Credit Repair yourself or with a credit repair company?

[janda]

Hi guys,

I am in some desperate need to fix my credit and not sure which way to go so really need some advice/help.

I got into credit troubles in college with credit cards, had my parents get me out of it - fully paid off everything and all the cards were in good standing and still had good credit. Well when I met my husband we got back into CC's again, buying things we shouldnt on credit, etc. So now we are both paying for it in our late 20s. We have gotten debt under control and almost fully paid off with the exception of my husbands vehicle payment (mine is paid off). So my question is how and what way is the quickest way to get my score up and repaired? We are at the point in our lives where we are wanting to buy a little bit bigger home, eventually will need another car, etc so we need our scores fixed! Any help would be great....

[J.A.]

How many credit cards do you have that are in good standing, what are the limits and balances on these cards?

[janda]

Only maybe 3 - 2 of those are store cards like Home Depot...the other is a credit card with a small limit. All of these only have a 300 limit.

[chane]

Do you have any negatives accounts on your credit report?

Generally store cards suck. Is it possibly for you to get a Visa or Mastercard?

[freems4]

Well; the first thing I would do is get rid off those store credit cards, 2nd thing I would do is pay your self first 10% out of each check, and put that into saving. This will help you save a little, and then set your goals to keep your payments on time. Create a budget to pay your bills and keep on that budget.

[Lian]

By all means, DON'T get rid of those store credit cards. Showing the effective use of revolving credit is a very significant factor in FICO scoring. Absence of revolving credit will be detrimental. You will also lose their CL, and thus have no basis for a % util calculation. Low CL cards can still help immensely, as a 10% util on a $500 credit card counts the same as a 10% util on a $5,000 CL card. Just keep them open, and keep their balances low.

As far as use of a credit repair organization goes, a lot depends upon your willingness to learn the ropes. You can, with the proper information, do everything they can do, and more. And you have most, if not all, of the information needed to take any corrective action, so in many cases, they are just a middle-man between you and the creditor. For example, a CRO is prohibited by statute from pursuing direct disputes of inaccuracies in your CR on your behalf, so they come to the game without the ability to dispute directly with any creditor or debt collector on your behalf. but half a loaf may be better than none. It depends....

[freems4]

I do see what you mean on showing the effective use of revolving credit in being a very significant factor in FICO scoring. But I don't see where the absence of revolving credit will be detrimental.

[Lian]

All credit files are not scored using the same FICO scoring algorithm.

You are first categorized into what is commonly referred to as a scoring "bucket," which places you into a scoring algorithm that compares you against those of similar general credit history.

Absence of revolving credit will place you into a "thin" scoring bucket, and impede your advances in score improvement. This is considered by FICO as a category that lacks the important score predictor of your proven use of discretionary credit. To get above 700 without demonstrating the effective use of revolving credit will be extremely difficult.

[JeffMC]

Originally Posted by janda

Hi guys,

I am in some desperate need to fix my credit and not sure which way to go so really need some advice/help.

I got into credit troubles in college with credit cards, had my parents get me out of it - fully paid off everything and all the cards were in good standing and still had good credit. Well when I met my husband we got back into CC's again, buying things we shouldnt on credit, etc. So now we are both paying for it in our late 20s. We have gotten debt under control and almost fully paid off with the exception of my husbands vehicle payment (mine is paid off). So my question is how and what way is the quickest way to get my score up and repaired? We are at the point in our lives where we are wanting to buy a little bit bigger home, eventually will need another car, etc so we need our scores fixed! Any help would be great....

Well if you are current in all your credit cards but have balance on them the first thing you should to is to keep paying the minimum at least on each of them and then have a plan of action about lowering the balances on each of them so the payments plus your other expenses are low enough that you can cover everything on your budget.

this is my opinion

remember that in order to get your scores high you have to maintain a balance of about 33% of the line of credit on your cards and you have to have a good history of payments on time, that will give you a better credit score.

if you want to get your score higher you will have to work on your items in your score that are late or you have not been paying for a long time.


Jeff

[Lian]

A 33% balance on your CLs is much too high.

It should ideally be under 10%, overall, with less than half of your accounts reporting a monthly balance, to get maximum score under revolving % util.