178 People Helped
Member Since: January 2015
If you want a car costing 14K, then it must be a compact or some other very reasonably priced auto. I know you want to improve your credit, but I would try to find other ways such as a much smaller consumer loan for something you need.
If you search around carefully, you can outright buy a pretty decent used auto for five grand. Keep it a couple of years and work on your credit in less costly ways.
FirmAndSteady's response was:
I applied three months ago with 769 credit score, and was instantly approved. I called for the CL figure and found that it had been emailed, and entire card package was already processed for mailing. The initial limit was 8.6K. I'm happy with that figure, plus it's good for the debt to limits ratio. I mainly wanted to transfer some higher interest funds to this card because its a lot more fun paying off a zero balance loan and saving some money in the process. It has the 5% rolling quarterly rewards which I have already taken advantage of. Plus Discover is now accepted by almost as many merchants as Visa and Mastercard. Good card to have in the wallet!
I applied with a 769 credit score, and was approved instantly. The credit limit was 4K with 15 months zero interest and pretty good rewards. Groceries are 3%, gas 2%, and most other items are 1%. I'll wait for a year and see if I still want to use it with rates into the mid-teens. For now it's a great card to have in the wallet. The only drawback is that every merchant does not accept it.
I did get to $1000.00 spent in two months and received a $100.00 rebate with my next statement, which was only two days later. I'm going to use it. I'm satisfied with it!
Using Credit Karma advice is a good start. But check other sources also. You need as much proper guidance as possible. If you currently have a local bank, talk to a loan officer, tell them your situation, and be honest with them. They may suggest a secured credit card as a first route to go. Many people have had good luck improving their credit this way, then cautiously moving on to a modest standard credit card.
Whatever you, don't apply too often because that's causing hard hits to your credit and making matters worse. Be patient...it takes time. Good luck!
Even if you pay the collections they more than likely will remain in the "removed" portion of your credit report. That does not carry near the weight of open or unpaid collections. If you wish to pay any of them, or it would make you sleep better at night, make sure you get something in writing from the creditor BEFORE you pay and also demand that the creditor ask for them to be removed from your credit reports. It may or may not work, but certainly won't hurt to try.
FirmAndSteady's reply was:
FICO scoring secrets?
This information is taken from a discussion I came across, but had never seen before. It displays how the maximum 500 points on credit scoring are reached, above the 350 points everyone gets to start with. However, hardly anyone with ever reach the full 850 FICO scoring! This is an "eye-opener".
I had a chance to spend some time and chat with a Fair Issac IT employee at a recent trade show, and of course I brought up the subject of the FICO scores and their secrecy.
He did admit that the official scoring IS secret, but is not that complicated to figure out given "everything that is disclosed publicly". The way scores are calculated are due to "weighting" - so if someone has some math backgound, this sounds familiar.
First of all he says, scores are only within a specific range (I think I read 350 to 850 or something like that...that is there is no 'zero' score nor is there a 999 score) the actual range is 100% so 850-350=500 represents 100% every percentage counts as 5 points in that category....). It is apparently therectically impossible to score the lowest or the highest (like reaching infinity).
Now the 500 points (or 100%) is distributed as follows:
You start at 350 points - everyone gets that
35% (or 175 points) is 'payment history'
30% (or 150 points) is 'amounts owed'
15% (or 75 points) is 'length of credit history'
10% (or 50 points) is 'new credit'
10% (or 50 points) is 'types of credit'
100% or 500 points
Each category is calculated in its own way due to the nature of what it contains, for instance 'new credit' simply reduces scoring the more numbers (ie: inquiries) are put in there whereas 'payment history is the most complex requiring calculating number of accounts, average days due, length of account, etc)
Certain categories start out in the middle and + or - depending (like payment history) and some start out at max and go down as the numbers increase.
For instance, in the 'new credit' (which is the simplest apparently), you start with 50 points and it goes down by 10 every time you have a new credit app within the past 6 months. That number changes to 5 as the 3 months moves to 6 months and goes down to zero after a year. For instance you applied for a card this month, you lose 10 points. Apply for another, bang, another 10 points. You are down 20 points. As you pass the 3 months mark without applying for any new credit, the 20 becomes 10 - therefore you simply "gain" 10 points as time goes on. At the 6 month mark, you gain another 5 (as long as no new credit is applied for) and then another 5 at the one year mark. Now it sounds like you are GAINING points - but actually you are only winning them BACK from being lost.
Types of credit category: you start with 0. Now this is a 'portfolio' category. The 50 points "basket" is evaluated on the type of credit you have. Installment loans, or credit margins give you the MAX - they are harder to get and have a fixed monthy payment. 'Good credit' users have a healthy mix - like 2 installment loans and 2 credit cards and no finance loans. You get points mainly for a healthy mix - not just a number of credit cards. The numbers are something like 20 for Installment, margins, and car loans and 10 for credit cards up to 4, then you lose points (on CC's only). You lose points by having finance company loans (since their interest rates are highers and they are lenders of last resort and frequently loans are 'secured' by home equity or a co-signer). The stronger your basket is, the higher your number goes - up to a max of 50 points of course.
Amounts owed category is "weighted". Basically it is credit used divided by credit available. The used divided by available factor is inversely scored. Mortgages do not count here. For instance, having $20,000 of credit and carrying all $20,000 will give you very low points - maybe 10 points only out of 150 possible. But carrying a balance of 0 on $20000 available will score you close to 150 points! That means that although you have high credit limits, you don’t need or use that credit - a good risk and indication of good money management. Maxing out all credit limits (ie $20,000 owing on $20,000) will give you very few points - not 0 but something like 10.
However the higher the AVAILABLE credit number will give you more points. In other words 0/$500 does not carry the same as 0/$8000. And I was told that THIS category has the most significant impact. Keeping your balances low or nil will yield you close to 150 points regardless of any time element involved. Find out when credit cards post their outstanding balances (usually it is your statement date but may be different) and make sure you can get your balance paid off by that date - and then watch your score shoot up.
Length of credit history (75 points) is some convoluded formula that adds more points the longer you have credit history reporting for you. Basically it is 0 points when you start and maxes out at 75 if you have something like 40 years - which for most is around 58 years old !!! The MORE older accounts you have the better, and accelerates the score. Apparently they use points for months time accounts (ie 2 accounts x 200 months plus 2 accounts x 10 months plus 1 account x 5 months would give 425 month-accounts over a number like 800 = 54% and therefore give you 40 points out of 75 which is the percentage.
Payment History is a whopping 175 points and is the most complex. Late payments are killers here apparently. One late payment on an installment loan can wipe away 5 years of good payments. 60 days and 90 days erode your score in this category faster than water on your sandcastles. Collections are like grenades. And there is no easy fix except time and consistent good payments. The max is around 175 if all your accounts in the past 6-7 years are paid on time. ALL of them. Late payments are weighted (mean more) if they are more recent....and tend to be less destructive as they appear in the past. They "weight" these by looking at each account, seeing the reporting per month and seeing if each month was on time, 30 days late, 60, etc. They are not kidding when they say "pay your accounts on time". At least the minimums. Paying more than minimum does not count here (THAT will come up in the extended credit section if your balances are too high). They only want to see your payment history. Apparently there is no leeway or tolerance in this section. This tells them (creditors) how serious you are in paying your bills.
So out of the 5 sections, each one calculated on their own merits, they add up the results and come up with your credit score. 350 + (165 + 110 + 67 + 40 + 40) = 772
So I did not walk away with the formula for Coke ...but I did get a general idea about how it all works.
Balances are definitely reported. Whatever your due date is, the balance will be reported a few days afterwards. If you pay at least your amount due by the due date, you will be safe for the reporting or "Statement Date" That is the the one reported to the bureaus.
Here are some examples: Capital One reports about THREE days after due date. Chase reports about THREE days after due date. American Express reports about SIX days after due date. Discover reports about FIVE days after the due date. The others are very similiarly reported. So, to be on the safe side, figure that the balance you will be carrying after your "due Date" will be the one reported to the credit bureaus.
Good advice above. If you have a total of three cards; one with 0%, one with 35%, and the newer card with 82%, look at total utilization like this. Say your 0% card has 0.0 balance with a 3,500 limit, the 35% card also has a limit of 3,500, and the 82% card has a 5,000 dollar limit. These are just examples to explain what happens to utilization figures with new cards and manipulation by shifting balances around.
This figures out at this point to: zero balance for the first card, 1,225 dollars for the second card, and 4,100 dollars for the third card. Your total balance at this time is 5,325 dollars for all three credit cards. Since you have a total amount of credit limit equaling 12,000 dollars, that figures out to roughly 44.4% utilization rate for all three cards.
I would not recommend jumping to another card too quickly at this point, because it causes too many "hard hits" to your credit score, and makes one look desperate to find new credit just to lower another card or other debt. The three credit bureaus look at it that way, and it will only cause a dramatic drop in your scoring at this time. Hopefully, the third card you used to pay on the other two has zero interest for 12-15 months. Regardless, consider paying the 82% card down quickly, while paying steadily on the 35% card. Do this for several months to a year, while patiently getting your total utilization down under 30%, and preferrably closer to 10%.
This technique will cause your score to rise continuously, getting you where you would like to be. Don't rush the next card application too quickly, and you'll probably be surprised with some low or zero interest card offer in the near future. I raised my credit score 204 points in less than nine months, but I would not necessarily recommend that procedure to everyone trying to move your score up quickly. Look under my blogs here to see what I did to accomplish this.
If you have not entered into any agreement to pay, not promised to pay them, or .not paid anything on the account, it will become uncollectible after five years in most states. After 7 years it should also disappear from your credit reports. If they keep pestering you tell them your attorney is about to file a huge lawsuit for harressment. That might just work.
I wanted to "upgrade" my Capitalone Platinum card to this one for the few rewards it offers. I had a 769 credit score several months ago, and decided to update things a bit. I called and was almost intantly approved for the Quicksilver card with a few points shaved off my old interest rate. It has a 4.5K CL. It's not spectacular, but it does have 1.5% rewards on almost everything. It normally takes good to excellent credit to get this card. It's handy to have available in the wallet.