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Shellybean23

Need advice where to go from here

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Hello all, I'm looking for some advice tailored to my current credit situation if anyone could help. I'll try to keep it organized and simple.

 

My goal is to bring my credit up enough to eventually qualify for a mortgage in the near future. I know I've got a ways to go but I desperately want to expedite the process as quickly as possible.

 

I've been monitoring my credit scores closely in the last year and have made a lot of progress getting collections removed but it feels like things have slowed down and I'm wondering what else I can do to boost my scores.

 

My EX score was 674, although it seems they're now giving me the FICO 8 score which puts me at 660. No collections. My prettiest credit report.

 

TU is 630, two paid collections from early 2016, one unpaid(open?) judgement from 5 years ago(I'll be disputing that in the near future).

 

EQ is 595 with 3 unpaid medical collections ~6.5 years old. Hopefully I can get these off soon but I've hit a bit of a dead end in the meantime.

 

My oldest accounts are student loans from 2009 that I'm on an income based repayment plan for (0$ a month) so they're not delinquent but I need to pay a chunk off since I've let the interest rack up. My newest account and only credit card is the capital1 semi-secured card I just opened in January of this year. I've kept my utilization at ~4%. It exists solely to build my credit.

 

My scores have crept up a few points since opening the cap1 card but I'd like to know what else I could do to boost my credit scores while I work on the last uglies on my reports.

 

I considered opening an Open Sky secured card since that is guaranteed approval and no hard pulls but I don't know if that would be worth it since my scores are probably *almost* good enough for another semi-secured/possibly unsecured card.

 

I also just became aware of the concept of personal "credit-builder" type loans that credit unions offer, however I'm not yet eligible for that at my credit union until I've been a member for 90 days, plus that is a hard pull on my credit report. I only have two inquiries on my reports in the last two years, and am unsure whether another inquiry would hurt my scores/look bad enough to even worry about.

 

Should I just sit tight and not bother opening any new accounts right now? If I did, would it be preferable for me to wait until I can get something better than a (semi-)secured card, or a loan from my CU, or go ahead and open an Open Sky card just because I can? What would look better and affect my scores more? Is there anything else out there I'm not aware of(I'm sure there is, I have a lot of learning to do still).

 

Lastly, would it possibly help even more to pay off as much of my student loans as I can afford to right now? The original loans collectively total ~8k but after I've let interest build up its now at 11k. I've been on an income based repayment plan for the last year but it puts my monthly payments at 0$ and I've set that on the back burner.

 

Thanks for reading, I know this is very long and probably shows my ignorance on this topic. I need help figuring out where to invest my time and money at this point.

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I think that the best thing you should work on is getting those medical and that old judgement off your reports in the next couple of months. If you get that done you might see your score go up enough to apply for some better lenders. You don't need Open Sky/Secured cards at this point.

 

I guess you read the Alliant CU installment loan hack right? Most of the boost to credit builder loans is from being able to prepay it down to <8% and having very low utilization on overall installment loans. Once you have other installment loans like mortgages it doesn't help you much to have this type of credit builder loan. I'm not sure though if student loans fall in the same category.... if it does I'd guess unless you pay your student loans down similarly it won't make too much of a difference. If it's a different category then you should definitely do as described in that Alliant Loan thread.

 

Don't worry about inquiries. It's never the reason for a credit decision. It could be new accounts, it could be derogatory marks on your report, it could be other things but it's not inquiries. Don't fear them.

 

You should be adding 2 or more CC in the not to distant future. 3 is the minimum for the ability to maximize scoring.

 

I'm thinking you should work on those medicals and judgement and in 3 months when your card is over 6 months old and if you get those above negatives removed you might even be in the high 600 to low 700s for Fico08 scores on EQ and EX. With a 700 score you should be able to get unsecured rewards cards like Chase Freedom or Amex Blue Cash Everyday or a Bank of America Cash Rewards, i.e. something with decent rewards and no AF you can keep open going forward. Freeze Tu before applying since it's your dirty report. And check the credit pulls database to see which creditors pull EX or EQ in your state, luckily for you most banks like those two.

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Are you working now, or what type of career do you plan to enter? If you plan on getting a government job or working for a non-profit then you should keep the student loans on hold. Then once you have your job, make 120 on time payments (at the minimum amount possible) and your loans will be forgiven.

 

Is interest still building on your student loans now that have the 0$ income based payment plan? You will have to crunch the numbers yourself to see how much you want to pay them down based off of current and expected future income to see what works best for your situation. There is a good online app on Tuition.io that allows you to plug in your student loans then play around with various scenarios.

 

+1 to what Willis said. You need to add (at least) two more revolving accounts to really boost your FICO, four more for near maximum benefit. You are within striking range of some prime credit cards on EX. You stand a good chance of an AmEx PRG and then do a double app for something like a AmEx Delta Skymiles card (one of the easier one's to qualify for. It has an AF but you'll get some free bonus miles).

 

How old is your Cap1 Secure card? If it's over 6 months old you could app another Cap1 card (Platinum for no AF and QuickSilverOne with AF but cashback)

 

You could also freeze TU and EQ and app the Discover NHL card. If not approved immediately app the secured card and you won't waste a HP.

 

I don't think a secured personal installment loan will do you much good. It would be negated out by your student loans which are installment loans. The secured personal loan works best if you have no installment loans on your profile.

Edited by ClaimJumper

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Don't get an open sky, just dont. My bigger question is why are you trying to quickly get this done to get a mortgage if you're income is low enough to qualify for $0 repayment plan. I get it, I started my plan to get my cap together last April to qualify for a mortgage as well, but along with building my credit up Ive put 6k in the bank for down payment/emergency fund and then end game for me is to have my scores in the mid 700s by next April with 15k in the bank. Still not enough money for a 10% down payment and a 6 month emergency fund but not in a hurry to move so that's when I'll start looking and make it work if a deal arises. A 30 year commitment is not something I want to rush into. It's my plan and doesn't have to be yours just some food for thought. Quicken loans told me they'd approve me with a 580 fico last April when I applied just to see where I was btw, I don't remember the rates though I assume u save a ton over 30 years with a better score.

Edited by FormerAnalyst

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The medical collections should be very easy to get off at this point. That will free up Ex and EQ for pulls.

 

I'm on board with trying for Amex or another EX puller. Your biggest increase possible right now is getting a second card. A third will increase more.

 

Installments aren't worth your time at this point.

Edited by EricDET

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Sorry to have posted this thread only to have gone MIA, the flu was at our house for near two weeks and I'm thoroughly exhausted. But I am extremely grateful for the all the rich feedback in the responses here! I've read everyone's comments at least 3X and will probably keep referring back to the good advice here.

 

Willis, no I haven't seen the Alliant CU installment hack. I will need to check that out soon. My brother actually told me about the credit union loans giving his own score a decent boost and it was the first I ever gave it thought in this regard. We're on a similar credit repair journey, but he probably had/has different factors at play that caused his score to be affected differently. Good to hear about inquiries not being something to worry about, I'm starting at a very elementary level and always assumed inquiries were to be avoided like the plague. This is also the first I've learned about being able to free an ugly report in order to get the nice looking ones pulled instead. I know I'm going to learn a lot here if I stick with it.

 

ClaimJumper, I don't foresee a non profit or government job in the future otherwise that sounds like a good strategy. I will need to acquaint myself with how student loans affect credit, so far at this point I've only been worrying with getting collections off. I realize now that student loans might be more a part of my credit profile than I have been thinking. If you know of any good resources on how student loans affect the credit picture, I don't even know what I should be searching for.

 

FormerAnalyst, I had a feeling everyone would tell me to skip the OpenSky card here. Glad I ran this by everyone, I had the feeling I'd just be tying cash up that could be put to better use. As to the repayment plan, early last year I hit a rough patch for six to eight weeks with one child in the hospital and my hours/income were reduced during that time. I applied for the income based repayment plan and that's when I qualified for the zero monthly payment. Since then my income has recovered to what it was before and I'm getting ready for a reassessment the end of this month. To be sure, my income is fairly low (single mom of two) but I have almost 8k in the bank. I'm hoping to qualify for a USDA Direct loan for a house. The sense of urgency arises from wanting to move with my kids to a safer area with less crime and more kid/pet friendly. I'm so tired of renting, I feel like I'm just throwing the money away each month and tired of feeling like a sardine packed tightly alongside the others. I desperately want my children to be able to run in a backyard and have real pets. I don't know how else to put it, but I really want this year to be the last year I rent anywhere. I know I have a little ways to go still

 

EricDET, I will definitely give AMEX a look!

 

I know this may be a dumb question but can I try to get those other two CCs as soon as possible or is it absolutely necessary to wait? I gather from above that you cant add a cap1 card within six months of opening the previous one, but how about for other cards? Am I waiting for my scores to climb only so I can get cards with better rewards and rates? Or could I qualify for something that is still pretty decent, at least better than a secured card, but not that high a tier? Would there be any harm? Is it too soon to try to open other accounts?

 

My next step either way will be trying to get the remaining collections and judgment removed, but should I try opening more cards in the meantime even if that means I wont get the best out there?

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Sorry to have posted this thread only to have gone MIA, the flu was at our house for near two weeks and I'm thoroughly exhausted. But I am extremely grateful for the all the rich feedback in the responses here! I've read everyone's comments at least 3X and will probably keep referring back to the good advice here.

 

Willis, no I haven't seen the Alliant CU installment hack. I will need to check that out soon. My brother actually told me about the credit union loans giving his own score a decent boost and it was the first I ever gave it thought in this regard. We're on a similar credit repair journey, but he probably had/has different factors at play that caused his score to be affected differently. Good to hear about inquiries not being something to worry about, I'm starting at a very elementary level and always assumed inquiries were to be avoided like the plague. This is also the first I've learned about being able to free an ugly report in order to get the nice looking ones pulled instead. I know I'm going to learn a lot here if I stick with it.

 

ClaimJumper, I don't foresee a non profit or government job in the future otherwise that sounds like a good strategy. I will need to acquaint myself with how student loans affect credit, so far at this point I've only been worrying with getting collections off. I realize now that student loans might be more a part of my credit profile than I have been thinking. If you know of any good resources on how student loans affect the credit picture, I don't even know what I should be searching for.

 

FormerAnalyst, I had a feeling everyone would tell me to skip the OpenSky card here. Glad I ran this by everyone, I had the feeling I'd just be tying cash up that could be put to better use. As to the repayment plan, early last year I hit a rough patch for six to eight weeks with one child in the hospital and my hours/income were reduced during that time. I applied for the income based repayment plan and that's when I qualified for the zero monthly payment. Since then my income has recovered to what it was before and I'm getting ready for a reassessment the end of this month. To be sure, my income is fairly low (single mom of two) but I have almost 8k in the bank. I'm hoping to qualify for a USDA Direct loan for a house. The sense of urgency arises from wanting to move with my kids to a safer area with less crime and more kid/pet friendly. I'm so tired of renting, I feel like I'm just throwing the money away each month and tired of feeling like a sardine packed tightly alongside the others. I desperately want my children to be able to run in a backyard and have real pets. I don't know how else to put it, but I really want this year to be the last year I rent anywhere. I know I have a little ways to go still

 

EricDET, I will definitely give AMEX a look!

 

I know this may be a dumb question but can I try to get those other two CCs as soon as possible or is it absolutely necessary to wait? I gather from above that you cant add a cap1 card within six months of opening the previous one, but how about for other cards? Am I waiting for my scores to climb only so I can get cards with better rewards and rates? Or could I qualify for something that is still pretty decent, at least better than a secured card, but not that high a tier? Would there be any harm? Is it too soon to try to open other accounts?

 

My next step either way will be trying to get the remaining collections and judgment removed, but should I try opening more cards in the meantime even if that means I wont get the best out there?

 

Even one card will help your scores dramatically. I see no benefit in waiting, as your EX is clean. Search around for EX pullers.

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