) I pay collections. score does not change..

4) I get erroneous collections removed. score does not change.

What is it going to take? How long do I have to work to see signiifcant improvements? Why do things that should improve it not? Should the evil credit card debts drop off late next year? Can I do anything to see them disappear sooner? My avg FICO for mortgages is the big 500. Is there any hope for me? I want to buy a house before I die. :/

Help.

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Okay...You need to understand a few things...

Having 1 collection, charge off or late payment on your reports can knock your score down quite a bit. Say anywhere from 75 to 100 points. You have multiple baddies on your reports and they are holding your scores down in the 500s.

A paid collection is treated EXACTLY THE SAME as an unpaid collection in FICO scoring. The only time that you want to pay off a collection is if the lender is threatening to take you to court or they agree to delete the collection from your reports if you pay it. Yes, you can negotiate a pay for delete, it is done all the time.

You need to visit the "Rebuilding Your Credit" forum and learn how to do "Pay for Deletes" and GW (Good Will) letters. I would suggest letting all those charge cards from 2009 age off your reports. They will be gone in a year. Start with your newest baddie and work at getting it removed from your reports. Newer baddies carry more weight in FICO scoring but your scores won't fully recover until your reports are completely clean. Don't despair! There are people here that have started out in a much worse position that you are in and have fully repaired their credit. You need to work on having the baddies REMOVED from your reports and the "Rebuilding Your Credit" forum is the place that you can learn how to do it.

Welcome to the forums! This is a great place with many people that are willing to help you rebuild your credit!

Oh...Another thing...

Don't worry about paying off your auto loan. FICO likes for you to have an open installment loan on your reports. Installment loan debt is treated differently than revolving (credit card) debt in FICO scoring. PAY ALL YOUR BILLS ON TIME FROM HERE ON OUT!