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Credit Building Guidance
Looking to buy a home in 12-18 months (was turned down this month for credit purposes). SOOOOO in doing some research (I mean A LOT OF research), i foudn out why my FICO score has been where it is. I am currently ranging from a 550-600 based on the BIG 3 bureaus.

Derogatory Questions:
1. I have 10 derogatory accounts that are paid off and say they will quit reporting by March '14 (according to transunion report and they have FINALLY run their course). This should pull my score up?
2. I have one derogatory account that is for a balance of aroudn $3,272 for an apartment from like five years ago that Transunion says will quit reporting next year but is newer than the ones mentioned above. Shoudl I pay this? I don't know if this is my best bet since it will put active history and there hasn't been in the last few years.
3. I just recently paid a $69 and $65 collection account that were about one year old. Unbeknowst to me, this was a bad move since it put history. Any advice as to how to get these removed. I talked to one of the credit agencies and they said it is against company policy to remove. Had I known, I would hve never paid and let them run their course.
Building Credit Questions
4. Currently, I have one auto loan that has been paid down from $28K to $13K with only 8 30 day late over three year period. I was going to talk to my bank to see if they would remove those derogatory marks out of Goodwill but this should help with my line of credit, correct?
5. I have a student loan of $13K that has been in deferral mode for a few years. I start paying on this on 4/15 so this should help increase the score?
6.. I just received an unsecured Capital One Platinum with $500 limit. My plan is to charge electricty, water, and maybe a gas expense or two (keeping charges around $150-250/mth) but paying it 100% before due date to avoid interst. Do you recommend I pay ENTIRE balance every month or leave like $5? I want to show utilization as well history but want to avoid astronomical interest if possible. A
7. I am in the process of applying for shared loan through my bank. This means I borrow $4,500 from my checking and then pay myself back every month once I make payments (minus interest...of only 4.5% as well :) ). If I am wanting to purchase a home in 12-18 mths, and I pay this over a 24 month period (maybe paying a little extra a few months before mortgaeg lenders pull info to reflect lower balance), this should be build credit too, right?
8. I am also going to secure a secured VISA and put $1,500 deposit so that i cna utilizes this over a 12 month period. You recieve your deposit back after 12 months. My goal is to charge $500/mth to this for my car payment while paying this back 100% every month (minus maybe leaving a $5 balance to show utilization?). This is going to be too much after 12 months to show history to a lender, correct? My concern is that I am opening these three new lines of credit (item 6,7,8 above) and it is TOO Much TOO soon. But I am utilizing them all for strategic reasons so I don't see why starting on history on them now wouldn't be beneficial. Any thought?
9. Lastly, this is my BIG question. I have a Capital One MC that was opened back in 01. It hasn't had history on it since '08 when it was suspened without spending priveleges. I talked to Capital One and they basically said that they were giving me the courtesty of cancelling it myself since it looks worse if the creditor cancelled. Basically it is still showing as open line of credit but inactive on my credit reports. A. Should I cancel this so that it doesn't show non utilization on this line of credit but I miss out on the longevity of the account? Also, this would be recent activity on the account so it may hurt? B. Do I keep it looking like it is open since it does show age and will go in to positive status in '15?

OK. I think that is it for now. I am hoping to hear back on any and all of these questions above. Could really use some help?

Lastly, I promise, is there good simulators out there that could give me an idea of point increase over a certain period. Also, is there a good monitoring sytsem where I can periodicaly view my three bureaus scores as well as activity over time that doesn't cost $18 or more a month?

Thanks again!

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Credit Building Guidance

Hello! Well, this is the longest question that I have had the pleasure of reading on CreditKarma :)
I will do my best to help you.

Derogatory Questions

1. When your 10 derogatory accounts fall off in '14, this will help your credit to start improving. It may improve your score immediately, but not significantly for awhile.

2. Assuming your bad account for $3,272 drops off next year, I would not pay it. Once you begin to pay that account, they can report that account as 'new' again. Then it will hurt you for another few years. Let go unpaid and fall off.

3.Getting your 'newly paid-off' collections removed is tough, if not almost impossible. The best attempt that I can advise is write letters EVERY SINGLE WEEK and mail them to that company. Sooner or later they may get sick of receiving these letters and clear it for you. It could take months of sending letters.

Building Credit Questions

4. If your bank can remove those 8 late payments on your report, awesome! Otherwise, that will be there for the next 4-7 years on your report. I'm not clear on what you are asking about as it "..should help with my line of credit.."

5. Your student loans will only help your score once you start paying them down. Right now, even in deferral mode, you are accumulating interest on the loans in which that means you are accumulating more debt without doing anything. Not good for your credit.

6. The unsecured credit card is good for building credit history and showing responsibility, but keep your credit utilization under 30% of total credit available. (i.e.: if you have $1000 total credit over one or more credit cards, don't charge more than $300) And, yes pay it off (all the way to $0) every month. Don't pay the credit card companies a penny in interest charges, even for $5. What a lot of consumers don't know is that credit card companies get paid "interchange fees" from the merchants every time someone swipes their credit card with that merchant. The CC companies make anywhere from 1-3% of the total sale as 'commission' in interchange fees. So, no point in letting them get paid twice! Even having a 0% utilization is great for your credit. It shows that you can manage those accounts well.

7. The only thing I can recommend with this shared loan is to pay it off before doing anything towards getting a home. You will need a credit score much higher than you have to qualify for a mortgage. And by paying if off, you will build your credit faster.

8. Adding another credit card (secured or unsecured) will help increase your total credit availability. But, yes, opening new lines of credit often makes you look like (to a lender) that you are desperate for money that you don't have and they may be weary that you won't be able to pay it back. I understand there is strategy behind this, but just make sure you NEVER miss another payment. That is the BIGGEST factor in weighting your credit score. Be patient. It will take you a couple years, minimum to fix this with all that activity you have going on with your credit. Oh, and don't charge $500 on a $1500 limit. That's 33%. You want to stay below 30% and pay it off every month.

9. That Capitol One MC account will stay on your report for the 10 years, as it is now, if it is a 'closed account.' It should say on your report(s). It is also a bad account because it should say that it was 'suspended.' If not, and there no late payments on the record, then it will be fine. No need to cancel it. Keeping it will help you in having a longer average credit history.

P.S. In my opinion, the best monitoring system for your credit is yourself. With a little education, it's not difficult to manage your credit. I learned a LOT from

I hope this all helps.

Good Luck!

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