Credit Rebuilding Strategy

What has seen my credit go past 800 is the following:

• Settle all charge offs, you can typically do this for less than the amount owed. Around 25% of balance seems to be acceptable to most but you may want to try for lower given your long time horizon. Never give them access to your checking account, pay the full amount in a lump sum, and get it in writing that the agreed upon amount settles the bill.
• Have one or two open credit card accounts. One should be near zero utilization. I have my every day card, and another that is used when its special perks are needed.
• Pay in full all other loans. There is no need to get more loans.
• In your case, save money like crazy. Having a full down payment (20%) will drastically help with your rate.

Credit score algorithms are dynamic and can change often. Gaming the system is increasingly difficult. Just pay your bills.

It also seems to me, that the age of accounts, mean less than they used to. A 2 year old account seems to contribute just as much to one's credit score as a 18 year old account if they are utilized correctly. That is, if this is a credit card, the balance is pain in full each and every month.

Hopefully that goes without saying: Pay off your credit card each month, or don't use them.

Your score of 715 is typical - the average for Americans is 719, so you aren't out of the ballpark. It's possible to obtain a mortgage with a score as low as 580, although that will obviously be a subprime loan that carries a higher rate.

For starters, to improve your credit you need to settle any outstanding collections. Yes, you CAN settle them for less than face value, but the positive effect on your score when you do a partial settlement is less than it would be if you were to pay it in full. The collection agencies include that with their reporting info to the bureaus.

Opening additional cards now is a negative for you, because it lowers the average age of accounts, and that has an effect on your ability to borrow. The more sensible thing would be to see if you can increase the limits on the cards you already have. This lowers your credit utilization rate and your average age of accounts doesn't take an unnecessary hit.

While it won't have any effect two years from now, all of your card applications impact your score for anywhere from six months to two years if the creditors did a "hard" pull. You'd know this if the bank/creditor told you the application wouldn't affect your score, in which case it was a "soft" pull that doesn't hurt you.

If you don't need the credit, stop applying for it.
If the goal is to improve your credit enough to buy a house, focus on what you already have. If you feel the need to add more and don't want to risk denials or adding more inquiries then go to a credit union and ask about taking out a secured installment loan. Credit unions are great for this because they charge very low rates for them. Mine charged me 2.4% for a secured loan.

In the end, you really need to pay the charge-off if you plan to buy a house, because if it is still active then it could affect your ability to obtain a mortgage at a decent rate. Figure out a way to make arrangements and then keep them.

Those are the best suggestions I have for rebuilding your credit. Good luck!