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Credit challenged and a Crystal ball.?

Ok. We are really credit challenged as we had a few bad years. Our credit scores are awful at 521 and 506. I have been making the car payments on time and the credit cards will be paid off next month (have been paying monthly) I have paid in full 2 items that were in charge-offs, and have paid of the medical collections as well. Literally end of April everything will be paid off except for our cars and living expenses. Is there anything else we can do to help us along. We are hoping to purchase a home NEXT april if our scores are over 640 (is this reasonable do you think). Am I overlooking anything? Is there more than I can do? We are trying to do everything right. Is going to each Credit bureau and getting scores better than using fico? Please only serious helpful answers. Thank you for your time.
We are planning on saving and putting everything in a Xmas account so we cannot get it out and having a smaller savings account in case of emergency. We plan on having 10K for our house at least


  1. 1. You could contact some of your paid creditors and see if they will be generous enough to completely remove the derogatory information off of your credit report. Some will some won’t. They may tell you to dispute it with the credit bureaus and they won’t update, so the credit bureaus will drop it from your report.
    2. Open a “secured” credit card with a balance of at least $300 to start reestablishing credit.
    3. Save more money for your down payment to offset your credit score. With more money down you won’t look as risky to the bank.
    The biggest thing with bad credit is time. If you pay all of your bills consistently, by April you should see a good jump in your scores.

  2. If everything is as you stated your score should start going up quickly. Continue to pay your car payments as agreed and by next April 2008 that is, your score should be at least 100 points higher.

  3. Once you get the credit cards paid off, pay extra on the cars. By doing that, you’ll reduce your debt ratio. That will help. Not to mention, your cars will get paid off faster and you won’t have a car payment to make anymore which will help when you have a house payment to make.
    Your overall debt is part of your score so what you still owe on the cars is showing up on your credit report. You want that amount to be as low as possible.
    P.S., I don’t know what the Xmas account pays in Interest but traditionally, they didn’t pay a whole lot. I didn’t know anyone even offered them anymore. I would think you could get much better interest in a Money Market account.

  4. Sounds like you are doing a good job of improving your credit profile. One thing I would suggest is that once you pay down your credit cards, do not close those accounts, as that might actually hurt your credit score. It is a good thing to have available credit, so leave them open.
    I’m not sure about your other questions, but there is a lot of good advice on improving your credit score on Suze Orman’s website at

  5. I have placed this in the source box. There is a wealth of information there and a great free debt management software program. I bookmarked the site as I return to it often for the advice it offers. I hope this helps you.


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