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Falling credit - is there hope?


i12caHiFICO
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<newbie alert>

My DH's credit score has been OK, except for a high debt ratio. Over the last couple of months we've hit a few bumps and have made some late payments. It will take a couple more months to get caught up, then we want to buy a house (will borrow downpayment from ins. & 401K).

Last November we prequalified to buy a house, and all 3 of his scores were above 620, good enough for an FHA loan (his credit is better than mine, so we will qualify based mainly on his). Didn't find a house then, now we have. Only 6 months later, EX is in 560s, EQ is in 540s, and I don't know TU.

A couple of collections will be taken off EQ & TU in the next month (didn't show up on EX), but I have no idea what to do about the lates. There's one 90, one 60, and four 30's. One card is still over the limit because of late & overlimit fees. How does that affect the score?

Once we get caught up, will goodwill letters do us any good? I know it hasn't been over a year, but we don't have a history of making late payments. Do creditors even care? Will they try to give me that "we must report accurately" line?

Is there anything we can do to raise the score or are we out of luck?

I'll appreciate any advice, however difficult or outrageous it may be :D

Thanks!

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Think what would be reasonable in your case would be to catch up asap on the ones not current; and give a few months room of good payments before trying the good will letters.

Need to address the over the limit account; this can hurt the score as much as 50 point per occurance. Also when you have this one under control & paying as agreed again (give a few months time though) then call back requesting if you can have a credit limit increase to cover the difference that you went over by.

You may get shut down; but don't give up till you have at least tried a few times different directions to see if maybe another person would yet consider to help.

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Thanks for your reply.

Wow, I didn't know being over the limit could raise the score so much. Will the score go back down after the balance is paid under the credit limit, or will we always pay for that mistake?

On this particular card, after we were late a couple of times they jacked up the interest from 8% to 22% and hit us with several late & overlimit fees. That added up to us being $600 over the limit. Things can sure turn ugly fast. I would feel a little better if we at least had $600 worth of stuff to show for that mistake :rolleyes:

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Ouch; it is still salvagable but will take a bit of time; the scores never recover as fast as they take a dive. The interest rate is a killer; but most people would panic at this stage & close the account (which I did myself once). Balance tranfer if you can to another lower account; so that you are not suffering for too long with these high rates paying. Leave a minimum balance though and pay the rest of the way down as agreed.

What ever you do; keep the account open; just use sparingly. Then later request if they will lower your interest rate back down. If you hold on to this account more than 7 years the late dates will eventually fall off though (unless with a goodwill letter you can get them off sooner).

Boy if I had known this years ago; I would of taken more care to maintain longer relationships with my creditors. But that is what I am working on now.

Funny but my grandmother had her Sears card since the very first one was issued; a few years back when she went to the store to use it; the clerk had never seen that card before. Since now they re-issue a new card every few years. So I know she had that card a LONG time, lol.

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