DIY Debt Consolidation & the Aftermath: Credit 'Repair'!

[Account Closed]

so, couple months ago i settled multiple unsecured credit cards and now finally they are reporting as closed (by the consumer) and settled (for the amount agreed; a few say for less than the full amount, though).

my fico/credit score is still terrible, low, though, at 528. last year, it was in the 700s but then i splurged at home depot and realized i may as well just default on all those credit cards and let them go to collections cuz i heard they settle for around half. besides i was going 'blind' (severe postcapsularhaze) for some time after a traumatic head-on injury and even after eye surgery in both eyes so my credit score was the least of my concerns.

anyways i'm wondering now that i do not have nor will i open any new lines of credit (no more credit cards, no more cell phone contracts, no mortgage, no auto loan, etc) indefinitely, how long might it take for my credit as far as 'score' to be back up to qualifying say for an FHA?

a year or two? much longer?? or do i have to wait for the negative credit card histories (ie, 180+ days late before closed) to drop off my credit record more completely in like 7yrs or whatever the current cutoff is?

do i now need to open secured lines in order to build it back? i havent ever considered starting a business line of credit (as my organizational endeavors are more in the nonprofit arena, not business) but might be open to that too if there is a way to start a business line of credit with no good personal credit to back it up with in the 1st place =/

[Jason Allen Taylor]

Business credit can be built, but it will not help you as much as you think. You will be better served to re establish your personal credit.

In order to start rebuilding credit, the most pressing time-sensitive matter is to establish long-term open lines with good payment history as soon as possible.

Open a secured credit card with a limit of 4x of a regularly recurring bill - cell phone, water bill, etc. Have the creditor automatically charge the card every month, your bank automatically pay the credit card off every month, and your paycheck direct deposit into the account every week. Then cut up the card.

Open a small loan at selflender.com and draw it out for as long a term as you can. Pay down 50% over two months, and then make minimum payments automatic debit from your  bank account.

No matter what you do, DO NOT ALLOW EITHER OF THESE PAYMENTS TO EVER BE LATE. The easiest way to do this is to have your direct deposit split between two accounts. The account used to pay these two bills (and ONLY these two bills) should receive 130-150% of the amount needed to pay these two payments, and all of the rest of your money should go into a separate spending account. Get a separate debit card for each account. Put the debit card and checks for your bill paying account in a place where you will never use them, and don't touch that account regardless of how much money is in there.

Get a free account at creditkarma.com and track your progress. Do not take any offers, open any cards, etc., just use it to track your score and credit details.

There is much more that can be done, but these things should be done first. You can dispute, update, cajole, etc your credit reports any time, but you can't fake how long your good performing accounts have been active.