When do we need to start applying for these loans? I am going to school in the fall and want to clear things up
I have about 1300 dollars in cc debt which I am paying off with a decent job I got for the summer making about 3000 dollars. I am going to aggressively and quickly pay it off and try to get rapid rescoring to improve my credit score. I had a stupid medical bill that went to collections while I was abroad in France which brought down my score to a 580 from a 670. I am hoping to get my score back up to around 670 or higher like it was before. The collections debt payoff should alone jump the score up 40, 50 points. Why does it have to take so damn long to process?
Applying for the loans sounds nervewracking and makes me nervous about it. Is applying in mid July too late? I doubt I will have my ccs paid off in full til the first of July and my credit report would not reflect it likely without rapid rescoring. The rest of my summer money is going to pay rapid rescoring fees and work with lenders to get approved. I'm sure I'll do it but when do I need to initiate the process?
One way of getting some points is asking for a credit line increase (as long as they don't do a "hard credit pull" resulting in score-eating inquiries). A CLI helps with your utilization. For example, you have 2 credit cards Amex has a credit limit of 1000, you have $700 on it (your utilization is 70%), Visa has a 500 limit, you have $400 on it (80% utilization). Your overall utilization is 73%. You get Amex limit increased to 2000, and Visa 1000. Your utilization is now 36%. Most people see score jumps when their utilization drops below 70%, 50%, 30% and 10%.
For the collections, it takes time to get them off your report (aside from waiting the 7 years for them to drop off). Check the statute of limitations for collections in your state and check the licensing laws for collection agencies (in FL debt collectors need to be licensed, but many of the agencies attempting to collect aren't licensed!) Dispute the collection, a lot of them will go away with some legwork. Always ask for VALIDATION (not verification) that the debt is yours before agreeing to pay. Stay off the phone w/ the collections, you have no paper trail with phone calls. If they validate properly don't pay them before send out a Pay For Delete letter, there are sample letters on the web, (certified mail return receipt, NEVER put your signature on a letter to a collection agency). Get them to agree to delete if you settle with them (also negotiate what you're willing to pay) If you pay a collection, but don't get it off your credit report then you are no better off.
All this is what I've learned through my experiences and research on repairing credit. Your mileage may vary. Check out www.creditboards.com/forums
it has tons of info on slaying the credit dragon!
Hope this helps!