When I was in my early to mid-20s, they thought it would be a good idea to give me three decently high-limit credit cards. I was dumb and treated them like cash, almost maxing them all out. A couple of years later, I got severely ill and was out of work for four months with no savings. I was too proud to ask for help at the time, and the cards went past due and into collections.
Since then, I've gotten a better paying job, only have low limit cards I pay off every month, and have paid off the collections. In addition, I've been fortunate to pay off my vehicle and purchase a house without going through a lender. None of which has improved my credit score. Am I SOL until the 7 years is up on the missed payments/charged-off accounts, or does anybody have any advice on what else I can do to improve my rating.
I get phone calls and mail from "credit repair" companies. Are any of these legitimate, or are they scams (my assumption)?

I've had a few friends use ASAP Credit repair (https://asapcreditrepairusa.com/). Seems like it would accomplish the job.

Most of these credit repair companies seem "scammy" because many of their customers are "returning" customers, as in, they use this to remove the bad credit items but they don't make any actual changes to their spending habits and get right back to where they were previously (thus, the service didn't "work" because their credit sucks again). Sounds like that isn't the case with you.

Do you have a financial advisor you could use talk to? If not you might try to schedule an appointment with someone at the bank you use.

Outline your goals for credit health and see if they can help you get there. Something like "in 3 years I'd like to buy a home and want to improve my credit so help potentially get a decent loan through this bank."

I don't have a financial advisor at the moment, but I use Quicken to track my accounts and cards and set a budget that I'm good at sticking to.

Thankfully I'm in a position where I do not need a loan in the near future. I was fortunate to buy my house in cash, budget to the point I have some savings, and my retirement accounts have been performing well. I'm more worried about a subpar credit score holding me back when I am job searching after I (hopefully) get my MBA in a couple of years.

Paying cash for things doesn't help improve your credit scorethat's the "credit" part of "credit score".

To improve the credit score, getting a (even if crappy) mortgage and paying on it good for a couple of years would have helped. Same with auto loans.

It takes a few years of a few different types of credit with on time payments to move the needle. The other big factors are 1) length of oldest & average card - if all of your cards are newish, that's not helping, and 2) credit utilization - if you have low limits on purpose - that's hurting you.

Your situation is the beef with credit scores. There are plenty of yahoos who don't need credit, and the credit score model helps protect a lender. Then there are responsible people (like you after your awakening) who do the responsible things, and those things by design keep you from improving the score.

I'd probably go talk to my bank. About it. Set up a meeting with one of their credit specialists - even if it's at a different branch. They might advise you to takeout a small mortgage or something, which at these rates wouldn't be terrible.

EC13 said:

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Thankfully I'm in a position where I do not need a loan in the near future.

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In my opinion you've cracked the code. The system wants you to think you have to have good credit to buy crap you can't afford so you can improve your credit and buy more crap you can't afford so you can keep feeding the beast. You have savings, assets, income and potential, you no longer need to beg for loans on the basis of your good name. If you ever decide you want to borrow money again you can secure it against your assets and probably even get better rates that way. Forget about your credit, you don't need it. Next time you're buying furniture or an appliance and they offer 0% for however many months go ahead and take it, set up autopay and before you know it you'll be in the 700s.

EC13 said:

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I'm more worried about a subpar credit score holding me back when I am job searching after I (hopefully) get my MBA in a couple of years.

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Is this a valid concern? As far as I'm aware I've never had my credit checked for a job. Guess it depends on the job/ industry. I know they do it for .gov security clearance

As a small business, we run credit checks on any finance / accounting / purchasing roles. Back in my corporate days, similar approach was used. Depending on your area of expertise and industry, its a very real concern.

My background is in banking. Currently, I am a bookkeeper, and I'm in school for business admin with a minor in accounting. Both banks I worked for ran credit checks on me before it got too bad. They would hire someone with a criminal record before someone with bad credit.

I'm leaning towards going back to the banking industry in a larger role or some type of financial officer for a company, but I am afraid the mistakes I made at 25-28 will haunt me into my mid to late 30s.

EC13 said:

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My background is in banking. Currently, I am a bookkeeper, and I'm in school for business admin with a minor in accounting. Both banks I worked for ran credit checks on me before it got too bad. They would hire someone with a criminal record before someone with bad credit.

I'm leaning towards going back to the banking industry in a larger role or some type of financial officer for a company, but I am afraid the mistakes I made at 25-28 will haunt me into my mid to late 30s.

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Your ability to demonstrate a track record of fiscal responsibility gets better as the years count to 7. Have your story together on what went wrong and what you are doing to ensure it never happens again.

12 years ago I started a business with a partner who had a bankruptcy in the previous 2 years. He was not considered when it came to personal guaranties with the banks and our overall ability to get credit with vendors was challenged, but otherwise we managed around it,

There are people who believe in second chances. If someone gives you that second chance, make the most of it and shine shine shine.

One of the pieces of advice i frequently see for building (/back) credit is to open an account/start a relationship with a credit union, as they are more willing to work with you on building your credit than the big banks may be

First of all, congratulations on pulling yourself out of that and recovering.

Secondly, I would do like others said and maybe go talk to your bank. I just read an article a week or two ago about credit scores and how more and more institutions are starting to de-emphasize FICO score in favor of a more holistic view that would take into account your actions you've listed here.

There might be more flexibility for you than you think.

Thank you, and I hope so! I've worked hard to get my **** together (going as far as moving to Abilene) these last few years and want to put myself in the best position possible that I can right now.

Open an account at a credit union that does title loans, borrow $2000 on the title to your vehicle or more if possible. Payoff the loan in 7-12 months, that will get you some car credit.
After you pay the first one off then see if they will give you a credit card with a decent limit.


Your score will spike.

Do not go to a "title loan" business that would hurt your credit and cost you a lot of money.