March 1, 2012 at 2:45 am #1968
Back when…never thought about credit. I was making it in the military, must have had some decent credit, didn’t really care about it, it was always there.
I got out in 2004, got a job, and then started on the credit path of destruction.
Moved into my new place, and evicted out.
I needed a new start, I started school, ended not so great. Eventually at the begining of 2010 I had to stop, and fix everything I destroyed.
And this is what I had to do.
April, 2010, credit score est. 400
no active accounts
about 7 collection accounts
May, 2010, credit score est. no improvement
no active accounts
cleaned up 1 medical, and disputed two accounts, which were deleted from my file.
no active accounts
disputed two more accounts, not so great, had to pay for delete on both, but settled for next to nothing.
got two more accounts settled. It felt better for me to pay, and ask for a deletion, I could have waited a year or so for it to come off, but I wanted it off my file asap.
September, 2010, credit score est. 500 to 550.
On last account that I paid but would not delete, it will be with me til 2016.
So now with a limited credit history I needed to start with the rebuilding part. Of course, with poor to limited credit I was not getting approved for anything, so my only option was the Capital One secured card.
applied for a secured credit card with Cap One. Was approved with 200 deposit, deposited my $200 with an extra $100. credit limit was $300.
February, 2011, credit score est. 580
1 revolving account, pays as agrees.
decided if I should make another deposit, or get a loan. I took part of my tax refund and put it into a savings account and applied for a secured loan with the $500 in savings. I was approved, made all my payments so now…
March, 2011, credit score est. 580
1 revolving account, pays as agrees.
1 installment account, pays as agreed.
May, 2011, credit score est. 560(loan)
1 revolving account, paa
1 installment account, paa
June, 2011, credit score est. 619
called Cap One, asked for a credit limit increase, was approved for $100, also deposited another $100 to increase my limit to $500.
September 2011, credit score est. 600, I’m guessing paying off my loan dropped my score.
every thing is going good, paid off my secured installment loan with my credit union.
1 rev accnt, paa
1 inst accnt, paid in full
October, 2011, credit score est. 622
November, 2011, credit score est. 635
December, 2011, credit score est. 635
January, 2012, credit score est. 664
decided it was time to make a large purchase, I got a used auto loan. One thing I learned, If you have a not for profit credit union, get an account there. Do all your banking there, and deal with one banker, or as I call mine, my personal relations manager. Let this person know everything you have been doing to fix your credit, and that your ready to rebuild with their help. It has worked wonders for me. I could walk into the credit union tomorrow and she knows who I am, and what loans I have without going to a computer to look at my file.
So, I was approved for a $11,000 used car loan, I let her know how much I could afford a month for payments, and we crunched the numbers. Well I did the number crunching myself. After the dust settled, I got a 5 year term at 10.41 percent. I figured I was looking at least at 15 to 16 percent, then after a year refinance. I will still refinance after a year. My monthly payments are 230.63, or automatic withdrawl amount of 115.50 out of each paycheck. Very do-able on my budget.
While on the subject of payments I did want to mention, in case not everyone knows, that if you pay your loan directly out of every paycheck, instead of once a month you can shorten your term! I did it for a half of a year. So in 4 1/2 years my car will be paid off and I will save about $600 in interest. And the car, a 2006 Jeep Grand Cherokee!
I also get quarterly bonuses at work, so automatically half will go towards the loan along with my tax returns. Make sure your loan has no pre-payment penalties, so all of these extra payments will help pay it off sooner. I don’t know if paying a loan off early is a good idea from a credit stand-point but it can’t hurt.
If anyone has any questions, just ask. Hope I’ve shown it can be done!March 1, 2012 at 4:12 am #2854
Hey man, thanks for sharing. I can’t believe we have so much in common. I got my CapOne in early 2011, a few accounts in collections, 2 pay for deletes and a paid charge-off. I just open a checking account at a local credit union about a month ago, and I’m planning to apply for a car loan there in a couple of weeks. I’m getting a Jeep too! Haha (though I want a Liberty).
Can you explain how secured loans work? It’s something I’ve been thinking about because somebody mentioned it the other day around here, but I still don’t understand how they work.
Also, are you telling me you called Capital One and requested an increase and they gave it to you right there??? Bastards, I called and asked and they told me you couldn’t request them…March 5, 2012 at 8:14 am #2855
On a lighter side, sad to say, but we all have so much in common. But were changing it!
So getting to your comment about the secured loan. Perfect choice, open an account at a local Credit Union, you will get better service and rates than a government run, money robbing, explitive bank. I might have said it before too, just lazy to go back and look, work with the same personal manager, or relations manager. Working with one person will allow you to get strings pulled when one person see’s the changes and knows personally how much you want to change, and get your credit back on track.
So its pretty simple….I have a checking and savings at the CU. when I had the funds to cover(secure) a loan I just had them hold the $500 in savings. Every month after making the loan payment the CU would release $100 and a day later my savings account would show that I had a balance of lets say $500, and an available balance of $100. The next month again would be a $500, with an available balance of $200, until the end of the term. I did $500 for 5 months. my payments were 102.35 a month, $100 principle and 2.35 interest.
Just as with a secured credit card, your total loan amount is covered in-case of default, not what were going for but it should be an option for almost anyone to get approved. This is where the work with one person is the way to go, I just applied online and originally was denied. Went to the bank, sat down with my personal banker and discussed what I wanted to do, it was covered by my savings account, she had to clear it with the board of directors(underwriters) and it was approved.
Now to say if it help’d. I don’t know…lenders want to see long-term accounts(3+ years, at a minimum) with great payment history. 5 months on a $500 loan will probably not turn any heads and get me a rate on a new car, but I wanted to have as many good standing accounts percentage wise to out-weigh my remaining derogatory account. Right now I have only one derogatory account on my report, and two pay’s or paid as agrees. One of the factors listed on my creditInform is:
Listed Num. 1–
You paid 66% of your accounts on time (as of the last time each account was reported). Note that derogatory accounts that have been paid off do not count as being paid on time.
This lowers your score. Any history of late payments (including missed payments and derogatory payment statuses) is a negative factor. No reported history of payments on any account is also negative because lenders cannot tell whether you paid on time or were late. Some cases of late payments are worse than others. If you have not been late with any payments recently, lenders may think you are responsible and do not (or will no longer) miss payments. Lenders realize that many people occasionally pay late. Therefore, being late with a single payment is typically not as harmful as being late with two or more consecutive payments. Similarly, being late on many accounts is typically worse than being late on just one. Also, lenders may view late payments as a more serious problem if you have collection accounts or negative public records such as bankruptcies or court judgments. These types of credit records indicate a pattern of credit problems. Finally, it may not be as harmful to be late with your payments if the past due amounts are small, because lenders stand to lose less money if they remain unpaid.
I’m lazy…that was right from my summary…sorry so long. Eventually if you have enough satisfactory accounts listed on your credit file that number keeps going up. I haven’t found the magic number, as it will be different for each person, but would expect that 85 to 90 of your accounts paid on time will look better to lenders, and that factor eventually will not matter to your score.
Hopefully I answered your question about the credit union secured loan. Now, just get out there! and make it happen!
Get Ahead!March 5, 2012 at 8:29 am #2856
Now for the congrats!
Love my jeep! The liberty is a nice vehicle. I live in Wisconsin, they just looked to weak for our winter’s, or what a lame winter we had.
Hope you get approved! I got my credit score…it dropped with the used loan…but I’m sure this is just temporary.
Oh, and Yes, I called Cap One and asked them to increase my credit limit. I am currently in a secret study to see if checking the “modify your feature’s” tab is logged in the system. I plan to log in every day, click modify my features, and click the link to see if there are any offers available on the account. I know there won’t be, but if its logged(I’m hoping) at the end of the month, I’m going to request another increase of $100, bringing my limit to $600. I am not depositing anymore money if this card will not become an unsecured card, and Capital One is the only person who is making money on my money.March 6, 2012 at 4:00 pm #2857
Hey man, thanks for the informative post. Knowing more about secure loans definitely gives me a few ideas. I’ll try to apply for a secured loan to buy a computer with some money I have in my savings account.
About the “modify your feature’s” tab, haha. I’ve been trying that for months!!! Still don’t get anything but will keep trying as well. Let me know when it works for you.
I will keep you updated with how the car loan goes.March 12, 2012 at 5:03 am #2858
Another month has gone by and got my email from CreditInform.com that my new report is ready to view.
After checking it over the credit union has not reported my used auto loan from the 8th of February. I did make a payment during the month so it should be reported. I will give it another month maybe they will back date it at the end of this month. If not I will request that the credit bureau’s update their files.
My score went from a 630(the loan application showed a score of 627), so I am more confident that the creditinform score, not totally accurate, is pretty close to my fico score. So without the loan account being reported my score for the month, as of the 9th, is at 659. Hopefully this will take a major jump next month when they report both Feb and Mar.
I have also thought about going into business with this whole thing. I’ll test it out on a co-worker and see if I can get him the same results I have had.March 13, 2012 at 2:54 pm #2859
Hey, congrats on your new score!
It’s not a bad idea to start a credit business. As with everything else, I’m sure the hardest thing would be getting some customers at the beginning, but once you get it going I’m sure it could be profitable. Keep us updated.
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