How to improve in 12 months?
Date: Wed, 09/26/2012 - 12:04
Hi, first post on here. I know there's a ton of information on here, but I just feel everyone has a different situation.
My wife and I plan on purchasing our first home January 2014. I found the loan I'm aiming for but my eligibility will be dependent on my credit score. I signed up for a credit monitoring program so I can track my progress for the next 12+ months.
My 3 scores came back as: 673, 691, 731
I was told that my middle credit score has to be a 720 or higher to get the mortgage. So, I'm fairly close, but I don't want to just barely make it. I really want to improve on my scores.
Here's my dings:
1. Collection agency - $247, opened 6/1/11. I paid the balance, and 2 of 3 scores show it as Closed. I honestly don't even remember what it was for, perhaps a medical bill. What are my chances I can work something out with the collection agency to get it removed? What would my steps be? This is probably what is hurting my score the most, am I right?
2. Student Loans #1 - I graduated in 2008 and at the time, my parents were paying my student loans. Around August 2010, they decided to "forget" to pay them and not tell me. Fast forward to December 2010, my account was 120 days past due. Once I found out, I flipped out. I made a triple payment in January to get it down to 60 days, then another triple to get it back to normal February. Since then, I have not been late a single payment. What is interesting though, is Experian is the only one who is reporting it late from 9/10 to 2/11. Equifax and Transunion only shows it 60 days late in December 2010. Is there anything I can do to get this one fixed?
3. Student Loan #2 - My government student loan is broken out in to 7 different loans on my credit score. How does this effect my overall score? If it puts a ding on my report, what can I do? I only make one payment, but I guess it's dispersed through the 7 different loans?
4. Express Credit Card - I had one late payment April 2011 (thought a payment was scheduled... clearly not). The card has been paid and since closed. Is this a smaller ding compared to 1, 2 and 3? Is it worth trying to do anything with that?
5. Not my credit card - My credit reports show a Citi credit card which looks to be that of my wife (at the time, fiance). We lived in the same house. The limit is $12,500 and there is no balance on it (did a balance transfer and paid it off in 12 months). I will obviously call and get that resolved, but what kind of effect does it have on my overall score?
6. Not my credit card #2 - Report shows three American Express cards, one is actually mine, the other two are my father's. He used to have me as an additional member about 6 years ago but I broke away from his account. What type of effect does that have on my overall score?
So, my big question is - with 12 full months before I apply for a mortgage, what is the likelihood that two of my scores (prefer all 3) get about 720? What else can I do, or not do? I have the following REAL expenses that show up on my report:
Car Lease (290 a month)
3 Student Loans (about 200 a month)
American Express (paid in full each month)
Bank of America credit card (1700 limit, currently at 1500 but stopped using & paying down each month)
Jewelry Store card through Wells Fargo (5000 limit, currently has 2200, will be completely paid off in 10 more months)
Thanks for ALL the support well in advance! Looking forward to seeing what this community can help me with =)
My wife and I plan on purchasing our first home January 2014. I found the loan I'm aiming for but my eligibility will be dependent on my credit score. I signed up for a credit monitoring program so I can track my progress for the next 12+ months.
My 3 scores came back as: 673, 691, 731
I was told that my middle credit score has to be a 720 or higher to get the mortgage. So, I'm fairly close, but I don't want to just barely make it. I really want to improve on my scores.
Here's my dings:
1. Collection agency - $247, opened 6/1/11. I paid the balance, and 2 of 3 scores show it as Closed. I honestly don't even remember what it was for, perhaps a medical bill. What are my chances I can work something out with the collection agency to get it removed? What would my steps be? This is probably what is hurting my score the most, am I right?
2. Student Loans #1 - I graduated in 2008 and at the time, my parents were paying my student loans. Around August 2010, they decided to "forget" to pay them and not tell me. Fast forward to December 2010, my account was 120 days past due. Once I found out, I flipped out. I made a triple payment in January to get it down to 60 days, then another triple to get it back to normal February. Since then, I have not been late a single payment. What is interesting though, is Experian is the only one who is reporting it late from 9/10 to 2/11. Equifax and Transunion only shows it 60 days late in December 2010. Is there anything I can do to get this one fixed?
3. Student Loan #2 - My government student loan is broken out in to 7 different loans on my credit score. How does this effect my overall score? If it puts a ding on my report, what can I do? I only make one payment, but I guess it's dispersed through the 7 different loans?
4. Express Credit Card - I had one late payment April 2011 (thought a payment was scheduled... clearly not). The card has been paid and since closed. Is this a smaller ding compared to 1, 2 and 3? Is it worth trying to do anything with that?
5. Not my credit card - My credit reports show a Citi credit card which looks to be that of my wife (at the time, fiance). We lived in the same house. The limit is $12,500 and there is no balance on it (did a balance transfer and paid it off in 12 months). I will obviously call and get that resolved, but what kind of effect does it have on my overall score?
6. Not my credit card #2 - Report shows three American Express cards, one is actually mine, the other two are my father's. He used to have me as an additional member about 6 years ago but I broke away from his account. What type of effect does that have on my overall score?
So, my big question is - with 12 full months before I apply for a mortgage, what is the likelihood that two of my scores (prefer all 3) get about 720? What else can I do, or not do? I have the following REAL expenses that show up on my report:
Car Lease (290 a month)
3 Student Loans (about 200 a month)
American Express (paid in full each month)
Bank of America credit card (1700 limit, currently at 1500 but stopped using & paying down each month)
Jewelry Store card through Wells Fargo (5000 limit, currently has 2200, will be completely paid off in 10 more months)
Thanks for ALL the support well in advance! Looking forward to seeing what this community can help me with =)
Welcome to the site. We are glad to help you with your mortgage.
Welcome to the site. We are glad to help you with your mortgage.
Quote:
1. Collection agency - $247, opened 6/1/11. I paid the balance, and 2 of 3 scores show it as Closed. I honestly don't even remember what it was for, perhaps a medical bill. What are my chances I can work something out with the collection agency to get it removed? What would my steps be? This is probably what is hurting my score the most, am I right? |
Yes a collection hurts your score a lot. Unfortunately paying them does not help your score. You can try to call the CA and reason with them; say something like "look I don't know how I ended up in collections but I paid you right away etc." see if they will delete it in good will. If not you might be able to offer them some token sum (50 or 100 bucks) to delete it. If all else fails, you can dispute it with the bureaus repeatedly and the CA may just stop affirming it.
Quote:
2. Student Loans #1 - I graduated in 2008 and at the time, my parents were paying my student loans. Around August 2010, they decided to "forget" to pay them and not tell me. Fast forward to December 2010, my account was 120 days past due. Once I found out, I flipped out. I made a triple payment in January to get it down to 60 days, then another triple to get it back to normal February. Since then, I have not been late a single payment. What is interesting though, is Experian is the only one who is reporting it late from 9/10 to 2/11. Equifax and Transunion only shows it 60 days late in December 2010. Is there anything I can do to get this one fixed? |
Best thing you can do is WRITE to the loan servicer. Tell them exactly what I told us; be clear that you had no idea it was past due and that you are requesting a goodwill reporting fix. 9 times out of 10 they will be happy to help you out, especially since you paid triple two months in a row to fix it and have paid on time since. Also make clear you are trying to buy a home. They may reverse all the lates or knock it down to a 30 day.. it all depends. Moving it to a 30 day even will do WONDERS for your score as 30 day lates are insignificant compared to 60/90.
Quote:
3. Student Loan #2 - My government student loan is broken out in to 7 different loans on my credit score. How does this effect my overall score? If it puts a ding on my report, what can I do? I only make one payment, but I guess it's dispersed through the 7 different loans? |
Well if you are paying then no 'dings' will be put on your score :)
Quote:
4. Express Credit Card - I had one late payment April 2011 (thought a payment was scheduled... clearly not). The card has been paid and since closed. Is this a smaller ding compared to 1, 2 and 3? Is it worth trying to do anything with that? |
Yes and it is almost irrelevant, don't worry about this.
Quote:
5. Not my credit card - My credit reports show a Citi credit card which looks to be that of my wife (at the time, fiance). We lived in the same house. The limit is $12,500 and there is no balance on it (did a balance transfer and paid it off in 12 months). I will obviously call and get that resolved, but what kind of effect does it have on my overall score? |
Helps tremendously as it is high limit and gives you a high revolving available credit. Do not do anything with this and make sure it stays on your report.
Quote:
6. Not my credit card #2 - Report shows three American Express cards, one is actually mine, the other two are my father's. He used to have me as an additional member about 6 years ago but I broke away from his account. What type of effect does that have on my overall score? |
It helps a lot. If you can get added back that would be good for the backdated credit history. I have a 24k limit on my amex card and added my friend as a couser just for the boost to his credit so he could buy his house, his score went up 25-30 points or so.
You are in good shape. In 12 months you will be in the mid-high 700s if you keep up what you are doing and take the advice above. You may want to consider setting up another credit card that has no annual fee so you can get the extra revolving credit available on your report. Put your netflix or whatever on it every month and pay in full.
Thank you so much for the advice & insight! As far as #3 goes -
Thank you so much for the advice & insight! As far as #3 goes - the only reason I asked is because the credit monitoring site said that 3+ "installment" payments can look bad on the report. Since there's 7 for just one loan, I wasn't sure what that was doing to my score.
I'm going to call the CA and see what they can do for me. I'll also write to the student loan people as well. If, and only if, these get deleted, how long does it typically take to hit the credit score? I can get my score twice a month, but I know I have a lot of time to take care of this. Just curious if it's instantly, weeks, months... etc.
Thanks again
Just an update - I was able to get the collection agency rem
Just an update -
I was able to get the collection agency removed from my credit report. Once it is removed from my report and it no longer shows on the actual credit report, does the credit score automatically change? Or does it take some time to repair?
As far as the student loan goes, they rejected it and stated that they are not allowed to remove it because it's a Federal loan. Does anyone know if that is true?
Thanks
