Credit score confusion (self)

[Andy Ballester]

I had just recently applied for a mortgage loan, but had not checked credit score in about 8 mths, however last time I checked score was a 705 on all 3 agencys, after applying I had only checked with experian assumed may be a little better, only to find out my credit score was 635 I have some school loans which I have missed some payments in distant past, have not missed a payment in 4 yrs only owe about 4800 left, 3 seperate loans required to pay 100 mth and I pay 125, and one other outstanding dept it is to a bank, for a previous closed account, which I owe 215$ it was from 09 for a 1$ overdraft which they kept billing me 30$ a day for a week before I was notified needless to say I was extremely upset and closed account, I know stupid I should of taken care of it and will as soon as posable. Im also a merchant marine so I basicaly live on the ocean I have 15000 in a thrift savings plan and 40000$ in cash assets no home, no car payment, no credit card debt, honestly never had a credit card. And there is no new dept on my credit report, how could my score drop 70 points and if I pay off school loans in full how long and how much could it rise. What is my next step I could have zero debt tommorow. But not sure how much it would help suggestions please.

[Andy Collins]

Don't go out and apply for several lines of credit at once, you will get hit with multiple inquiries (which have a small effect on score) but mainly your "average age of account" will get hurt, which hurts your score more (unless you have really long term good credit, which you may or may not.

A goodwill letter on the student loans is worth writting, your basically writting to the lender saying you made a mistake in the past, but have been current for 4 years, and now those late payments from 4 years ago are hurting your credit and your ability to buy a house, and ask that they remove those late payments from your credit report as a good customer. Sometimes with some lenders goodwill letters work, you never know until you try.

Building credit is a long process, but mainly you need new good credit reporting to "water down" those old late payments. If you had been making payments on 10 accounts for the past 4 years, the effect of those late payments on the student debt would be less.

As I believe @Michaela Graham stated, there are literally dozens of scoring methods,,what you are interested in is your FICO score, which you can buy from MYFICO.com,,,but even then, there are different versions of your FICO score, and of course 3 different credit reporting agencies.

Whatever you do, don't do anything until you have researched credit repair, Michaela was great to point out, just paying off an old late sounds like it would be positive,,but you have to do it right