Hello all, I've been lurking for a while and enjoying all the wonderful information to be found here. I was hoping that some of the experienced folk could give me a bit of advice on next steps I might take. For background, last year I was able to settle all of my credit card debt (used a wonderful coaching service that was recommended here, and got great settlement rates). Long story short, I now have no credit card debt, and still have one unsecured credit card with an unused $1,000 credit line. I also have a car loan and four mortgages (for rental properties and my main home), all of which have been paid current for the last year+. I have about 20 derogatory entries on my credit report (across the three bureaus) all due to the debt settlements (with the final one settling in Aug-2011), my FICO is 613, and the CRA scores range from about 590 to 650. I've never BK'ed, and in 2010 I did some mortgage modifications so my scores were already pretty poor when I started the settlements in early 2011. My goal now is to try to get my scores back above 700 and eventually 800. My questions are: (1) Given the above existing mortgages, car loan, and credit card, does it make sense to try to add any additional credit cards at this point? (2) Though I did the debt settlement myself (with the help of the coach), I'm not sure that I want to attempt the credit repair myself. I don't have as much time these days, and the cost of the services out there seem pretty reasonable. Are there any good arguments for DIY vs. paying someone to doo it? (3) Any guesses on how long it will take me to get my FICO back above 700? Thanks in advance for any suggestions.
Welcome to the forum! 1)I would work towards applying for a regular credit card instead of just keeping your secure card. I am sure that your credit card has a smaller credit limit which make it difficult to keep your utilization low. Keep using the secured card responsibly a apply for a credit card with a higher credit limit and close the secured card. 2)There is nothing wrong with paying someone to clean up your credit. Just be careful about signing up with a company that charges a monthly fee. They might take longer just so you pay a few more months of their monthly fee. 3)There is really no set answer for how long will it take for your credit score to be back at 700. There are so many different factors involved. Just keep paying your bills on time and keep your utilization low on your credit card and work on removing the negative items off your credit yourself or hire a credit repair company. It might come faster then you think. Thanks! Heather with BoostMyScore.NET
Just a little feedback on time to DIY. With a total of 20 derogatory tradelines, it may not take as much time as you think to DIY. You draft one letter for each of the DFs to dispute the incomplete, inaccurate, or unverifiable information that they are reporting; send it on one day CMRRR. Wait about 2 days, and send each of the CRAs a dispute of the same information for all of the tradelines that are being reported to them. It may take about an hour to draft the main letter, and about another hour to customize it for the individual recipients, and data that they are reporting. Then it's just a matter of waiting the 30 days to see the results of the first-round of disputes. Most of the time though you aren't actively doing anything but waiting for the process to complete.
You've got plenty of credit for the time being. Once you get your FICO scores back above 650, then I would add an additional unsecured credit card to your mix. In addition, I always recommend taking the DIY route. If you stay organized, it won't take up as much time as you think it will, and I just think it's better to have complete control over the process. I am curious about why you were looking at this whole journey in two completely separate phases though. The best time to repair your credit reports and negotiate your credit scores is often when you're in the process of settling your debt. And finally, like Heather mentioned, guessing when your FICO scores will jump back above 700 is basically impossible given how many variables are at play. If you're still in the low 600s, I would say you're going to need at least a year based upon the information you've given us.
Thanks everyone for the tips! Joshua, on your question for why I did the settlement separate from the credit repair ... I was originally hoping to negotiate with the OCs on removing (or at least not adding) any derogs on my credit report as part of the settlement, but not a one was willing to. So I focused on getting as low a settlement as I could. I ended up getting under 30% on average, so I was pretty happy.
