How will this affect my credit scores??

Question

I have a total of 12 accounts on my credit reports.

1- GMAC Auto loan--originally 19,875 balance 3,245( Im goning to pay it off early in Feb.08')
1-HSBC Tax loan--- 800.00 paid in full
1-HSBC Credit Card--Limit 300 balance 295
1-Capitol One Credit Card--Limit 500 balance 150

All the accounts above are always paid on time and I have never once been late on a payment.

Now for the bad...
4 credit cards that were charged off
4 collection accounts from the 4 C.C's

Those 8 negatives will be over 7 years old in March 08'.

My question is when those 8 negatives drop off my report how will it affect my scores? Will they raise because I wont have any more negatives or will the scores drop because Im losing all that history?

My scores now are... 556 513 570... which are terrible. What could I do to raise them?

All help is appreciated!

Answer 1

Your HBSC card is maxed and killing your score. Get that below 30% of the limit.

The credit cards that were charged off..........if that happened more than 4 years ago. Try a simple dispute to each CRA and they should come of now. The credit card comapnies archive records of old accounts with no activity and may not be able to retrieve your account info in the 30 day dispute window.

The collection accounts and balances on those CCs should be uncollectable anyway if you are in a state where the Statute of Limitations is less than 6 years. Once the debt becomes uncollectable because the Statute of Limitations has tolled, they are now reporting inaccurate information to the CRAs (which is illegal). The mere fact that it is reported is conveying that the amounts are still due. This would be prohibited collection activity.

You need to become familiar with the FCRA and the FDCPA also your state laws regulating collection agents and collection practices.

Answer 2

Low score is either you don't have enough credit, or or any cards you have they are not enough 'free' credit, meaning your close to max on the cards. If you are shopping for a car, the credit company knows that where ever you go they are going to pull your credit it. some dealerships will put your credit out there for a few companies to pull and see if they can get you the loan bcuz they want to make the sale. If you are looking for a car it would of been better to call around to a bank and get your own money through them so that the dealerships don't pull it so much. Yes it does effect your score, give it sometime before you check it again. And it is important what kind of credit you are looking for, make sure that it is important. Don't apply for just any card. The way they want it to set your self up to buy a house is having 3 lines of credit-3 cards open with 30% being used and the open line being at least a year. Treat it like gold, very careful, it is very important.

Answer 3

Your score will go up but not that much. As negatives get older, they have less impact on your score.

Keep your credit card balances below 30% of you available limit. Paying them in full every month is even better.

You need a minimum of 2 years of on time history to see real improvement in your score.

Answer 4

My best advice is to read a great book. Young Fabulous and Broke (or any other book) by Suze Orman will give you great advice on getting out of debt, raising your credit score and keeping your credit score high. I followed her advice, got out of debt and raised my credit score over 100 points. Sometimes I feel like an infomercial when I give this answer, but I seriously believe that her book helped me crawl out of a major financial hole and that its worth reading. Good luck!