Re-building Credit?

Actually I have 2 questions… First, how do I figure out what my composite FICO score is if I have reports from all 3 agencies? (I actually only have two of them, since there was some kind of error retrieving my TransUnion report for some reason)

Anyway, one is 550 and the other is 613. I have one credit card that was not paid for about 6 months, which I just paid off in full last weekend. The only other negative I have is a charge off from Capital One from an account that I haven’t used in 6+ years. I believed that I paid off that card in full, but apparently they hit me with a late charge before that payment arrived so there was still a small balance left on the card. I moved and never used the card again or got any coorespondence from them so I assumed that it was all good, unfortunately that wasn’t the case and it looks like it finally got charged off and sent to a debt collection agency for $715. Now, I haven’t had any contact with them for 6 years but if I look at the report it shows 3 months of this year as “ok/unknown” then it goes back to “charge off/collection”. I have no idea why there is this 3 month gap.

Anyway, those are the only negative things I have. I have paid off the one and am not sure what to do about the other. I am trying to get my financial house in order so that I can become a successful investor. What can I do to help build this score? How long does it take to change? I had my mother add me as an authorized user to her chase account a few months ago and I’ve heard a little talk about buying CDs to secure loans, but I’m still a little hazy about that process. Are there any “break-points” where say, getting a loan over XXXX amount will build credit faster? I’m assuming that more is better, but is it better to have 3 loans for smaller amounts, or one big one at a time?

Any other suggestions you can offer would be greatly appreciated.

Your “mid” score ,which is used by lenders, is to take off high and low and one that is left is “mid”

Credit scores are based on “history”. What your ability to pay has been over a specified period. Having your Mom put you on as a cosign was a great move, as long as she pays on time. You now acquire her history. As far as you building up your own…I am assuming that you closed the accounts when you paid them off.

If this is in fact the case then you need to reopen some to start building positive again.

I have not yet closed the one I just paid off - I wasn’t sure if it was better to leave it open or to get a new account.

If it has been open for a while…leave it open.

Good example of why you should pull your free credit reports every year to keep track of what’s on there, the 6 yr charge-off could have been avoided or remedied 5+ yrs ago.

Use this site to get your free credit reports every year:

Yeah… I think they have some kind of saying about hindsight. :wink: Anyway, I’d like to blame it on being young and stupid, but really it was just pure irresponsibility. I’m just now starting to realize all the things I took for granted and am trying to get on the straight and narrow.

Someone sent me an advertisement for their website about something like section 609 or whatever and said that they could get that chargeoff removed, but I’m a little skeptical. I’m pretty sure I’ve heard that credit repair companies are all scams, but I’m perfectly willing to admit that I have no idea about their validity.

not all credit repair companies are scams. But a lot of them are. You can get that old account removed just as easily as they can, and probably faster too. It just takes dedication and hard work, but eventually the credit company and reporting agency will get it worked out. Good luck, credit is what makes the investing world turn :slight_smile:

Here’s that address they sent me:

I like how the terms say that it’s all things I could do myself, but that they will save me the hassle. Unfortunately the website leaves a bit to be desired so I’m not sure if they’re reupatble.

i wouldn’t worry about the website as long as they get the job done promptly and legally. Here is a good looking website however. Maybe you will like them better.

Just be careful of companies that claim to remove accurate information, bankruptcies, or claim to give you a totally new credit file (known as file segragation).

These are all illegal, and there are NOT any loopholes, though some may claim there are.

You can do anything that a credit repair company can do on your own. It just takes time and effort.

Good luck…you will get there!

Well… I tried doing the CD/secured loan thing, but the loan was denied… which I thought was pretty ironic, since they basically wouldn’t let me borrow my own money. I think the official reason was that the CD wasn’t open for long enough - do you guys know how long it’s supposed to be open before I can use it as collateral for a loan?

Have you tried a secured credit card?

A revolving account (credit card) has a more positive effect on credit scores than an installment loan (as long as the balance is less than 30% of the credit limit and is paid on time).

Be sure to find one that has guaranteed approval (National City does)., and that will convert to an UNsecured card within a year or so (at which point you’ll get your deposit back) National City’s secured card does this as well.

Yeah, I just got a secured card from Bank of America.

how many revolving accounts do you have now in total?

3 - two secured cards and my mom listed me as an authorized user for her Chase card.

That’s a great balance!

Now, on to the issue with the old credit card chargeoff.

What state do you live in? The debt may be past the Statute of Limitations for your state (it’s 5 years in KY), and they CAN NOT make ANY collection attempts, including putting anything on your credit report.

If it is past the SOL, you can most likely get it removed completely from the credit report.

I’m in AZ, but the account was from when I lived in Missouri.

The SOL for Missouri is 5 years ;D

So you need to send a cease and desist letter to the collection agency stating the debt is past the SOL and is therefore not collectible. They have to stop all efforts, including reporting to the credit bureaus.

My 2 Cents…on the card that is 6+ yr old that should be off your credit or going off shortly, if you pay it off now it will become active again and do MAJOR damage to your credit…sweat it out for a little longer…send the letter as was previously mentioned…but DON"T PAY OR MAKE ARRANGEMENTS TO PAY!!!

Try your question on this site, there are a ton of people that have great ideas for removing negatives on credit reports: