Beginning journey - Roadmap to 700+ Well I have been reading the boards, studying the FAQ and glossary and still need some help. I am a 110% guaranted newbie and could use some advice. I plan on purchasing a house within the next 2.5 years and am planning on getting married within the same time period. My overall goal is to simply clean up my report, acheive a higher score (700+) and be ready to purchase a home. Current Scores: TU: 606, EQ: 580, EXP: 592 Below you will see an overview of my EQ file which was pulled recently. I could use some expert advice on where to start. Below the file overview you will see soem key items that I would like to accomplish. Any help would be wonderful!! Personal Information 1) They have me listed as a Jr. but I am not a Jr. CA Information: 1) Risk Management Alternatives, Reported 12/2003, Client MCI Telecommunications, Amount $83 2) LA Chapelle Credit Services, Reported 11/2002, Client Door Cty Emergency, Amount $64 3) I.C. Systems, Assigned 2/2003, Client Primus Telecommunications, Amount $62 4) Asset Acceptance LLC, Assigned 04/2001, Client SBC Telecommunications, Amount $129 Credit Account Information 1) Student Loan, Amount $10,700, Paid As Agreed 2) American Express, High Credit $1,661, Bal $1,300, Shows No Credit Limit, Closed by Credit Grantor 3) American Express, High Credit $0, Balance $0, Pays as Agreed, Closed by Consumer 4) Capital One, High Credit $500, Balance $0, Shows No Credit Limit 5) Capital One, High Credit $0, Balance $0, Pays as Agreed, Closed by Consumer 6) Citibank, High Credit $1,000, Balance $0, Shows No Credit Limit, Closed by Consumer 7) Citibank, High Credit $850, Balance $0, Shows No Credit Limit, Closed by Consumer 8) Discover Card, High Credit $1369, Balance $553, Limit $1,250, Pays as Agreed, LATE: 30 Days on 6/2001, 1/2002, 1/2003 9) Discover Card, Lost or Stolen 10) Household, High Credit $423, Balance $0, Limit $500, Pays as Agreed, LATE: 30 Days 1/2003 11) Best Buy, High Credit $1,571, Balance $0, Closed by Credit Grantor, LATE: 30 Days 1/2002 12) J Crew, High Credit $225, Balance $0, LATE: 30 Days 4/2001, 60 Days 5/2001, 90 Days 6/2001, 120 Days, 7/2001 8/2001 9/2001 10/2001 11/2001 12/2001, 30 Days 3/2002, 60 Days 4/2002, Settlement Accepted on this account 13) Marshall Fields, High Credit $200, Balance $0, Limit not Shown, Pays as Agreed 14) Nextcard, High Credit $1,000, Balance $0, Paid As Agreed, Closed by Consumer 15) Retailer National Bank, High Credit $194, Balance $0, Transfer or Sold (Marshall Fields Bought by May Corp became item #13 on this list) 16) Student Loan, Amount $6376, Pays as Agreed 17) US Bank, High Credit $1,107, Balance $0, Limit $900, Pays As Agreed, LATE: 30 Days 05/2001, 60 Days 06/2001, 90 Days 07/2001, 120 Days 08/2001 09/2001, 30 Days 12/2001, 60 Days 01/2002 18) VW Lease, High Credit $15,613, Balance $14,637, Joint Account, Pays As Agreed 19) Zales, High Credit $0, Balance $0, Limit $1,300, Pays As Agreed Inquires 09/2004, 07/2004, 07/2004, 07/2004, 05/2004, 04/2004, 02/2004, 01/2004, 10/2003 Addresses 9 addresses not mine or incorrect and 8 addresses legit My financial outlook is not bad at all. I am making about $43k one year out of college maxing out my 401K at 8% and maxing out my annual Roth IRA limit. Basically I think I have a number of things to do. First I would like to start off by wiping out the 4 collections on my file. All four are extremely small and I could write a check for them tomorrow. Is it best to go after getting them deleted with payment or should I validate all the debts and work from there? In addition I have one credit account that was closed with a settlement however I do not remember this settlement by any means. I would like to get this cleared up. I also have two accounts that were closed by credit grantor. Is there anything I can do about this or does it not affect my score. Lastly, I have 5 cards that are showing that I have late terms 30 days or more. 3 of those account never went past 30 days and I think a goodwill letter will suffice. The remaining 2 accounts went past 120 days which I believe will be hard to get down. What are your experts thoughts on a roadmap that I should use to succeed in hitting 700!?
Beginning journey - Roadmap to 700+ What is your corresponding FICO score? Within what timeframe do you want to get into the 700s?
Beginning journey - Roadmap to 700+ I just pulled my scores and here they are: TU:606 EQ:580 EXP:592 I would like to reach 700+ in 2 to 2-1/2 years.
Beginning journey - Roadmap to 700+ To me, it looks as though your credit history has stopped with all the closed accounts and just a few opened. In my own opinion, I would take care of the ones that you are able to write a check for and open up a couple of secured credit cards with companies that will report to ALL major bureaus. You should get to 700 within 1.5-2 years to get you and your bride into a home. A score of 640 will get you about the same rate as a 700 score.
Re: Beginning journey - Roadmap to 700+ One other note I should add about my accounts is that all of my debt except for the car and one student loan ($6K) will be completely paid off in January 2006. So a few secured credit cards (3 of them??) and I should be 700+. What about the collections against me? What are your thoughts about paying collections off for deletion? I just don't want to fight with them since i value my time more than the $200-$250 I acutally owe in total! One more question. I was not aware that closed accounts make that big of a difference. What is the idea behind that?
Re: Beginning journey - Roadmap to 700+ Closed revolving accounts decrease your FICO scores because FICO figures your ratio of debt to available credit as one factor. Closing the account reduces the available credit without changing the total remaining debt. To some degree, lenders figure: "If someone else will give you credit, I guess I can too." Or: "No one is giving you more credit, why should I? They must know something." Herd mentality, but herds do improve survival. In the same sense, FICO calculates that you look like some subpopulation of borrowers, that have some likelyhood of defaulting, based only on what is visible in your credit reports, without a full set of audited financial statements. Maximizing return from lending while minimizing risk are optimized statistically across large numbers of borrowers.
Re: Beginning journey - Roadmap to 700+ One other note I should add about my accounts is that all of my debt except for the car and one student loan ($6K) will be completely paid off in January 2006. So a few secured credit cards (3 of them??) and I should be 700+. What about the collections against me? What are your thoughts about paying collections off for deletion? I just don't want to fight with them since i value my time more than the $200-$250 I acutally owe in total! One more question. I was not aware that closed accounts make that big of a difference. What is the idea behind that? That will be great for your car and your student loans. But also for these to be paid, again you will have a credit history with nothing more to rate except for the collections account. The collections accounts get them paid but negotiate to have it listed on your reprt as "paid" nothing less. I am suggesting that you do this because you seem to have the conscience to pay it and this may work for you when negotiating the reporting of your credit report. Even if they wont listed it as "paid" (which they would be willing to) its better to have a collections account resolved then still lingering and then all of a sudden have it reported as charged off.
Re: Re: Beginning journey - Roadmap to 700+ It's not really that I have the conscience to pay it more than the fact that it truly is not worth my time to fight it for about $250 bucks. SO I should pay them if I get it in writing that they will mark it as "paid". What about trying to get them to say in writing they will "delete" the collection marks altogether as long as I pay it in full? One other great note is that I applied for yesterday and received a unsecured credit card through Orchard Bank $300 limit. My final question is why did you tell me to get secured credit cards vs. unsecured credit cards? Loanchick thanks for all the info so far.
Re: Re: Beginning journey - Roadmap to 700+ Again if you can get them to delete the account (which they probably wont) you would have another account that has no history to report. The reason I suggested that you get a secured credit card is because I was not sure that you would have gotten or "granted" an unsecured credit card. With unsecured credit cards you are able to build a credit history just like a secured credit card and its easier to obtain an unsecured. Orchard is a card that will report to all three bureaus. If yo decide to get anymore, ask the creditors of the unsecured card: what credit bureaus do they report to"? The more they report to the better it is for you.
Re: Re: Beginning journey - Roadmap to 700+ "To some degree, lenders figure: "If someone else will give you credit, I guess I can too." Or: "No one is giving you more credit, why should I? They must know something." Herd mentality, but herds do improve survival." "A score of 640 will get you about the same rate as a 700 score." This has been PRECISELY my experience one year post BK discharge. In fact, on my home refi, I was listening in while my CU loan officer was discussing my file with her supervisor......"Yes, all those things have occurred since then (the BK discharge)" Low doc, no closing cost Loan approved in 5 seconds flat. Very very nice refi loan approved with fresh BK and 666 experian score. I could easily hit 700 and the loan rate would remain the same, because of the recent BK. They were far more interested in my fantastic debt to income ratio, which is not reflected in the FICO score, and which is partially a direct result of the BK!
