Hi everyone, This is my first post in this forum. Basically, I messed up my credit a couple years ago, got into very heavy debt, and am finally in a position to fix it. For the last few years, I racked up 13,000 on one CC, and 2000 on department store cards. The department cards were closed due to inactivity, even though I was still making payments monthly. I also had many loans with Wells Fargo, around 8,000 in total. They were in perfect standing. I consider myself a victim of bad lending practices (28 % interest anyone ??), and didn't really understand interest rates. My fault. I will never do such things again. My FICO score is around 550. There were a couple late payments (30 days) and one collection for an old home phone bill ($160) that was marked as paid about 7 months ago. I find in hard to believe that my score was that bad, and I can only attribute it to the fact that my cards were maxed out almost every month for a year, I had 1 collection, and a couple late payments. After researching a strategy, I went with a consolidation loan. the bank wouldn't give me one because my assets were not greater than net worth. So I turned to my parents. Thank god I'm in a position where I could turn to someone for help that wasn't going to screw me. I took out a favorable loan with them, best art is it's off the "official" record. I've now paid off EVERY last bit of debt. No CC balance. No loan, No car lease (I own a used car), No mortgage. I will buy groceries every month, pay it off in full. I pay all my bills on time (utilities, cell phone, etc..) every month. I want to buy a home in 2 years. Realistically, how much will be credit score increase ? I do not plan on applying for any more credit, so there shouldn't be any new inquiries on my account. Can I expect at least 100 point increase in 2 years ? Thank you very much for any responses!
You might if you're using credit cards. When I first read your post, I thought that you weren't using cards but were paying cash for everything. If you're using your cards and paying them on time, it depends on the rest of your history. Without recent, good credit and a decent history, you aren't going to get a mortgage. It sounds like you're trying to build that history. But your score will take into account such things as utilization ratio, and how long your credit history is. How long have you had your oldest open account? How many accounts do you have? What percentage of your available credit are you using? All of these things are taken into account when computing your score.
Thanks for the response. I will be using my credit cards, but I will never be carrying a large balance. I would really rather not take any more loans until I go for a mortgage. I want to be allergic to debt, but understand I need some sort of debt when I get a mortgage. I have been using the same VISA card for about 6 years now, so I have some history established. I'm really shocked that my score was so low. I've had about 4 loans, 2 with a bank, 2 with wells fargo, and the were all in perfect standing, and I paid everything off in full. Now my wife does have a supplementary card from me (my VISA account), and she has declared bankrupcy in the past, is that affecting my score now ? Thanks alot, appreciate the response
Her BK shouldn't affect you unless you were listed on the accounts that she included in bankruptcy. Have you gotten the three individual reports from the three bureaus? If not, get them. Don't use one of the 3-in-1 reports for this. Then go over your reports, line by line, and mark anything that is not correct. You may find some information that is pulling down your score, and you can dispute what is incorrect (dates, amounts, status, etc).
Write a good will letter to the creditor asking for forgiveness on the lates, if they would please reconsider reporting them, and update the credit reporting agency to remove the lates. Point out that you have not been late since then. Might use PlanetFeedback: Voice of One, Power of Many to send the letter. Also have you requested the interest rate being lowered on accounts? Ask every six months to a year for a better interest rate. Does not hurt to try. Did any of the accounts go into collections, then you should dispute these with the credit reporting agency and try to get them deleted.
Hi, thanks for the responses. I will send goodwill letters to my creditors. I guess it can't hurt If I request a lower interest rate, does that count as another inquiry ? Can I use the "I've paid thousands of dollars in interest thus far" to try to get a lower rate. Threaten to close the account perhaps?
I't shouldn't count as a inquiry you have a right to ask question's do the good will letter's,i wouldn't use threat's.you need the history.
Right. Don't threaten to close an account--they might do it. If the lates are recent, I'd hold off on the goodwill until you've established a good payment history for at least six months. They're going to be more willing to cooperate if you've been paying timely.
If they pull a credit report it should be a soft hit (account review). You can ask them ahead of time though.
Well, this is great. I recently moved from eastern canada to western canada. Naturally, I went into my bank to move my accounts over to a local branch. I just pulled my report, and I see 2 inquiries on it, for 2 different days I called my bank, they said that one was for just opening a new account and said it should not have been done as I'm an existing user, and the other was for my overdraft that was switched over, as they said a new application had to be done, this was moved over 1 week after I switched over Ummm...I was moving my account from a local branch, and was not told that any credit inquiry(s) was going to done. I emailed by personal banker, hoping she can remove them. How much does 2 inquiries count for ??
Overall is affects 10% of the credit score. Each inquiry can cost 2 - 10 points average. Really depends on how strong other areas of the credit score are. 35% affects payment history 30% affects utilization 15% affects established credit history 10% affects inquiries and new credit 10% affects mix of credit used
I'm not sure the rules are the same in Canada. Most of the advice given here is based on US operations.
Addresses shouldn't affect the credit score. If something is manually reviewed, as for a mortgage, then it might matter.
