First of all thank you for reading my post. I am looking for some advice in improving my credit score. I recently went up about 30 points from 580 to 610 and I am excited about that (I know that sounds bad). The reason for my improvement is mainly due to Capital One offering me a credit card with a 500 limit which I have managed nicely for about 6 months now. In fact they just increased my limit to 750 and I am maintaning a balance under $50 just to show my effort. I went through a rough financial time about 3 years ago and I have managed to pay down almost all of my old credit cards to almost nothing. The balances were at one time almost $40,000 and now are less than $4,000 and are all closed besides for the Capital One card. The main reasonsfor my low credit score is two fold. I have an old judgement against me from Chase credit for $5,000 which I have actaully paid down to under $1,000 via the law firm and will be done paying in less than 6 months. The law firm told me that once I am paid in full they will be sending a letter indicating this to the credit bureau. My second problem is an old charge off with LVNV funding for an electronics store account. This is actually a dispute I had with them for a computer that I purchased for $500 that broke and I refused to pay. This was 4 years ago and it is still on my account as "KD" and the balance is up to $1,800. Sorry for being long winded here but is there anything I can do to improve my score with these 2 main issues? It says on my credit report that it is referred to a law firm years ago but I have no info on that. Does it make sense to contact LVNV to try and settle this somehow and if so would this help my score or is this a lost cause? When I completely pay off the Chase judgement with the law firm and they send the letter will this improve my score? If I keep up a good track record with Capital One will this keep improving me? One last thing, how bad is a score of 610? Am I going to have trouble obtaining an auto loan at this score when I need a new car? Any advice on any of these issues would greatly appreciated. Thanks again for your time.
Congratulations on paying off 35k worth of debt in three years. Basically paying off LVNV Funding and Chase will not help your credit score. A payed charge off isnt much better than a nonpaid charge off and will likely have little to no affect on your actual scrore. Your best bet is to try to negotiate with LVNV Funding for a deletion in exchange for payment (lots of threads on this you can look into). If you are successful in getting it deleted that will definately help your score. Make sure you get EVERYTHING IN WRITING when negotiating with CA. Now some Banks and CU will not give you a loan for a car or anything for that matter if you have charge offs that still maintain a balance (in my experience). For example I had a charg off with Cap1 and my CU wouldnt give me a loan regardless of my credit score until I payed them off, once I payed them off they told me they would have no problem giving me a loan, they said they dont give loans to people with obligations to other banks regardless of credit score. I am sure you can get an auto loan with a 610 credit score but you may not get the interest rate you are looking for. The best thing you can do it continue to keep your Cap1 card in good standing with a very low balance, and keep increasing your credit line either with Cap1 or with another credit cards or loans and keep your balance as low as possible Keep in mind that I am not expert on the matter but these things have been working for me. Hope this helps! Keep reading threads on here there is ALOT of good information...READ READ READ.
A FICO score of 610 puts you in the poor to the low-end of the fair credit range. Once you drop below 600 you're in the bad credit realm. Depending upon how much you're financing for the auto loan, you can probably get approved with a score in the low 600s; however, your interest rate and terms won't be great. I would try to at least get above the 650 mark before moving forward. It's good that you still have the Cap One card and are managing it pretty well. You shouldn't be carrying any balance on that card though. Carrying the $50 balance doesn't do anything to help your credit scores, so you're just paying unnecessary interest each month. Start paying your balance in full and on time each month, and that will continue to help your scores immensely. Keep paying off the rest of those closed cards with balances too. They're hurting your credit utilization ratios as well, since closed accounts with balances are included in the calculation. Also, getting the judgment paid off is great, but don't expect it to really help your credit scores. Your reports will be updated to show a "paid" judgment, which potential lenders will look upon more favorably, but it's still a negative mark to the credit-scoring models. The good news is that over time the paid judgment will obviously have less and less of an effect on your credit scores until it eventually drops off. Finally, settling the charge off with LVNV will only improve your credit scores if you're able to negotiate complete removal from your credit reports in return for payment. Sometimes you can negotiate that, but it's not easy, and not every CA consider it. Still, it's always worth shooting for. How old is this debt and has LVNV or the law firm handling the debt ever contacted you about it?
Thank you very much for the repilies as they were very helpful. This is very wierd though. Today I walk in the house and I have mail from a law firm. They sent me a letter offering a settlement for $581 (pretty close to the original debt 4 years ago). The total balance shows $1761 right now. The law firm is named the Brachfield law group here in Pennsylvania. Here is my question. Do I contact them to try and obtain this deletion letter with the settlement payment. Do you think they would allow me to pay off the $581 over 3 months in exchange for the deletion letter? If they don't go for this does this hurt me by stirring things up with them and give them hope of me paying and they start harrassing me with calls, etc? Any additional advice would be gretly appreciated. Thanks again!
I wouldn't call them up. Rather, keep your communication in writing. What is this debt for? Is this the first time you've received communication from this CA? If so, send them a DV letter to protect your rights under the FDCPA and verify that they are actually the right party to pay. Once you're satisfied that they have properly validated the debt, then you can begin PFD negotiations and get a better feel for what they might be willing to agree to. They will likely require a lump sum payment if they're willing to consider a PFD.
Ok, I have drafted a letter requesting the removal from my credit report for payment for the old LVNV account that is now with a law firm. The account is 4 years old. If I get in writing that they will remove this is it possible that my score will jump up drastically. I signed up with Experian credit monitoring service and they have a tool that says if I go from 1 to 0 delinquent accounts (I only have 1 now showing as delinquent) they estimate my credit score will go from 610 to 663. Could this be possible? Any insight would be greatly appreciated. Thanks for your time.
If this is the only negative mark on your credit reports and you successfully remove it, then yes- it could significantly improve your FICO scores. Exactly how much is impossible to say, but I don't think 50 points sounds too crazy.
