how much impact recent actions I've taken will have (in a positive way) on my credit report. I have really poor credit. In June of 2001 I was able to get financing for a new car through Americredit. The car is a 2001 Nissan Sentra. Within a couple of months, I found myself falling behind because of unexpected medical bills. Americredit was pretty good though and kept working with me. About a month ago--I paid off the car!!! I had a balance in excess of $14,000. I was able to pay it because I used some of the money from a settlement. My question is this--I want to buy a house next year. I'm considering hiring Lexington to work on my credit but in the mean time am wondering how much paying off the car will help my credit score? I want to have things half way decent by the beginning of the year--even if I can't get the best interest rate--I want to get a halfway decent one. Any thoughts???
Personally, I would do it myself and save the money for more important stuff - like BEER! That said, there is more than enough info and expertise here for you to do it yourself. Why pay someone else? I got my reports in April 2002 and, after clearing up the erroneous personal info, I started the dispute/validation process. My progress to date: EQ Start - 7 Public, 6 Collections and 1 CO. EQ Now - 5 Public, 2 Collections and 1 CO. EX Start - 6 Public, 8 Collections. EX Now - 4 Public, 1 Collection. TU Start - 6 Public, 10 Collections and 1 CO. TU Now - 3 Public, 2 Collections and 1 CO. Public records are a B**** to get off. The BBB is a great resource. Chargeoffs/Profit & Loss are also tough, but I'm working on it. Unless you're going for a mortgage that is FICO-driven, work on getting the derogs removed and building some positive tradelines and the rest will take care of itself. PS Once you get going, a good monitoring service such as CW or CE is a must since things have a way of reappearing on your reports. So, don't use all the money on beer.
Lexington cannot do it better than you can. They only send dispute after dispute hoping that the tradelines are deleted. They do not send CRRR and they are slow to follow up on questions or issues. In fact, TU is watching them and sending people "frivolous dispute"/"credit repair firm" return letters and refusing to verify. Lexington does NOT negotiate for you nor do they practice all the tricks of the trade you can learn here. If you want anything more than boilerplate disputes which may not be accurate, it costs you more $. I used them at one time. They did have a bit of luck on the first round, but in the process, they got a couple of my positive tradelines deleted too. I'd say do it yourself. I used them because I didn't have the time to follow up on the process....or so I thought. It took me much more time and effort to "hand hold" Lexington than it did to do it myself, and I have had much more luck since. As far as the car loan, paying it off doesn't "improve" your FICO as much as one would like. In most cases, it looks better to have an open account than a paid one. This is true as long as your credit to debt and debt to income ratio look ok with an outstanding balance. If you want to buy a car, you might consider working on your other derogs and at the same time, try to get a secured installment loan and make payments on it in the mean time. Perhaps you could do this at a credit union. Many times, if you have an account with a credit union, they are more lenient on credit scores and are more likely to have an underwriter actually go over your report line for line.
