How Best to Repair Credit Score After Foreclosure Repo and Default
Hi Michael, I recently decided I was going to tackle my husbands bad credit myself. Unfortunately, like so many, I do not have the best idea where to begin. Below is a breakdown of the situation I am trying to resolve as a DIY-er. Anxious to hear your thoughts.
Background: Lost job due to sudden company wide lay offs. Was the only income for our family at the time. The lay off caused a relocation, which in turn felt like starting from square one. We now have a two income household, which we hope will allow us the flexability to rebuild. Because my husband was the only one working at the time everything financed was in his name, only. We currently have everything that requires financing in my name...
Events (not in any particular order):
Forclosure of home: July 2012
Reposession of cars (2) November 2010
Credit card debt: We had 7 open revolving lines of credit, all of which are now in bad standing.
Student Loans: (2) I have recently contacted Sallie Mae and committed to a repayment plan.
Current Score: 540
Goal Score: 650
Let me know if you would like any further information. I look forward to hearing back from you. I figure there is no better time than now to at least get a game plan and start making steps in the right direction.
Is my situation far to much for the DIY-er?! Do you think we have a chance of bouncing back?!
—MelissaD
Recovering from a temporary financial setback (not that the years you endured could be called temporary), and repairing your own and your husbands credit score, is possible. You can have better results going about your own credit repair, than by hiring someone. The number one ingredient you will need is patience, sprinkle in the resources to resolve old unpaid bills in collections (when it makes sense to do so), and a dash of know how – and you are on your way to recovering your credit score. Well… at least getting to your goal of 650. First thing I want to address is the patience part.
How quickly can you repair credit on your own.
There are going to be different circumstances for each person trying to repair their credit. Someone with one or two negatives, set beside several positives, will have an easier go of repairing credit and increasing their score. And can often see fairly rapid results. Compare that to someone whose credit report is weighed down with more negatives than positives and you need to have a patient perspective. Measured in time that will often mean 24 months and more. And given the information you shared, that is going to be the case here.
Negatives on the credit report tend to have the heaviest impact the more recent they occur. 24 months after a negative appears on your credit score – the damage is going to have less of an impact. With that in mind, I will size up your situation with some general feedback.
Foreclosure on your credit.
That foreclosure will have less of an impact starting next summer. There is not much you can do about that at this point. So using the next year to improve other areas should be the goal. If you can clean up much of the other negative reporting you could find yourself in a position to get a new home loan approved (if you enter the market that soon) with in 2 years from now.
FHA underwriting standards for home loan approval have pretty low credit scoring thresholds compared to other lending standards. But you can need 3 years separation from a foreclosure or short sale event in order to qualify.
With the new qualified mortgage rules, that will take affect at the beginning of 2014, you would need to handle all of the collection accounts and get them to reflect zero balance owed in order to improve your chances of getting approved for a home loan. This is because of the debt to income ratio that will soon be required to be met in order for loans to meet Fannie and Freddie purchasing.
Car repossession on your credit report.
The car repossessions happened nearly 3 years ago. That means the credit impacts could have lost some potency. But that would be more applicable if there were only a few negatives compared to many more positives on your husbands credit report. In other words, those 2 defaulted auto loans do not exist in a box. Dealing with those alone will not improve the credit score overall because of the other things that are weighing him down.
Auto loans that go unpaid, and cars being repossessed, result in the cars getting auctioned. More often than not the auction price paid will be less than the loan balance that was still owed. The auction price will get subtracted from the loan balance and any amount on the loan left over is referred to as a deficiency balance. The finance company will typically make some initial attempts to collect on the deficiency balance by making a couple collection calls, and sending a collection notice or two. But their collection efforts are often quickly turned over to outside collection agencies. The unpaid debts from repossessions are also bundled up and sold off to debt buyers.
At this stage (after 3 years), you probably will see the auto loan default and charge off, but could see other negative credit reporting from a debt collector or debt buyer. Settling the deficiency balance can often be accomplished at a pretty good savings, and the updates to the credit report that the balance owed is zero will help improve the debt to income ratio, just not the credit score immediately.
Who are the last known collectors on any deficiency balances from the repo’s? Are there any additional negatives on his credit report (besides the original reporting by the finance companies)?
Defaulted Student loans on credit report.
When you default on many student loans, you limit your options to consolidate them into more affordable monthly payments, or to qualify for income based repayment plans. You have to bring the loans out of default in order to again qualify for better payment options.
Similarly, you often must bring student loans current, or out of default, in order to improve how they appear on the credit report. This will often mean getting set up on payments, which you indicate you have already done, and also making several monthly payments (often 6 or more), on time.
Was there any part of your conversations with Sallie Mae that involved the benefits to credit reporting once the loans were brought out of default and timely payment being made for a certain period of time? How long have you been making the new payments you set up?
Credit reporting and credit cards in collection.
Unpaid credit card bills that go 180 days without payment get charged off. If you can get a payment plan set up with the banks before that happens, or even settle the balance for less than what you owe before the accounts charge off, you can mitigate a little bit of the damage to your credit. If all 7 of the accounts have charged off already, there is little to be done about that. But you can start to bounce back from that by resolving the debts now.
Once credit cards get charged off they generally will get sent to third party debt collectors for further collection efforts, or sold off to debt buyers, who may add additional collection accounts on your credit report. Some banks (and debt buyers) place collection accounts with attorneys. This can lead to being sued. If a judgment goes against you, that fact will appear on your credit report with a whole new 7 year shelf life. That said, I have some questions about the credit card debts.
- When were the last payments made on the accounts?
- Who were the original creditors? Who is collecting on the credit cards now (if you know)?
- If the credit reports are showing the original creditors as charged off, but with a zero balance owed, it nearly always means the debts were sold. Are there any collection accounts showing up that you can tie to the original credit card banks?
- Are there any attorney collectors trying to collect on any of the accounts? If so, are any of those attorneys located in the same state as you are?
- If you were to approach your credit repair efforts by methodically and strategically resolving old debts one by one, how much can you commit from your monthly budget consistently? Can you tap any lump sum resources in order to be more aggressive with resolving the debts?
Making progress with your efforts to repair credit is going to take time, but from what you have shared, if you have credit goals with a 1 to 2 year view, and can apply resources to this, you can meet your goals. There are alternatives like bankruptcy that may make more economic sense, but I will save that for some comment feedback after you post answers to the above questions.
Anyone looking for feedback about repairing credit after experiencing a tough financial setback is welcome to post in the comments below for feedback.
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About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.
I have two car repos back in 2011. I also have a medical bill for around 600 dollars. I had defaulted students loans but my federal taxes were taken for that 2 years ago, so the student loans are now paid. I just got a secured credit card and am trying to rebuild my credit, haven’t had a first payment for it yet. What should I do to rebuild my credit the fastest way? I am trying to get a home loan ASAP.
List the balances still owed on the repo’s and who is collecting them (if you know).
Do you know your credit scores as of today?
I have two major Issues regarding my credit report. ….
The first issue is regarding my mortgage. My husband and I refinanced in 2006. The original refinance lender sold the loan to Countrywide within a month. Bank of America took over the mortgage when Countrywide folded. When the economy took a dive (my husband was laid off), so did our finances and we were nearly foreclosed in 2012. B of A sold the mortgage to Seterus in December 2012. Later in 2013, we still had financial difficulties and applied to HARP to refinance. Since 2014, there are no missed mortgage payments, but our credit profiles are not good………
**The issue is that the credit reporting agencies list the original mortgage company, B of A and Seterus listed as originating the loan in 2006. My husband and I never had more than 1 mortgage company.
B of A sold the loan to Seterus in December 2012, and we started paying Seterus in January 2013. Why does our credit report show B of A and Seterus as beginning the mortgage in 2006? It looks like we have 3 lenders at the same time, when we never had more than 1.
**Issue number 2 has to do with A debt that Midland Funding Collections bought two years after Care Credit charged off a medical payment that I charged onto their card. Because I was having major financial stress issues, I developed “head in the sand” syndrome. I ignored all phone calls and letters by creditors and collapsed into just concentrating on saving the mortgage.
When Midland bought the charged off account, the amount owed had already ballooned. The credit reports say that I owe over $5,400. I think that Over 60% of the amount that they want is accumulated interest. I had no direct contact with Midland. I recently disputed the Midland account through Credit Karma, because I didn’t know what it was at the time. In January, I looked at Credit Karma again and nothing good changed regarding this debt. I want to send a debt verification request to Midland, but I don’t know if I am shooting myself in the foot.
My question is, how should I proceed? I don’t have $500, let alone $5,400 to pay a collection agency right now. I have a number of other creditor derogatories, but the:
1) “multiple mortgages” and 2)Midland Funding are the biggest issues. Midland Funding and most the others are medical debt I need to clear up everything in order to be able to qualify for finance a car.
If the BofA mortgage entry on your credit report is showing anything negative, what is the most recent date of the negative (month of a late payment)?
When did you stop paying on your Care Credit account? That debt buyer, Midland Funding has a new credit reporting policy, and that could help you if/when you are ready to settle it. I do see good settlement deals with them.
28yr old mom of 3 boys. I have a repo for my vehicle on my credit with a zero balance. They got more for it than what was owed. I just consolidated my student loans which were only $3k I’ve got a cellular bill and a cable bill on my credit. My score is 430. I pay everything on time. I’m trying to get another car and buy a home but don’t have any idea where to start. I work full time and make good money so I know I can afford one. Down payment is an issue though. I don’t want to do credit cards at all. Where should I start to raise my score to buy a nice home and rebuild my credit?
If your main goal is home ownership I would look for a savvy independent mortgage broker in your area that has FHA experience. You can get an FHA loan with less than a 600 credit score, and some good hardship talking points, as long as you have no unresolved debts.
You will want to resolve anything unpaid.
Getting a car loan and paying on it for 6 to 12 months will go a long way.
Do you rent now? From a property management company or an individual?
Hello I’m trying to rebuild my credit I had a c edit card from a bank cl of 1,000 …due to financial struggles I maxed it out to 800 and couldn’t pay its been around 14months . What can I do now my score is in the low 500s…… oh and I accident,y closed off a chase cc recently … what can I do to rebuild my credit I recently got a secured card from wells fargo
What accounts do you have showing as positive on your credit? What accounts do you have showing negative?
I have two car repos on my credit from 2011. I have medical bill for 500 dollars on my credit. I had student loans but two years ago my federal check was taken and that was paid in full, but Is still showing up on my credit report with 0 dollar balance. How can I rebuild my credit from the 540 credit score to good credit?
If those collection accounts remain unpaid, settling them would help. The repossessions sound like they will come off in 2018. If those deficiency balances are large, it may just be best to wait for those to fall off rather than settle.
In the mean time you may want to look at setting up a secured credit card.
What goal are you looking to achieve, and when, with the improved credit?
I am trying to buy a house within 5 months.
Hello,
My husband and I are thinking of giving our SUV back to the finance company. The SUV is solely in his name. We only have 1 income right now, which is his. He has 4 credit cards that are in good standing on with a high balance on all. We plan to pay those balances down soon. How would this voluntary repo affect his credit and how long do you think he would have to wait to purchase another vehicle and a home? Also, we filed bankruptcy in 2012 and that’s due to be taken off our credit in about 2 years.
Hard to say how the Repossession will impact his credit score. But you can get FHA financing with a 620 (even as low as a 580). You will want to have any deficiency balance that may result from the repo settled before applying for a loan.
Getting a new car loan after having a repo is not too hard at the time I am replying to you. I have worked with many people who waited a year or two and had no problem (but had no unsettled debt on their credit).
Hi Mike,
My wife and I came to a realization after a few untimely medical bills that we needed to look at other options for our debt. We were only making minimum payments, and treading water. We decided to go the route of a company to settle our debts for us. We figured we were at least trying to do the right thing. We were very uncomfortable about ‘not paying’ our credit cards, as advised by the representative. We are still in this program, have paid off (2) credit cards, but a 3rd credit card sued us. We were represented as part of our agreement by a litigation firm, and agreed to a settlement. Fast forward 5 moths later, and the settlement went null & void as I was laid off from work, and was unable to keep up with the payments. Next up, our bank account was levied for the amount owed. Obviously they got very little because we didn’t have the funds.
At the moment, I am currently working with the Collection firm representing my creditor to work out a plan for repayment. But I am worried because now we have a judgement showing up on our credit report, as well as 4-5 charge offs.
Luckily we do have 2-3 other credit cards open that we rarely use, very low balances, and pay on time and are in perfect standing.
I know the judgement and charge-off will stay on our credit for 7 years. What is the best way to repair our credit (without bankruptcy), and a realistic time frame until we can improve the scores? 7 years? We’re currently in the mid 500’s. No bankruptcy or foreclosure on our reports. Charge off’s and the judgement are the worst factors, other than the late payments. Yuck.
Any advice is greatly appreciated. Thanks very much.
Very disgusted with our situation.
You are likely looking at 12 to 24 months of rebuilding your credit after the last settlement is done. Payment plans will not update to your credit reports as a paid or resolved collection account. Try top get everything knocked out as quickly as possible as you bounce back and are back to work.
HI,
I have an auto loan with NFCU, and I have 7 negative reporting months. 3 (30 day late) 3 (60 day late) 1 (90 day late). The latest was 30 days late in July. Prior to that it was Feb, Mar, April of this year. The ones prior to that were Sep, Oct, and Nov of 2015. I was separated from the military when they had to get rid of a lot of people and I struggled finding a steady job afterwards. I now have a permanent job where I can make every payment on time. Is there a way to have these negative reports cleared up if I pay consistently for a year? It is the only negative thing on my credit report. I still owe 34,000 on the loan and I have 102 monthly payments left.
NFCU is not going to be open to removing those late pays. But time will help you bounce back from being late, even if that is still on your credit reports.
September of last year I received a trust fund and decided to work on my credit. It’s been a slow start but has come to the time where I can really pick up speed. At first I worked on keeping my account above water and establishing a pattern of healthy habits. The next step I took was opening a secured card directly through my bank with a small limit of 300. I have a credit history of one year and three months which is hard on my score but in the time frame where the age is negative towards my score but each month is more and more positive and has finally turned into a fair amount of time becoming more beneficial. The age of my credit card is 1 yr 1 mth. I have zero late payments and have a utilization of 6 of 300$ on the last update. I have tried to make sure each updating day that the account was fully paid at first and then after learning that having a small utilization amount was a good thing each week I would make sure it was paid up to leave only a small amount and each month the bill was paid up before hand. This was simple due to the card only being an extension to my daily amount. My limited opportunity account has a low cap on my debit card each day and when needed I would charge the credit card the full 300$ and instantly pay online and use again when buying things that were more then the daily amount allowed to my debit card. So most times I used the card it was for things that required me to pay it off and recharge the remainder, ex a purchase of 345$ the 300 was charged and paid and 45$ was charged, so card utilization was shown, Payments were early and on time and no interest had ever had to be added. The only things really bringing my score down are that I only have the one open account so that’s a negative effect each month that’s not changing and the few derogatory remarks. I wonder how to accumulate more open accounts. Now that my score has grown from around 428 to 650 I am able to apply for more credit cards, real unsecure cards will be a more beneficial account to have and now it’s an option with a score that makes me eligible but I wonder how good my chances will be while filling out the application due to the fact that when it asks about employer and income I have nothing to put on there other than Im unemployed and i have no definite amount for my yearly income. Can I just put down what I withdrew from the trust last year as my yearly income and say self employed or do they look into it enough to verify it? And what’s the best way to pay accounts in collections? I have a Capitol one debt from a secure card in 2014. I simply stopped using the card one day when the balance was 0 and they sent it to collections for 171$. I didn’t cancel the card or owe money so I can only think there was some penalty for not using the card for a period of time but don’t know. Should I look into why this charge accumulated and dispute it or should I just pay it. I assume I have to contact capitol one to find the specific reason and then the collector not capital one to pay it. If I decide to just to call right now to pay it should I haggle the amount down and if whatever is agreed do they automatically contact capitol one and let them know and will it then be automatically removed from my credit account helping the score go up. Also why is it only on my Equifax and not trans union? Will it affect both scores. And why are some things only on one credit account and some on both and some things show as the same thing and amount but from different collectors and then some show all the same info and two times on the same account. Also of all derogatory remarks one is capitol one, one is sprint, which I consider true but the rest are mostly hospital bills. Is either one more harmful or once sent to collections I’ve noticed sometimes the hospital bills have been removed on there own but Im not sure if they get replaced or if they are removed for good after a period of time. Is it harmful to haggle down and pay the account off at a low cost instead of paying the full asking amount when they report it to the original company and is it better to make payments or straight out pay full amount?
I would file a credit reporting dispute over the Capital One account. Depending on the outcome, I would then pay it off. Settling that small a balance to save money is not all that common. Capital One is not going to remove the item from your credit reports.
I would settle the sprint account and get it updated to show paid.
I would settle the medical bills for a savings wherever possible. Check out this video about negotiating medical debts before you get started. Paid or settled medical collections do not hurt your credit like they used to. And once an account is to the point it is with outside collection agencies, there is not much of a difference between the account being updated to show paid in full, or settled for less, so I would go for the cash savings.
It is normal to have some things show on one credit report and not the other. The credit bureaus do not share with each other necessarily. They rely on the furnishers of the credit information to push the information to them. Capital One, or others, simply may not be pushing that information to all credit bureaus.
Hello Michael, thank you for all that you do! I’m afraid I am making mistake after mistake and not sure what else to do and came across your posts in google. We entered into a credit counseling program and AMEX Platinum was one of the accounts accepted. The account was current/never late when entering the program. The account had a debt of 17,000 for which AMEX and the credit counseling program agreed upon a monthly payment plan to repay that amount as listed for the full amount). Come to find out AMEX had the debt in 2 different buckets, the 15,000 pay over time bucket and the 2,000 pay now bucket. Although they never reached out to us once looking for payment, nor sent it to collections (and we didn’t catch it as were we naive and trusting), they flagged the 2000 as delinquent and finally a write-off/charge off (even though the money they received through the credit counseling program they applied to that debt 1st and they marked it as write-off once the debt was paid in full). The credit reports show AMEX payment history as either “good” or “NR” across all 3 reports over that time. I have filed disputes with all 3 bureaus, called the credit counseling program coordinators and have been calling AMEX non-stop… I’m not getting too far… AMEX agrees something is off depending upon the dept, credit counseling is basically “sorry, can’t help”. The early return on Experian shows “remains” with Outcome: Remains, Results Due: 11/27/2016. Calling AMEX CVR or CBR, (not sure which it is) multiple times has gotten a manager review who has now added to the notes it has been passed to the concerns dept? where he is waiting for AR/AP line items for further review. I keep getting “call back in 2-3 days from them” and I feel like I’m against a clock that I don’t know what happens when time runs out. I have a 30 year credit report and this the the 1st/only negative on it, from trying to do the right thing no less… and although I now finally understand why it happened, I don’t think it is right and hope to have it reversed. Any ideas?
~B
How many years back did the charge off occur?
What financing goals do you have in the immediate future?
from 6/06 through 7/15 the account was always current, no “lates” or “missed payment”. When we entered the credit counseling program the account was current/up to date, just debt owed against it. So in 7/15 the credit counseling program and the creditor agreed to a repayment plan for the entire debt at a reduced interest and fixed payment… as stated in the welcome letter from the creditor “this will not impact your credit history in either a positive or negative way while the accounts heading into the program by the counseling program showed the entire amount as one debt (including the 2000) . From 7/15 to current we have made every payment through the program on time. The 2000 was flagged by them as delinquent in 12/15 and a charge-off/write-off 9/16 (although they had received over 5000 in payments during that time). My 1st knowledge of any of this was 10/16 and I began calling the creditor filing disputed shortly after. Our initial checkups in 2015 with the credit counseling program said “all is well, your doing great, stay the course”. We learned about this because we were looking at a home refi. My report shows 30 years of positive credit history with no lates/negatives, ever. Like many others, medical put us in a really bad situation and we saw this program as a way to “do the right thing”, pay what we owe in a manner that worked for us allowing us to maintain our positive credit history. If we would have received any notice in any manner from anybody that something wasn’t right, we would have addressed it immediately… so eliminating this negative account has become our primary financing goal and revisiting the refi (we were denied due to this “recent” negative mark) would follow.
I would file a credit reporting complaint with the CFPB against AMEX depending on the outcome of what they are looking into right now for you.
Let me know how things progress.
That will be my next step, thank you!
I opened my dialog with AMEX on 10/28 and filed disputes with all 3 bureaus on 10/29. AMEX keeps telling me to “call back in a few days as they investigate”, and I do. I believe they are investigating and hoping they work with me but it is difficult to know for sure. Are their any time frames that could pass while I work this that could make things even more difficult than they currently are, or just stay the course for now?
If it were me, I would wait for what AMEX does to conclude your current dispute.
I called every 3 to 4 business days throughout the month, spoke with many people across several departments with all businesses involved and invested a ton of time. The last supervisor who reached out to me from AMEX verified everything I had claimed across all parties involved and worked the corporate maze in addition to making the corrections on my credit report(s)… many lessons learned. Thank you for your help and input!
Hi Michael, I stumbled upon your extensive list of posts on this site about about an hour or so ago. I find them to be very insightful! So ahead of my question/issue, I wanted to say Thank You on not only my own behalf, but I’m sure many others as well. Now my situation….
As of November 5 2016 currently my credit scores are…
Equifax -592
Transunion-600
Experian-607
I’m 23, and from Ohio. (Mentioning my state in case there are relevant limitations associated). My background and credit report summary….
▪4 credit cards
Chase- $475 used of $500 limit (opened February 2015)
CapItal One-$190 used of $200 limit (opened August 2011)
$1475 used of $1500 limit
(Opened December 2013)
Crédit One- $565 used of $600 limit
(Opened June 2016)
▪Retail card
Fingerhut , $119 used of $700 limit (opened September 2016)
▪Auto loan just under $20,000 taken out
in July 2016.
***All of these accounts are reflecting a “paid/never late” status. Credit utilization is currently at 82%
2 derogatory accounts
1.A JCPenney Crédit Card with a $300 limit..
I got this card in November 2015. Maxed it out by December. But paid it IN FULL before the close of 2015. I then used $120 in January. Lost my job, which I explanned to them. They gave me time. Unfortunately 180 days after the due date I had just got hired with my current job. Unfortunately, it was already charged off and sent to collections. Despite my constant verbal culommunication with them for the first 60 days…I have since paid the collection agencyclopedia IN FULL. They agreed to remove the collections activity from my report. They followed through with the their agreement and my updated report reflects that. However JCPenney did not remover the account via my dispute the bureaus, but changed it to a “Paid in full, was a charge off” status.
2. This one is simply a utility opened in my name without my knowledge. Back in 2011 and reported as charge off in March of 2012. It was never paid off apparently for a mere $17. I am working on a police report since they said even with a payment they won’t remove the collection/derogatory activity from my report…without a an identity theft claim.
Between 9 and 12 hard inquires reporting.
So with my background insight. My issue is my credit score is fluctuating between 595 and 605 amongst the 3 major bureaus. I had tried to apply for a small personal loan(1,000) and I was declined byou every Avenue from sites like opploans to my local credit union. I had also attempted to get a Best Buy and Walmart card and was declined for both as well. I know my utilization is higher than the ideal <=30% and my score could be better. But I can't seem to understand the constant decline even for a Discover Secured Card….many of them are holding my dereogatory accounts to be the reason for decline. Literally, no one will approve me of the mere 4 apps I put in between personal loans and both store cards. I can't seem to understand why. Am I missing something here? Mind you only one credit bureau is reporting the utility bill. So presumably the majority of lenders according to their declination letters have pulled reports showing only the JCPENNEY card amongst my several other accounts in Perfect standing, never late. I have considered writing a letter of Goodwill with hope of removal. Any insight on this would really assist me in a few extra hours of sleep at night. Again I Thank you in advance. Lastly, I apologize for the extensive comment.
– KP
That utility bill and a paid JC Penney collection are not the problem from my view. The credit utilization and amount of inquiries are.
You are going to need some patience and time.
Let the JC Penny collection item be what it is, a paid collection.
Dispute the $17 account like you are.
Pay down your balances to under 30% on each account. How long will that take you?
Do not apply for new credit for the next year.
What is your ultimate goal with building your credit?
Hi Michael. My current credit score is 557. It went up 14 points after going down 47 points from me applying for credit. I have student loans that were the only good account being reported on my credit. After applying and being approved for 2 secured credit cards, I applied and was approved for 5 more. The new credit brought the age of my credit down from 3 years to 1 year 6 months. I am paying everything on time and making sure that less than 30% usage is being reported on my statements as I know all my statement closing dates. Now I have 8 accounts in good standing. And 12 in collections. 2 of those accounts are repos. 1 is 6 years old and the other 4 years old. Overall, most of the collection accounts are 3 years or older except for 4. I’m wanting to get a 10k loan but need to get my credit score up to atleast a 620. Any advice as to the best way to go about this.
If it were me I would look to resolve the old collection accounts. And depending on my credit goals, and when I want to achieve them, I would focus on the most recent collection debts. I may let the really old ones fall off in a year.
What effect does freezing a credit card have on my credit score and what effect does closing a credit card have on my credit score and what effect does being an authorized user on one of my mother’s credit cards have on my credit score? I have 7 credit cards in my name (2 have a zero dollar balance) and 1 where I am an authorized user. I want to apply for an installment loan that will be less than 18% apr to consolidate 3 credit cards that are over 23% apr. Also, is it true that I should utilize 7% to 50% of every open credit card limit every month and pay in full every month to keep my credit score high? And adding up all of my credit card limits, what percentage of my income should those limits be even if I am not using the entire limits, or does that matter?
The impact of this and that on someones credit is unique to that person. No one has your credit profile.
Closing an account that has nothing but positive information could hurt your credit if it is a well established and older account. But that may not be the case on a newer account.
What do you mean by freeze an account?
Being an authorized user can help your credit, but by how much I cannot say. You can also be harmed as an authorized user.
It is not true that you need to maintain between 7 and 50 percent utilization each month to maintain your credit score.
I am not aware of any scoring model that factors your income.
Thank you for your reply, Michael. This is the article that talks about credit utilization, to which I thought you might be able to add or second: https://www.creditkarma.com/article/CreditCardUtilizationAndScore
Consumer lenders do look at debt to income ratio but usually don’t share their ratio with applicants, so, again, I thought you might have some knowledge on that that you would share – whether they look at credit limits (potential debt) or only actual debt.
Credit Utilization is not unimportant. It has a huge impact. But you do not have to be hyper concerned about it each and every month. You simply do not need to use every card every month to maintain your credit score.
Thank you for replying and for the information.
Hi Michael, wondering if you could give me some advice on how to climb up out of the mess I’ve made of my credit. I graduated college 2 years ago and have been employed full time for all of that except a few months. My report looks something like this:
2012- $440 charge off from loan company.
2012- $850 charge off from furniture financing which I recently paid off in full.
2015- $380 charge off from capital one
2015- $360 charge off from capital one
2015- $472 charge off from MasterCard
2015- obtained a car loan with a co signer for 3000.00. Have paid on time every month since. No late payments.
2016- obtained small 500.00 loan to help repair credit. Lost job and fell behind. I am currently making payments on this but remain behind close to 300.00.
I also have student loans in the amount of 37000 that I have yet to start paying. My credit score is currently in the upper 400s which is terrible. I work hard and would like to be able eventually to buy a new car with a low interest rate and quit renting to buy my own home. I just don’t know where to start to fix my bad credit. Also just to let you know I have over 25 inquiries on my report. I know that was dumb but I fell for the percentage off the stores
Offer when you apply for a card. This has also hurt me. Please help with any advise you may have. Thank you!
I would save up in order to settle the charge offs first. I would not apply for any loans right now. Not until all unpaid collections are updated.
How long until you can save up half the balances owed?
Hello sir, I have some questions for you! My wife and I have recently been hit with daughters medical bills and my moms funeral, both which we paid for. Our credit scores are both in the 700 range, but are considering letting her new car go, we are obviously wanting to do this right like turning it in ourselves and attempting to possibly work something out with the bank! We have two credit cards with small balances and always pay on time. I need some advice! Can we speak over the phone? This is much easier for me?
I got your voice message Adam, and left you a message back. Give me a call on Monday and lets go from there.
I have 4 collection account and my credit card balance is $600 ($900 credit limit). I applied for a montage loan and was told to delete the collection accounts and bring my card balance down to 25%. Total comes out to $1500. If I pay them off and lower my credit card balance how soon can i see improvement on my score. 572
How old are the collection accounts on your credit reports (when did you start missing payments)?
Who is reporting them now, the original creditor or a collection agency (include name of company)?
How large of a home loan are you applying for?
Any ideas on how to best resolve a repo post bk7? We made a bad finance decision really fresh out of bk7 due to desperate measures, and the car ended up going back relatively quickly. We are really trying to resolve this, but with little to no luck.
How much is the deficiency balance?
The balance is just under 3300.00
I often negotiate deficiency balances in this situation for 40% or less. Can you pull that amount together?
Who is the finance company? When did the repossession and auction occur? If you are dealing with a third party collection agency now, who is that?
Company is Reliable Auto Credit and no 3rd party. Repo and auction happened about 3 months ago. Bk7 discharged last January. Right now 3-4K isn’t do-able.
I would save up and settle for 30 or so percent with the third party this lands with later. You do not have the cash flow to work with right now anyway, and the deal will likely be better as this debt ages.
I lost my home in foreclosure in April 2011. It’s still showing on my credit report as an open past due item. Is there anything I can do to change this and improve my credit score? Thank You
Is the foreclosure the only negative item on your credit reports? If there is more, post an outline of all that is negative. Include whether or not the account has been resolved or if it is unpaid.
What are your credit scores currently?
Equifax 705
Transunion 667
One other item, I cosigned on a motorcycle for a friend in 2009-2010 that was repossessed, credit report states “Account Removed”
The foreclosure will be on there for 7 years. It sounds like it drops off in 2018. You can get financing, including a new home loan, even with the foreclosure, if it had been 3 years. Your credit scores are in shape enough to allow for that.
The repossession appears to have fallen off too.
What is it you want to get done credit wise that you are concerned the foreclosure will hold up?
Would like to bring my scores up, especially the 667 which shows as fair. I only have 2 credit cards, tried to upgrade my Macy’s account and was declined.. I have a Visa that I owe $650 and limit is $5000. Thank You for the information. Guess I could be in a lot worse shape. Thanks again. Vicki
I have recently started paying off my credit report. I am far in debt. I have 35 medical accounts which are $75 a piece some a little more. I have 5 credit cards that I owe the hightest is 1700 on one but I am working with the bank and making payments on that one. I owe tmobile, att, verizon. I owe 2 utility companies that are 900 a piece and a I just paid off my furniture I owed which was a judgement for 700. and will be paying off another judgement for 450. I allowed people to use my name with cellphones and stuff and it has cost me. I am working on paying down my charge offs. Is it better to pay the credit cards first or the other ones? I know the judgements need to be paid first. And by the 1st of September the judgements will be paid. So should I pay off the utilites or the credit cards next?
Utilities do not often sue for collection where credit card banks and debt buyers do. I would focus on the credit cards, then move on to medical and utility bills.
TMobile, ATT, and Verizon sell to debt buyers that can sue, so I would start with those utility bills first.
I recently paid off all my collections that shows up on my credit report. The weird thing is but I have heard this is common is that Out of the three reporting services (Experian, TA and Equifax) Some show certain ones closed and others do not.
Is there a way to ensure that all three get the information and my score starts going up. The Derogatory remarks are the only negative things on my report (its a huge one of course) and was told once these close my score should go up quite a lot in 3-12 months and want to make sure this happens. Could I contact the ones that are not showing these accounts closed yet or is it better to wait awhile to let it all shake out. Thanks for your help.
Review this article about disputing incorrect information on your credit reports.
I went to refinance my home and the bank refuse me because my score was below 640.currently I am at 586. So they told me to work on my credit and pay some charge off I have but then someone else told me to pay my credit cards because my charge off were from 2014. What do I do?.
Post a reply with who you owe, how much, and when you last paid on the accounts. I can help you from there.
From June 17:
I’m 26 years old. I purchased a 2013 Ford Focus, with Ford Motor Credit to finance it. The vehicle was totaled in 2014, and our insurance company paid the remaining balance of the loan minus $917. I didn’t realize that we still had a balance, received no notices or statements in the mail, and did not follow up with Ford Motor Credit to make sure the full balance was paid. Now, it is marked as a derogatory account on my credit, as of 4/15/16. I have been in contact with a debt collector, and I verified with Ford Motor Credit that they sold my debt to this company. The debt company has agreed to settle my debt from $917 to $600, and upon receiving payment, they said they will send a confirmation to Ford Motor Credit’s Recovery Service. I asked the Recovery Service if the derogatory mark could be resolved or removed from my credit once paid, and they said that it would show as paid and be closed. While I don’t want to have any outstanding debts, I just want to know if it’s worth it to pay, if this will help my credit at all or if there is anyway to negotiate better terms?
Update: I settled with the debt collector for $600 on June 26th, deciding to resolve the debt as best as I could and moving on.
Thanks for posting this update Theresa. Did your credit scores go up with the 3 bureaus? If so, by how much?
Basically after years of being in situations due to family issues I have the means going froward to take care of past collections which show up on my experian report so after reading your inspiring blog posts I called all these collection people (Mostly Midland Funding) and I was able to pay off all collections except for one for roughly 50% on the dollar which I was quite happy with.
My question is now that I paid these in full so to speak and also will have a judgement satisfied and taken off the books should help my credit score go up. I know this is a bit of an open ended question and has many factors but thought would be something you can answer. Thanks again and I have to say since reading your posts it has really motivated me to get things straight and I think you are correct that doing it yourself basically yields the same results? Thanks again.
Everyone’s credit scores will improve differently after settling collection accounts. One huge variable that makes up the difference is whether you have positive credit being maintained while you were dealing with the collections. This is usually going to be home, auto and student loans, but can also be credit cards.
How many open and on time accounts do you have on your credit right now?
How many collections (no resolved) do you have?
I had 11 collections all paid off and also that included a judgement which will also be satisfied and removed. As far as current cc I really only have a debit card through my business account.
Do you have auto, home or student loans? If not, it could be a year plus before you can climb back to good or great credit, which can involve deliberate steps to improve your situation too.
what deliberate steps do you recommend.? I did open a discover card with is secured and they told me it is treated as a regular card. Any other suggestions would be appreciated.
BTW I do not have any auto, home or student loans.
Deliberate steps are some of the obvious, like paying all things on time every time, but will often also include taking out something like that Discover card you opened, buying a piece of furniture over time (one that you need, and not just to build credit), and if it make sense, even buy a used car to rebuild credit.
Many of us just need time to heal from collection accounts, because we have maintained other positive history, like a mortgage, auto, or student loan. If we have none of those things ongoing, we have to rebuild from scratch, which can mean time combined with opening accounts in a patient manner.
OK. Will keep on things and let you know the progress. My realistic goal was 12-18 months. The hard part is finding an apartment because of the credit score. They are so picky now a days especially since the mortgage crisis because so many people are renting.
Check out my article about renting with poor credit.
Mr Bovee…. could you please read the statement below that i was recently forwarded by a good friend of mine that works with lawyers that help people with credit issues. is the item about the vantage score true? the reason i ask is someone recommended to me as an alternative of using a credit repair company to write the collection agencies now that i have paid all my collections to ask to have the collection removed due to special circumstances. is that realistic?
This is good news for the consumer as the potential negative score impact from a collection account will not last forever. And, perhaps the best news, the most recent version of the VantageScore credit score does not consider collections that have a zero balance. That means once they’re paid or settled (and then updated at the credit bureaus) they will no longer be considered.
It is something that will get better over time.
Vantage Score is not widely used. FICO is used more often, and they have FICO 9 now that also does not factor paid collections. But we are talking about credit scores here. Renting a place is not always contingent on your credit score, where automated underwriting for a home loan will more readily focus on scoring (if all debts are resolved).
We are approaching a new era in credit reporting. By next year this time there should be even more developments. I would focus on the work you are doing, and ignore the siren call of credit repair companies.
I was just foreclosed on by PNC…although all signs indicated that my short sale offer was going to be accepted. Was not to be for reasons unknown. My next major concern is the deficiency that PNC will be left with. I also have a small HELOC on the property with Wells. So, two lenders that will be looking to get paid. I am seeking legal council about neogtiating my debt amount. If I owe, $100K to PNC and $50K to Wells….what is the likelihood they will work with me on reducing the amounts? Both banks see my personal finances…I cannot pay those totals….if I could, I would have kept the house. Why did they foreclose? I got divorced years ago and recently remarried and had to relocate. Keeping the home was not possible. Moreover, I have been upside down on the property as well…the house is worth about $100-150K less than what I owe, so even loing term, the house was a losing proposition. Any thoughts/feedback?
If you can meet your states means test to qualify to discharge the PNC and Wells Fargo debts completely, I would suggest chapter 7 bankruptcy as the least expensive option to deal with the situation.
If you cannot do chapter 7, call me for a consult about what settling might look like for you at 800-939-8357, ext 2.
Hey, my name is skyler. I am just a few weeks away from applying for a house loan. I now have only 1 negative item on my credit and that is a charge off on a vehicle. I have the funds to pay it but was worried that if it updated it would just hurt my aplbility to get the loan. Any comments or suggestions ?
How much is the collection balance?
I believe it’s around $600.like I said I have the ability to pay it. Just worried about it updating,
It is possible the unpaid collection from the repossession will prevent your loan approval, so paying it is likely the path to loan approval. In other words, you want the update to your credit reports even if it dropped your score a little bit temporarily.
Would you suggest I apply first before paying it ? Just to see what they have to say ?
If you are going to pay in full anyway there may not be harm in it. But if it were me, I would resolve the debt first before applying.
Michael, In June of 2010, my vehicle was repossessed. On my credit, I owe 4K as a delinquency payment. The original lender no longer has my account; it is with a law firm in South Carolina where I reside. This company has never contacted me. I am getting ready to purchase a home and my lender would like a letter from the company, stating that the account has been settled. A quick couple of questions. Am I beyond the SOL date? And should I call the law firm and try to get them to come way down on a one time pay-off? I was looking at paying a small percentage, especially if the SOL has expired. Thanks for your help.
The SOL to sue on the debt in South Carolina is 3 years. If it were me, I would be careful to negotiate everything on the phone and not submit anything in writing to the attorney. I would also consider waiting for a bit before I try to negotiate if my credit reports were already pulled to see if I qualify for the loan. See this video for more: https://www.youtube.com/watch?v=QpdDks73QUw
Settling for pennies on the dollar is not as common an occurrence as I would like to see. Who is the current debt owner (if not the original finance company), and who is the collection law firm?
Michael,
Thanks for your reply. The original lender is Ford Motor Credit Corporation. and the law firm is Clarkson Law Firm LLC out of Colombia, South Carolina. According to my lender, I need to have the car removed in order to purchase the home. I am in the final stages of purchasing the home, and this is the final hurdle I have to jump.
Michael,
I just watched the video.. So, in that scenario, I am going to have to pay the Collection company the full amount on a six year old debt. Is there anyway I can still bargain the collection company down? I was offered two typed of loans. A 100 percent loan and an FHA Loan with 3.5% out of pocket. I would need to come out of pocket 5900 dollars for the FHA. What is your advice. Should I still try to bargain with the collection company for the 4,000 or get the FHA Loan?
thanks
Todd
It was good to connect on the phone Brian. You need to resolve the debt regardless, and I hope some of what we talked over helps you. Looking forward to an update.
Recently in bankruptcy, no way around it, and then foreclosure.
Here’s my credit history: 22 years of no late payments whatsoever, One credit card, clear and clean, no debt on it. Only first mortgage, equity line of credit, and car payment, no other debts whatsoever.
After filing: One account with 2 months behind, another with 1 month behind. Car is current but listed as in bankruptcy (still making payments, going to reaffirm).
FICO score now: 521.
Why did it drop so much?
Now I need an apartment and nobody will rent to me.
Bankruptcy clobbers your credit. Then you had a foreclosure afterward that killed it the rest of the way. It is going to take time to bounce back.
I have an article up that will interest you about getting an apartment with bad credit.
I had an investment property where the lender (Bank of America) foreclosed and title transferred 8/8/12 back to FNMA. On 4/1/15 the servicing was transferred the servicing to Seterus who is still sending me statements since 4/1/15 on the exact same mortgage amount (not deficiency balance). Apparently they are not aware the property has been transferred back to FNMA at auction back in 2012 and even reporting it on my credit report as being in default with principal balance of the exact same amount. I have contacted them and they are saying they show no such thing and according to them this is a valid debt. I have contacted an attorney who advised I can possibly sue due to a FCPA (Florida Consumer Protection Act) but I really dont want to go through a long drawn out process, I just want this over with since I am trying to buy a house within the next 3-4mnths. How do I rectify this and who do i contact to get this removed/deleted/updated?
Sometimes it is necessary to file an action to get a collector to pay attention. If you have tried to resolve this with Seterus or Fannie Mae, but with no success or interest in correcting the issue, I would probably start by filing a complaint with the CFPB.
I am working to improve my credit. I am tired of avoiding the phone calls and the embarrassment of poor credit. I have 3 judgements and several accounts in collections. All these are mostly small amounts under $1000. I have one judgement for $2500 from capitol one that is going to come off my credit report in May of this year. I have some tax money that I would like to use towards paying off my debt. Should I pay off this judgement? Why haven’t’ they gone after me for this money since getting the judgment? I have worked at the same place for 20 years. If they will eventually garnish my check I would rather just pay it off but If I could use that $2500 towards other bills I would prefer to do that. Should I pay off this judgment or pay off several other small debts instead? Thanks for your help.
Some states do not allow garnishment. What state are you in?
When are the non judgment balances set to drop off your credit reports from age?
The Capital One judgment comes off in a couple months, but how long until the other judgments do, and who are those judgments with?
You do want to come up with a strategy that resolves the judgments. They are just growing with interest and will keep you from other goals like a home loan or a refinance.
What credit goals do you have immediately?
What amount of money can you set aside monthly to build up more of a debt settlement war fund?
Thank you so much for your time.
I am in Colorado. I believe Colorado allows garnishment.
I misread the date of the judgement falling off. Capital one is listed as charged off and will be removed 6-2016. The judgement isn’t removed until 5-2018. The other 2 judgements are set to come off 11-2018(cavalry portfolio $1100) and 5-2017(medicredit $1300).
Nothing else is coming off within the next 2 years. My wife has several smaller balances ($1000-$2000) that we are slowly settling.
Our goal is to buy a house in the next 2 years. I have around $5k right now and am saving 2-300 more a month. I am really confused about the judgements. I don’t understand why they haven’t’ come after me for the money. Once again thank you for your help
It is a bit odd that not one of the judgment creditors has pressed the issue with the extra ways they have available to collect.
Given the details I would suggest you stop trying to settle non judgment debt and focus on the judgments first. Circle back and tackle the others afterward.
I would look to settle all judgments at the same time (in the same weeks or month) and target roughly 50% as realistic for each. You typically will not get a home loan with unresolved judgments regardless of whether they show on your credit reports or not. But you can succeed with your credit goals with paid/satisfied judgments.
Those judgment balances have likely increased with interest. Do you know what the court granted as far as interest on each? You could need more money than you have now when you factor that in along side half off settlements.
Hello Michael,
I had a Check n Go Installment loan back in 2011 that went into default halfway through and they would not work with me to resolve. They have never contacted me. Then September 2015, without notice, a collection shows up on my credit report showing check n go as the original creditor.
I have contacted the collection company over and over asking for validation of the debt. They tell me they will mail to me and have not once received any correspondence from them. I contacted check n go, and they refer me back to the collection agency. I have disputed with the bureaus and they say they confirmed with collection agency. How can I get this removed from my credit? it appears they do not have any way of validating and they also told me they bought it from another collection agency, from whom it have never heard from.
Should I report to CFPB?
If it were me I would likely file the complaint with the CFPB. It may force them to get the documentation to further collect and report to your credit, which would not change your situation. But if they cannot, it could result in the deletion.
Hi Michael,
I am currently investigating getting an FHA loan for a property but I have had a significant decrease in credit score I don’t have a ton of overall debt but i would like to increase my score as soon as possible to change my living situation My current credit score is 559 (transunion) 569 (Equifax) via Credit Karma.
I have to two accounts in Collections
-BestBuy / CitiBank for the amount of $876.00 (which I just paid in full to Midland Funding Collections about a week ago.)
-Progressive Insurance for the amount of $161 (Credit Collections / Currently Disputing.)
There are 2 Credit cards that have closed and marked derogatory
1. Capitol One $2,271.00 (Limit 2$,000)
Payment Status: Collection / Charged Off
Last Payment: Jun 22 2015
Closed: Sept 16 2015
2. ELAN Financial Services $5648.00 (Limit $5,000)
Payment Status: Collection / Charged Off
Last Payment: Jun 22 2015
Closed: March 1st 2015
I also just paid off a Kay Jewelers Credit card in 14 months. 2 of those months having a late payment of 30-59 days late reported.
Within the last 6 months I have had 2 late car payments (30-59days) with my credit union and 1 late payment of a personal loan (30-59days.)
With Auto, Student and Credit Card debt I am looking at about 32k. I am a school teacher in New Jersey and pretty secure with my job.
What you think my best plan of action should be as far increasing my credit score?
What is a realistic time frame of obtaining a mortgage through FHA?
Thanks
I would settle the Elan debt targeting a 40% settlement or better. I would look to settle the Capital One account for 50%. You want to have any unpaid collections showing as resolved before you apply for a home loan with FHA. You do not have to pay in full, and the damage is already done to your credit, so saving money is often a priority.
Pay all of your other loans on time.
Get anything that is not accurate or complete corrected or disputed off (like what you appear to be doing with Progressive Insurance).
Ideally you want your credit score to be 620 when you apply for an FHA loan. You will want a 3 or more percent down payment. How long until you can save up to settle the 2 credit card collections? How much loner after that will you have 3% saved up for a house in your price range? That is the clock you are working under.
Hello Mr. Bovee,
I had a VA mortgage loan that was short sold. The Mortgage company I used was my credit union (Navy Federal Credit Union).
My payments were up to date prior to the sale. The VA paid the difference which was less than $61,000.00. However, on my credit report it says the account was paid in full for less than the full balance. When my credit report is being pulled it is saying, “00039 Serious Delinquency”.
I don’t think it is fair that NFCU is reporting this on me. I could understand if the VA reported the information. However, VA does not do that. Is there anything I can do to have NFCU correct this?
The loan went through NFCU and they are who would normally show up on your credit reports whether the account is in good or bad standing. The NFCU reporting in your situation is normal and reflects the short sale.
If I am misunderstanding this give me a call and lets go over the details on the phone. You can reach me at 800-939-8357, option 2.
Hey Michael,
I have participated in a section of you site regarding settling credit cards. I now settled all my cards but one. I am planning on settling it in the next month or 2 if I can. I also had 2 low limit credit cards from Capital one that I was late on but never got charged off. I paid those off so my utilization of 1500 is 0%.
My main concern now is raising my credit score and being able to apply and be accepted for credit cards. According to CreditKarma, my on time payments is at 78%, my credit card utilization is at 51% (payoff of 2 capital one cards wont be seen until next month),and derogatory marks is at 1 (the last collection I have to settled). Based off this info my credit score is showing 474.
After the utilization goes to 0% and i settle that last card, what do you think it will go up to? How can I fast track and get my score back to 600+. Should I request a limit increase on my capital one cards that I just paid off? Should I get a secured card? I’ve heard some people say they got their score up 200 points in 6 months. Is this possible, and if so, how?
Thank you for your time,
Jonathan
Getting your credit score to increase quickly will work out differently for each of us because our reports are made up of different data points. With what you shared, I do not think asking Capital One for credit limit increase will lead to any meaningful bump… not when you are paying down your credit utilization, as that leads to the same thing.
The secured card is not likely to help much, or at least not in the time you want it to. You already have open revolving accounts through CapOne. You were able to keep those open right?
How long have you had those CapOne cards?
You appear to need time, and the resolution of all debts in collection. Will 6 months lead to the 600’s for your credit score? Hard to say. Have you received your actual FICO scores or are you relying on what CreditKarma says?
Hi Michael,
I am trying to figure out how to get my credit to 620 so I can qualify for my VA mortgage.
These are my current FICO scores:
TransUnion FICO4 (says mortgage score) is 601
TransUnion FICO8 is 590
Equifax FICO5 (mortgage) is 605
Equifax FICO8 is 615
Experian FICO2 (mortgage) is 677
Experian FICO8 is 678
In Jan. 2013 I missed 2 payments on my mortgage and Wells Fargo put my house into pre-forclosure status. I tried to pay the 2 late payments but couldn’t because they added almost $5,000 of lawyer fee’s. They took all of my information to find out what options were available. I was told I could not refinance because my income was too high.
They said the only option I had was either foreclosure or a repayment plan, so I chose repayment. After completing all the paperwork, the first payment was not set until May, and the last Oct 13. I made triple payments during this time and completed the repayment.
My credit was marked as delinquent during the ENTIRE 11 month process. 8 of the months are marked as 120+ days late.
In Jul. 2014 we sold our home, not knowing our credit was ruined. Now we’re about 28 months past the last repayment and the last 6 months my credit seems like it’s just stuck where its at. From July 2015 to now, Jan. 2016 my equifax has gone from 607 to 615, TransUnion 587 to 590, and Experian 675 to 678.
I do not have any collections.
My only installment loan is my car loan, I had 2 late payments both show as 30 days late, in Dec. 2013 and Jan 2014.
I have 1 secured credit card for $2,000 that I’ve had a little over a year. No missed payments, I use it for gas and some automatic charges and pay it down to around $100 every month.
I just found out my wife is pregnant and I’m hoping we can get into a house. Being so close to the required score of 620 for VA is there anything else I can do, or is it just patience and time at this point?
Thank you,
Robert B.
Patience and time are part of nearly any credit score improvement, and it will be the case here too. But I would look to establish an unsecured credit card, and have it reporting for 6 months at least. Capital One is often one of the easier cards to get approved for with your credit profile. The rate and credit limit may not be great, but its a start.
Where do you bank?
I am retired with ssi of 1430 and pension 0f 2100, I want to get my fico score to 700, it is now at 440.
I had two bankruptcies , a foreclosure, and two repos………..what can I do…..
When were your bankruptcy filings and what type did you file?
Are any of the debts owed still unresolved or were they all rolled up into your bankruptcy?
If not rolled up in your BK, or more recent, when did you last make payments and what are the balances owed today?
Hi Michael,
I am confused about whether I should file Chapter 7 Bankruptcy or start trying to pay my debt back one account at a time. Up until November 2013, I had great credit. I was injured and disabled for a year and was unable to pay anything. All of my unsecured loans were charged off, my car was repossessed and the new balance was put on my credit. My home was almost foreclosure, but I was able to make a payment and bring it back current in the nick of time…though it still shows 12 months of late payments. I have fully recovered from being hurt overseas and I an desperate to get my credit back on track. The amounts I owe currently are below:
Repo’d vehicle : 25,000 balance after auction
Bank of America : 4979 c/o
Capital One Bank USA: 2190 c/o
Chase Bank: 2025 c/o
Discover Card: 3107 c/o
Macy’s: 270 c/0
Neighbors Federal: 2142 c/o
Pelican State Credit Union 5084 c/o
Dillards: 583 c/o
Diversified Consultants :Direct Tv 535 C/A
Portfolio Recovery Ass : 1449 (Citibank)
2 judgements (doesn’t say from who) 1016, and 2025
—November 1st 2013 were the collective dates of last payment—
I don’t know what the best route would be at this point. I am qualified for Chap 7 BK, but I dont know what would be the best option. Any advice would be greatly appreciated.
Thanks –Ike
Given the amounts at issue I would start by talking with a bankruptcy attorney about chapter 7. If you learn something about chapter 7 that would prevent you from filing, I would then look at settling your debts off one by one. Call me for a consult if you want to pursue settlements at 800-939-8357, option 2 rings to me.
You may need to be prepared with 15 to 20k for the settlements (over time).
Hi Mr Bovee,
I recently filed bankruptcy chapter 7. I know that student loans are not dischargeable. After bankruptcy finalized, private student loan that previously stated charged off is now active again, same company, with payment due. I am starting to receive phone calls again to collect, but had not heard from them in over 2 years. How do I tackle this? The negative reporting has now started over. I have not received any letters or statements stating that they would like their money again. I’m in New Jersey. Can a private student loan be negotiated?
You can negotiate and settle many private student loans. You can call me at 800-939-8357, choose option 2 to ring me. I can get into the details of your situation and make some suggestions.
We are currently looking to move & sell our home / purchase a new home. However, I have a charge off on my credit report from Bank of America’s Gold Option Loan. It has been sold to Portfolio Recovery in the amount of $22K, and the date of last payment is Feb 2013. I fell victim to BOA’s scam of this consolidation loan – as they sold it to me as a 5 year consolidation loan, but that was not the case. After 7 years, the balance did not even go down! I feel into rough times and have not paid since Feb 2013. BOA originally contacted me to originate the loan via phone, and I do not remember signing anything. Is there any way to dispute this and ask for “written proof of loan”, since I do not think they will have anything signed by me? Is it beneficial to contact Portfolio Recovery to make payment arrangements since loan is so old, or will it even improve my credit score at this point? My current mortgage, car loan & credit card loans are all 100% paid on time and have been since 2013.
Thank you!
Call me for a consult at 800-939-8357, option 2 rings to me. I want to go into the details a bit more about your sale and move. There are strong reasons to be methodical about what you do towards that goal, while trying to negotiate with PRA. And no, you will not likely succeed with a dispute about this debt on your credit. Sending PRA a dispute just alerts them to your having a goal to accomplish which can impair negotiations.
I do not recommend payment plans when your goal will be to get a loan approved in the near future. Settlements are far more conducive with your situation.
$30K revolving line of credit attached to a foreclosed property from December, 2011 in Reno, Nevada.
How can I get this off my credit report? Debt appears to have been sold a few times. Have not been sued,
You may not be able to get the old HELOC off your credit, but you could get it updated to show resolved, which can often help you accomplish whatever credit or finance goal you have.
What is it you are looking to accomplish?
Who did you owe originally and who is the last known debt collector?
Dear Michael,
My name is Andy I am 61 yrs of age disabled married my wife just got a letter in the
The mail from Mandarin law group, llc that a civil case was filed in the king county Superior court where CACH LLC is the plaintiff and my wife is respondent, a date was set for a trial October 3 2016. the problem is we don’t know what debt this pertains to.. what should we do i am disabled my wife is not working at this time. How do i find out about what debt this is? She also is thinking about filing bankruptcy. please advise.. Thank you.
How much is the lawsuit for? Are there other debts she has outstanding besides this one? How much unsecured debt is their total?
Hi Michael,
I’m hoping you can help me. My husband and I are looking to buy a house early next year (January/February 2016) but I’m worried that my credit report will not pass the mortgage pre-qualification. We’ll be applying on my income only. He is self-employed but has only been at it for about a year and we’ve been told that his income won’t even qualify until he’s been doing that for at least 2 years.
That being said, I have a full time salary as well as freelance work on the side coming it at about $80k annually. I stopped paying my Chase credit card back in 2011 due to a combination or low funds and bad financial advice. I received a judgement on the account in 2013 and was making small payments to the court. In April 2013 I received a letter from the Chase legal dept saying that it was partially satisfied and instructing me to stop making payment and that they were no longer attempting to collect the debt “at this time”.
It’s now 2 years later and the charge offs recently reappeared on my credit report. My credit score dropped 30 points in 1 month! It shows “no data” for months and then all of a sudden the charge off is back. I sent a letter to the court requesting early removal of the judgement (haven’t heard back yet) and I called Chase today to see about paying the remaining balance and getting the charge off removed. No luck … he reiterated that they are not making any attempts to collect the debt and that it would not remove the charge off. He also told me that paying the balance wouldn’t necessarily improve my score or credit report.
Is there ANYTHING I can do to get the charge off removed? Is my credit score going to continue to deteriorate every month when the charge off is reported? What’s my best course of action? My score (Experian) is currently at 667 and we’re looking for about $250k mortgage. I’ve been googling like crazy but it’s all Greek to me and the advice I’ve read as far as getting information removed from my report is proving unsuccessful.
– Jenn
Actually not completely sure when the judgement was issued since I was definitely paying it for over a year before I got that letter in April 2013.
Give me a call so I can dig deeper into some details JL. You can reach me at 800-939-8357, choose option 2.
Have all the Chase account information at the ready when you call.
Did you ever get a 1099c on this account with Chase?
Thank you for your time, generosity and knowledge. It is extremely helpful and truly appreciated.
Just an auto loan. Really trying to get approved at an manageable rate for now. I know a few loan officers, but they would like at least 620, ideally 660 or higher.
When the three derogatory marks drop off next year, I anticipate a decent jump and would refinance at a much lower rate. I can handle 10-12% in the short term, but 20%+ would really limit how much I invest.
I’m may ride it out another month to see if any positive changes apply.
If I could wait out the new car purchase for a few months I would too.
I has debating opening a credit card or two, but have read varying opinions if it would help or actually hurt my score.
My student loan is the only debt I have (other than utilities and the like) which do not appear on the reports. My debt to income ratio is really pretty good. And only shows $92 TOTAL monthly going out.
1) Do (or how can) the bureau’s look at DEBT to INCOME ratio (without actually knowing one’s income?
2)Why would my report show my loan as DEBT to CREDIT, which according to the email they sent me today, is credit utilization? Considering any loan taken out would immediately show a 100%+ ratio. Does that have any bearing on score?
1. That is calculated more by an underwriter reviewing a loan application. The credit report is part of the story lenders will use, whether algorithmically determining debt to income, or in a hands on review.
2. I would have to see what you are seeing in order to comment much beyond it does not sound like the student loans should be hurting you at this point now that they are changes, but that perhaps the prior reporting of a 13k monthly payment due is what caused whatever is happening now.
Are you going for a home loan or anything like that in the next 12 months?
600 to 598 back to 600. I have five collections. Three old ones that were paid and three are slated to drop off next January, including one of the not paid for a credit card debt of $4100.
The only other negative is a past due credit card for about $2800 which went to collections in 2013.
I have probably 6/7 positive accounts, but currently no revolving accounts. Mostly paid as agreed loans and cc’s. Got rid of all cc’s
What I cannot figure out is: they show my installment loan category (which is my student loan only) as a 255% debt to credit ratio … I thought debt to credit only applied to revolving account according to Fair Isaac?
Credit utilization is what is calculated with revolving consumer credit cards.
Debt to income is what the student loans will impact, and more from an affordability factor (like how much howm loan you can takeon when considering all other debts and monthly payments).
The unresolved collections are hurting you. And I do think you need more time from just recently getting things updated (including that $150 collection).
It would be good to start rebuilding with a secired card with a reputation for converting to unsecured after some use and timely payments. I like Bank of America for these ($500 to open usually), but talk to your current bank to see what they can offer along these lines.
Checked my credit report through Equifax and found a lower score than expected and a couple negative past accounts and one big error.
Paid $150 for an account that was in collections I had forgotten about when I moved. They would not delete the account, but I paid it anyway.
After that … my score dropped two points. Was told this might happen, so no biggie.
More troubling was the reporting errors on my student loan. The report showed I was $13,000 past due and was paying $1700/month. In actuality, I am $0 past due and only pay $92/month.
After jumping through various hoops the past two months to rectify this, it has been corrected.
I get a notification from Equifax saying my score change has placed me into a higher score band as a result. When I log in and check it … my score went up a WHOPPING TWO POINTS!!! Back to were I started.
How can a change of $13,000 past due to $0 past due, from 120 + days past due to 0 days past due and a change from $1,700/month to $92/month only be worth a two point increase??? I called Equifax, total waste of time. Lady in India or wherever just recited what was on my account. She said scores update daily as report changes apply. Is there any lag time, or am I stuck with a two point change?
What were the exact scores prior and after?
How many other active positive trade lines are on your credit reports?
Any other negatives than that one debt collection and the student loan?
There may be a hurry up and wait element to the updates helping you gain more score, but hard to say without looking at the reports.
Hi Michael,
I am in the process of building my credit and wanted to know if a charged off credit card can count against my cc utilization. I had a first premier card that was changed off in 2011 and noticed that it is being reported on my equifax report as open and $235 over the $300 credit limit. It is being calculated in my current utilization (178%)and effecting my score. How should I handle this? The weird thing is it is showing closed on Transunion and not effecting that reports utilization or score.
Thanks
Charged off credit card balances are still owed and those dollar amounts do indeed factor into your debt to income ratio for lending and credit scoring purposes.
Negotiating and settling those collection accounts for less than what is owed is often the most cost effective way to resolve situations like this in order to put yourself in position to improve your credit.
Fico scores from experian 615 equifax 603 and transunion 612 Fico auto 8 is 629
Dealership pulled credit last weekend and showed 583 with co signer had 620 and no offers.
Collection account with Verizon approx 1,100 – paid off 2 weeks ago for about 700. 1st delinquency date 9/2014
Collection account for CC settled early this year. 1st delinquency date 6/2014 * this shows that I disputed this on my report because I asked them to remove after I paid it, does that look good or bad?
Collection account for sprint for $400 paid in full 5/2014
Collection for medical bill $214 – from 9/2012 * I recently disputed this bc I didn’t know until I pulled my report, do u think they will remove this and does it look bad? I haven’t received any bills or notices.
Car balance of 4,500 interest 1.9% have about 15 months left on it. @309 a month.
Government Student loan of 20k in deferment until 2018
Revolving is showing I have balance of 4,700 with limit of 5,500 these are credit cards – always made at least minimum
My income is about 2,900 per month and another person in household with about the same sometimes more monthly income. Can cosign if needed. Co signer has 450 monthly car payment about 26k left got approved thru ally last year at 2.9%. Without a co signer
No rent or mortgage payment.
I will get a lump sum of about 5k in a month or so.
I want to finance a truck for about 35k-40k and have 5k to put down I want to purchase within about 2 months.
How should I utilize that 5k to best improve my credit? Pay off cards in lump sum? Do you think I will get financed with a decent rate? Will I need a co signer for income? I would like to finance longer like 72-84 months to keep the payment lower but I’ve noticed it seems like the interest rate is higher on longer terms, is there a way I can figure out a median. While I’m at the dealership can I tell them to give me different rates depending on the term so I can see because that difference in interest rate sometimes makes it not worth extending it to 72 months etc
How soon is it that you are looking to get the new truck loan? You could use 90 to 180 days separation from any paid collections. If the medical debt does not come off, you can pay it off or settle it. Paid medical bills now impact your credit much less than in years past, or not at all.
You could use the cosigner if that is not a big deal. If all other bills are affordable, you could even use the 5k you get to potentially put a down payment on the vehicle in order to improve your financing package (not always possible). You may want to using half the money to pay down credit cards so that you are under 50% utilization, and the other half as a down payment, or some variation thereof. It is good to have less than 35% to 20% utilization on unsecured credit cards in the months leading up to any financing goals.
You should absolutely hit the dealers financing staff up to put together a loan that works for you. 6 year loans on a depreciating asset are not a great deal. The higher the interest rate, the less so. Depending on what the loan will look like, and depending on the cosigner particulars, having one would appear to improve the loan that you get, and probably a 60 month loan or less if you can swing it.
Michael,
Miraculously the previously stated loans took care of themselves and dropped off this past week. Now I have a question pertaining to a student loan that we settled in 2013 (it states it’s due to come off in September of this year) although when we settled it was supposed to have been closed there is a balance of 7300 showing. I have called and was told it hadn’t been closed and they would close it now and it would be off by the 16th of June. when it wasn’t I called back and was told even though they show no balance they have nothing they can send me and to put a dispute in then the credit company will contact them and they’ll then take care of it, but could take up to 60 days. So my question is do I dispute it through the credit bureau or cfpb? Thank you
Given the information you shared you will want to dispute it with the credit bureaus, and not the CFPB.
Send any disputes in writing and use certified mail return receipt.
Please do post an update with the results.
Michael thank you for all the information. I will send our dispute letter in tomorrow.
now I have a question on my credit score, which I pulled from experian today.
It showed a 560 which was much lower than I thought it would be.
My experian credit score shows 2 late payments, time since last 67 months,
1 collection account. my credit report shows 2 negatives and 8 positives.
U.S. Dept of Education which was paid in full June 2013, but shows a balance
of $7356 last reported jan 2015 which I’m going to dispute. and a medical charge from June 2009 that I never received a bill for. It’s held by Wakefield and assoc for $734 original amount $554, scheduled to be recorded until March 2016. should I call and settle this and if so with the hospital or Wakefield?
What do I need to do to get my score higher.
Thank you for your time
Michael,
sorry for the repeat question.
should I call and pay off the medical dept or let it ride?
it’s due to come off March 2016, if I pay it will that reset the
7 1/2 year mark? original amount is for $554, but now showing
a 734 balance. I never received anything on this and thought my
insurance had covered it, which I’ve called and asked for a summary.
Thank you
Paying or negotiating and settling the medical bill for less will not reset the 7 year reporting clock. At this late date you would call Wakefield and Associates to settle up the old bill.
Of the 8 positive trade lines on your credit reports, how many are being paid monthly today? Are any revolving debts like credit cards?
So it looks like the loans that came off my experian are still showing on transunion. why wouldn’t all three credit reports be the same? Should I file a complaint? the us education is now marked as paid and closed with the June 2013 date but not dropped off the reports. And in working to clear up our debt and be debt free we do not have any current revolving credit. we are currently renting and would like to buy a home in the near future. Also in February before clearing up my report I applied for a credit card and was turned down with a score of 651, which I’ve stated is now 560.I’m afraid I’ve totally messed up getting any type of loan now. Any suggestions on a course of action? Thank you again.
I am missing something in all that you have going on. It may be better to call in for a consult so I can get a better understanding of the particulars before I make any suggestions about next steps.
You can reach me at 800-939-8357, press option 2. I am around most weekdays until 6 pm pacific.
Michael thanks for all your advice.
All the previous negatives have fallen off my credit reports, with the exception of one, which leads to my question. we had a car for our business that was a voluntary repo, with the last payment October 2008. It is listed on equifax as RF, opened august 2006, closed/bad debt. It was on all credit reports early 2015 than removed on july 31 2015 and then added back December 31 2016.
is this normal and/or legal to drop than add again 5 months later or should I contact the CFPB?
Thank you!
Who added the repo back on (name of company reporting the negative item)?
Is it back on all three credit reports?
What is the date now showing for this item to drop from your credit reports?
The company is Fidelity Bank. It’s only on Equifax and I’m not seeing any drop off info.
It’s listing as:
Open date August 16, 2006.
Status is open-collection/charge off.
Balance $8568
Last reported Dec 31, 2015.
Acct status – Open
Closed date – —
Date last payment Mar 1, 2009
*This is how it appears on credit karma. When I pulled all 3 credit reports thru experian it shows as closed. Bad dept and placed for collection. Charged off acct.
Thanks again for your assistance.
I would indeed consider filing a credit reporting and/or debt collection complaint with the CFPB. Let me know what happens with that if you do file.
The alternative is to dispute this with Equifax and see what they do upon investigating. If you do not get the right outcome from Equifax you could then file the CFPB complaint against Equifax and the furnisher.
i had a business that i lost and a home that was forclosed on, both in florida.
i pulled my experian credit report in february and it showed seterus to fall off in may of this year and wells fargo to fall off in June of this year. so i pulled the report again today to see my clear report only to find that the dates are no longer on there and also the past payment boxes are not showing. the seterus is now showing a foreclosure date of august 2012, opened in 2/2006. i never received any official notice only a notice that the property had been purchased by the lien holder, auroa lending in 2009. i’d stopped making payments in 2007.
so now I see nothing is off my report as of yet. and i can’t find my report from february showing the dates.
can a lender change a date like that and what steps can i take to get it fixed. also if a report is to come off in june is that at the first of the month or do i wait until july to see it cleared?
Thank You
The dates you provided are too many. If basing how long any of this should appear on your credit reports using the stop payment date of 2007, now would be the latest time frame I would expect the unpaid mortgage to remain.
There are situations where a public record may stay longer on your credit report, than the original creditors collection derogatory. It is not clear from what you shared if that is what is happening, but I doubt it. Public record items on your credit reports do not tend to inexplicably change, but collection accounts can.
I would file a credit reporting complaint with the CFPB. Post an update with the results of that and lets go from there.
Hello!
I am trying to purchase a house and I have a few negative things on my credit:
A car loan that was charged off for $3,250.00
3 accounts totaling to $850.00
What I wanted to know is will the car loan company take a settlement for a lower amount and how much I was looking to give 1300.00 the other 3 accounts I am going to pay off but not until I receive in writing that they will remove them from my credit. By the way the car was not in my possession it was stolen, which I reported someone else had it they have the police report and they faxed me over a voluntary repo form that I signed so they could go find the car which they never did. The guy disappeared as well as the car. I also did not have a job at the time so I could not pay the remaining balance.
How long ago was the last payment made on the car? Is the finance company still reporting a balance owed on your credit reports, or do they shoe a zero balance (which means they sold the debt)?
Who are the other debts owed to? Pay for delete is not as common as we all would like it to be.
Enrolled in dept management program in 2009 to pay off $50,000 in credit card debt (4 different cards). It was to be paid off over 5 yrs, making about $900/ month payments. We did well paying off debt, however during the 5 yrs did have some months we couldn’t make the full payment. The debt management program would take whatever money I sent in, and they would pay the creditors of their choice. Well BofA ended up having a past amount due, and then every month, I would make a payment, but the money would go to the other 3 cards,(so they wouldn’t get late) and a portion to Bof A. Eventually the whole debt was paid off about 6 months longer than initially planned. However, today I got my credit report, and see that Bof A “charged off” the account 1 year ago for $6000 (12/2013) It is now listed as paid in full, account closed. However there was 1 year it was “charged off”.
I was a bit surprised I was never notified of this. Plus, the whole past year….I did not ever get a credit card statement from them. I did call once, and they told me they don’t send them when the account is so far past due. They did then send a copy, however I didn’t’ get any more. At the time, I didn’t care, since the debt management program was paying them directly.
I am wondering if I could get the “charged off” off of my account? Is that unheard of, or is it a moot point since the debt is paid? Should I just not worry about it, and just focus on good payments going forward? I was so proud that we paid off $50,000 in debt, but was deflated today when I read the report. Credit scores range from 640-706
You will not get BofA to remove the charge off. It is really not going to be a big deal to your credit scores in another 6 months, and less still another year after that.
The fact that the charge off shows paid on your credit reports is good enough.
What I find missing from credit profiles of those who complete a debt consolidation plan with a credit counseling agency is depth and recency. Those revolving accounts were all closed 5 years ago. You are likely missing open revolving account activity, which is easy to add with a low limit credit card, or two. You are missing long term credit depth that you probably had going for you on some of the debts you consolidated because all those accounts got closed.
Time will help regain more credit depth, and absorb any blow to your credit score from the charge off.
Thanks for providing great information. Hoping you can advise me on my situation:
Financial goals: 60-90 days: Finance private party auto purchase $3-4000 cheap car. 1-2 years – Buy a house.
Credit/debt situation: FICO score is 660. 8-9 derogs stemming back to 7/30/2008 (first late payment). I haven’t paid anything since. Total of ~$15,000 in open collections. All credit cards. Recently started payment plan on back taxes. Does not show on CR.
In 2013 opened 2 secured cards. Keeping balances low.
Total debt: $10K IRS (will pay in full in 2016). $15K misc CC/collections. $23K current auto loan GM finance. (wife’s car)
Current HH income: $130K
QUESTIONS:
1. Most of my derogs have been sold/transferred and show they will be removed from my CR in the next 2-6 months (May-October). The big question for me is, since I live in Illinois how does the SOL work? Looks like it could be 5 or 10 years depending on the type of agreement. I only plan on paying the collections/credit card debt if it is necessary to get a mortgage. What are your thoughts?
2. Since I have so many agencies and items to deal with, is there a service you know of that can help be more structured and efficient about this entire process?
3. Any thoughts on the auto financing? What are the chances I can get approved or something with open collections? Or should I try the Roadloans or Wells Fargo route? Or just wait until October when most derogs should drop off?
I know that’s a bunch so that’s in advance for any counsel.
1. You mentioned all of the debts are credit cards, so open accounts. They are passed the SOL in Illinois now. If the home loan goal is not for a year or two, I would just let these all drop from your credit reports (unless any are judgments already).
2. I would not hire a credit repair or any type of debt relief company. You do not really need any professional assistance with any of the debts, when you are probably a good candidate to just wait things out.
3. I think things look good for the auto purchase. In a few months it sounds like some of the collections will come off your credit reports. Auto lending is not as tight as mortgages. I do not think a few collections on your credit will hold you back. You already have the GM loan that is current. You could possibly get a better interest rate waiting until all the derogatory items come off. What is the interest rate on the car loan you have now?
First off thanks! What a great service you’re providing.
1. Yes, all of my derogs are old credit cards that have been charged off or sold to places like asset acceptance and the like. None of them are judgements. Question on this, so after the derogs fall off my report, the mortgage underwriters will not be able to see this debt at all…on all 3 bureaus? Is it that simple?
2. Got it, thanks.
3. The current rate on my GM car is 13%. on this part, I’m curious on the sequencing and where to get financed. Should I wait until most of the derogs are gone and then do the refinance first or apply for the used car financing?
4. Do you have any recos on where to apply for private party financing with mediocre credit?
Thanks again for the feedback.
An underwriter doing some deep dive manual review of your loan file could potentially see some old collections that no longer appear on your credit reports. But I doubt it would change the outcome of your loan approval. They are looking for unpaid judgments, or unpaid collection accounts that show on your credit reports.
Unless you are in a really big hurry about that extra car, I would just wait for the collections to fall off the credit reports. You could potentially be in 0% for 60 month well qualified borrower territory. I would also refinance your existing car loan shortly after too.
You can shop competitive offers through many financing companies.
Thanks Michael.
In regards to the underwriter. I’ve been told by loan officers that they will do a manual review and find the unpaid collections. Is that just not the usual case? Are you saying that the underwriter will only do the manual review if they see the collections on the credit report? What triggers a manual review versus just pulling the 3 CRs?
Anything is possible. But I am fairly confident those unpaid collection accounts that are too old to remain on your credit report would not hold you back from qualifying for FHA type of loan underwriting. Similarly, I would not expect any surprises over this issue from the likes of Wells Fargo and others.
Whole bunches of people with similar scenarios have been getting mortgages approved since the home loan market tightened.
That make sense…I really hope you’re right. It will be at least one year so it’s along time but I will let you know what happens.
One other question is my wife’s credit. She has a few derogs on her CR too. Same type of situation. Can I apply for the mortgage just using my credit or will they factor hers too. Her income is only about $20k per year so I don’t really need to use it to buy a $250k-$300k house? My income is $130 and $150 combined.
You can get the mortgage without your spouse.
Are her derogatory accounts dating back to the same time as yours?
All but one is from the same time period. So I’m thinking they would drop off, too? She has one more recent collection. We’re working on getting that settled.
Thanks again for all you do. Very helpful.
They should drop off around the same time. Review her credit reports and match the delete dates with when payments stopped etc.
Your welcome. Help spread awareness of the site.
I was and am still self employed my husband is on SSI since 2009. This 10 yr old debt for a car repossession with Ford Motor sold to a Virginia attorney who filed the judgement under Midland Funding for $3164 and expires 4/2016. I need to buy a house now and since they got nothing it has been resold to at least 3 other JDC’s. My credit score is 720. I am willing to settle for $500. – $1000. to get it off my credit but not sure they have the”‘assigns” to actually take it off when settlement is agreed on and don’t want to just open a can of worms. Also if I do speak with them can they then extend the judgement date because I contacted them.
You cannot reconfirm a judgment by talking to someone about it. The judgment can be renewed without any concern for what the debtor does or doesn’t do (unless you pay or settle it of course). Each state has it’s own rules for time frames to renew judgments.
You will typically not be able to settle, or even pay in full, and get the judgment off your credit reports. The court record is why the judgment shows up, not something a debt collector is doing. You can expect that the judgment owner files notice with the court that the judgment is satisfied, but be sure that is included in any agreement to settle that you negotiate, and get it in writing.
The judgment has gone a long time without payment, and that can often mean a really good settlement, but not always. The amount you can settle debt for can depend on a myriad of things. Offering 1000 dollars may be enough, or you may need to add to that.
I am not sure if that judgment amount you shared is what it says from 2009, but Virginia allows interest to be charged on judgments at 9 percent or the contract rate.
Thanks much. Since the judgement owner is the only one able to file with the court that it is satisfied once settled are they the only ones I should negotiate with verses any of the other JDC’s . I thought midland funding was out of the negotiating process since they have sold it.
I would start by contacting the last known legitimate debt owner that you knew for certain. It sounds like that would be Midland Funding? If they sold the legal rights to the debt, find out to who, and progress from there.
In reading these, I see that the objective is always to settle the accounts, which is reasonable because they are my debts. But after becoming sick, losing my $75k/yr job and having to go on SSDI, with a 2 year application process in the meantime and no income, I lost my home, my car, my credit cards and have unpaid medical bills all sitting on my credit which dropped my score to a 490, now still its only a 540, two years later. I want to repair my credit so that i can at least qualify for an fha home loan and not be relegated to renting for the rest of my life, but there is quite literally nothing I can offer my creditors. My income is hardly enough to care for myself & my daughter now. What would your recommended approach to repairing credit damaged in this manner and to this extent be?
Filing chapter 7 bankruptcy would wipe away most if not all debts. It is a more cost effective way to get debt relief if your debt totals are more than roughly 5 thousand dollars.
You can qualify for FHA underwriting currently if it has been 2 years since your discharge, and you have a 620 FICO. There are exceptions that would make this 2 year wait time and credit score minimum shorter/smaller, but most people would be waiting out the 2 year and/or 620 scenario.
Michael,
I wrote a long ways back and really did appreciate the help provided. It is a comfort having someone with experience in this area responding to everyone’s questions. I have improved my credit and taken care of many things over the last few years. I am, however, finding myself in a position where I hope you can lend a little more guidance.
We have the major things under control, but there is some lingering medical debt. Some of it years and years old and other things more recent. Fortunately I have always had medical coverage through work, unfortunately my wife suffers from an illness that nobody really has a great answer for and ER visits are a part of the equation. For some reason the medical plan we have at work has almost become a punitive thing when you go for urgent care, the more you go, the more they make you pay. That is the primary reason we’ve got anything spotty on our credit.
Well, 2 boys into college later – we were fortunate enough to qualify to co-sign loans for them, we get a note from the loan company saying because of recent accounts in collections on our account that we’re suddenly no longer worthy of being a co-signer. Our credit rating isn’t bad and we’ve got a variety of things (small to large) medical related that we haven’t been able to clear up, but it’s been that way for years. What I’m hoping you will have insight on is…
1- From a credit report standpoint, why are only a few things showing up negatively like this? we financed our house (land contract to purchasing on our own) last January and they weren’t there, but why would it suddenly be different in how it’s being reported?
2- I think my wife uses a free credit reporting tool and said that it showed 6 items in that state, the historical thing indicates we may have jumped from 2 such items to 6 recently. What it shows on the report is an amount, but is there a way to trace this back? A few are smaller and we could manage to put those on a credit card or outright pay them off.
3- My kids have stellar credit, but no work history. Is there anyway they can get loans (outside of the FAFSA stuff) independent of our woes? I just don’t want to be the reason their higher education dreams come crashing to a half. This may be way off topic for you though. 🙂
I moved your comment to a more related post about fixing credit reports.
My first questions are about finding out who the debts were owed to, and when the services were provided? Can you post the answers to that?
It is not uncommon for collection accounts that had not been showing on your credit, to suddenly appear after you apply for credit, like you did a few months back. Debt collectors use sophisticated programs to alert them to changes in your credit reports. These alerts may be why the additional collections appeared, but that does not mean they are legitimate. Let’s get to the bottom of that first.
There are additional options for your kids to look into through their college Student Financial Aid Services office.
I know the debts are owed to a local hospital who had turned them over to Money Recovery Nationwide … the services all show some time in 2014, from February and a few months beyond that. I’m pretty sure based on my wife’s regular trips to the ER that they are legitimate, we didn’t have much extra to cover everything and some of these slid.. there are some every year that have done that for several years now, it is just the first time they’ve appeared like this.
We were looking up other options for their schooling. I was OK with being a co-signer (kind of happy we qualified for that) but now that it could be in jeopardy I want to find other options for them. With any luck though I’ll have them thoroughly prepared for their lives and they won’t run into my situation without being prepared!
Just wondering if you had any additional thoughts based on my reply. Thanks!
Paid medical bills are not the drag on credit scores they once were.
How much are the bills?
How much can you put towards them monthly?
Can you come up with a source of cash to pay some or all quickly (sell a motorbike, collectible, etc).
The 4 of them total about $700 – one thought was to heap them on a credit card, although I don’t love the idea. No free/extra cash to do that quickly. I’d just prefer they not show up on the report and then I think I’ll be able to contact the student loan place and have them reverse their decision to not allow the kids to draw from that for school any longer.
I will probably still explore other options for student loans, but I like knowing they’ll be good for at least the next school year!
I reached out to the hospital and they suggested a call.. is that something I can have them remove from the credit report or do I have to go back to Money Recovery Nationwide? I also am worried that they may have a few more lingering bills and I don’t want to open myself up to those as well.. especially if I have to pay these off and will then need to work on paying that off the card!
You can sometimes get a medical bill in collection removed from your credit reports. Also, if you work something out and pay the hospital or service provider directly, not the collection agency, I have seen a few success with disputing the medical collection off afterwards.
Paid medical collections are not factored into your score like they once were. Some of the newest scoring models do not calculate paid medical debts into credit scoring at all, and soon we should see a 6 month window before unpaid medical debts can even show on your credit reports.
You are not in all that bad a shape all things considered.
Hi Michael!
I’ve been looking over my and my husband’s credit reports and I’m a bit confused. My husband has a repo on his report back in 2006. It’s been sold and changed hands a few times. The car was his ex girlfriend’s and she never paid a dime.. bad idea. Anyways, we haven’t been able to pay anything on since probably 2007 when I made a payment to the collector. When I looked TransUnion shows it as closed-derogatory and says Charged off as bad debt Profit and loss write-off in the remarks. However, Equifax shows open – collection/charge off with charged off account in the remarks. Can they still come after us? It also shows the date it was opened was June 2008 but last reported December of 2014. What does that mean? Since we made a payment to collections.. not enough to make it current since the car was long gone.. does that “restart the clock for SOL? I’m so lost… what should we do?
Thank you for your time!!
Is the original repossession from 2006 still showing on his credit reports pulled today? If so, who is the finance company?
What state are you in?
I have more feedback about the credit reporting strangeness you are seeing, but would like to the answers to my questions first so I can better target my response.
I have a student loan that I took out through the school (American Intercontinental University) for part of my tuition that my financial aid and private student loan I took out, did not cover, back in 1998. I went past due in late 1999 or early 2000 which makes this debt way past the 7 or 7.5 years. At the time that I took out the loan, I resided in South Florida and now live in NC. This debt has not showed up on any of my credit reports since 2008 and now I recently pulled all 3 of my reports and it is showing up on my Experian and Equifax with an original default date of June 2009. The school has refused to send me any documentaion with the original paperwork and loan agreement along with the original payment history showing the original default date. And it is not a collection agency that is reporting this debt, it is the school itself. I believe they are trying to re-age this debt and if I’m not mistaken, that is illegal. But since they will not provided the documentation how do I go about getting this off of my credit report because they are reporting a false original default date and disputing it through the credit bureau is not helping they just keep saying that the information has been verified. I also have a Sallie Mar account (now Navient) that is a private student loan for that same tine frane that was taken out at the same time for a part of my student loan that was not covered by financial aid and my mom was the co-signer on and she is now deceased. Both of these accounts are now showing as charged off and the Navient is scheduled to cone off next year 2016 but that would make my original default date back in 2008 which would not be true. I doubt both of these companies would let me slide for 8-9 years on payments. I also want to thank you for sharing your story , it has given me hope in my situation.
I also had posted a similar post due to fatigue from being up all day packing up my house after getting off of a 12.33 hour shift at 7am yesterday morning because I am currently homeless with my children because I was pad locked out of my house today after losing my appeal to the eviction on March 2nd. I had made an arrangement with my leasing office to pay my rent late (verbal contract) and the assistant manager filed an eviction on me any way but since I did not have the agreement in writing, I could not prove we had the agreement and the assistant manager of course denied we had the agreement when we went to court but I should of had 30 days to move because I have 30 days to file an appeal to the appellate court and they were not supposed yo be able to obtain a writ for the pad lock until those 30 days had expired which would have been April 1st. So I am trying yo seek legal advice to see if I have a case of my right to appeal being violated but I don’t really have the money for a lawyer right now. So now I also will have this judgment on my credit but I do not owe them any money because I had to pay the money owed in order yo file the appeal along with paying any current rent due to the clerk of courts until we went to court for the appeal. I also have a recent repo from January 2015 for a car I bought ( Infiniti M 35, 2006) and the engine started knocking about a month in a half after I bought it and I don’t think it was properly serviced before I bought it. Which led to a domino effect of things going wrong with a car I hadn’t had for two months yet. The finance company refused to pay for repairs and put that expense at the end of my loan. This is why I was late on my December rent because I needed the money for a down payment, which is why I made the arrangement with my leasing office before I did all of that, but now I know better. I will get everything and anything in writing from here on out.
But I do have student loans in good standing and they are currently in deffernent and I have a Capital One credit card and fingerhut account that is in good standing. I would like yo purchase a home within the next 12 months, that is my main goal with getting my credit straightened out. I have a good job that pays well and I just need to get my living situation straightened out which will be next week on the 26th and get another car, which I will pay cash for once I receive my tax refund. After that I can afford to settle and clear up any other debts on my credit history. Any help you can offer Michael would be grately appreciated. Thank you so much and I apologize for the extra long post.
I would start with filing a credit reporting complaint with the CFPB where you include all the attendance, loan and payment dates, and additional details. If you had not already disputed with the credit bureaus, I would have started there, but maybe have included written disputes to the school sent certified mail return receipt.
I assume those old ones are all unpaid private student loans?
Both of these loans are unpaid private student loans. All my other student loans are federal and in good standing. I did file the complaint with CFPB and am awaiting the outcome on that. Thank you so much Michael, I appreciate the guidance on this!
My husband took over the finances when I was diagnosed with MS and after 5 years I found out he had charged up 2 credit cards under my name. He stopped paying both cards in October 2014.i received a call from collections in both and one settled at 70% and the other I paid in full. Citibank is closed now and I will use the Bank of America for gas and pay off each month. My daughter is finishing her sophomore year of college and now I’m worried we won’t qualify for a loan. We took out loans for my son and will start payments in June. How will this affect qualifying for my daughter’s loan for August?
Are there any remaining accounts showing on your credit reports that are not resolved? Your credit will begin to repair itself from the events you mention, and how quickly may surprise you.
What are your credit scores?
How many positive trade lines are showing on your credit report total vs how many key derogatory?
I can offer more feedback with answers to those questions.
Hello~ I am trying to repair my credit. I came into some unfortunate circumstances in my life in 2011. I found out I had uterine cancer and needed surgery. This started my downward spiral emotionally and financially. I had surgery 8/2011, my company at the time incorrectly submitted my FMLA papers causing a delay of 6 weeks in payment to me. (I had to use my savings which wasn’t much) I had complications from my surgery which put me out of work for an additional 6 months. (1/2012) Even though I wasn’t completely healed, I went back to work due to finances. In 7/2012, I was laid off from my job which caused further frustration. (16 years with the company!) At this time, I was in pain, frustrated with life in general and gave up on my credit cards. I let them slip, my fault and totally irresponsible but at that time in my life, I didn’t care. I am now trying to correct my mistakes and move on with my life but my past is haunting me.
Here is what I am faced with now:
Chevron Gas Card: Original amount was $800- Midland Funding (C0llection Company) wants $1,271- date last paid 2011 but on my report it says 2013
Victoria Secret- Original Amount- $600 Portfolio RC (Collection Company) wants $1137. Date last paid-2011 but on my credit report it says 2013
Capital One- $3200- I don’t see a collection account for this one but I know it’s owed so this baffles me.
Harley Davidson- Original Amount owed $4,000- No collection for this account which is confusing.
Westridge Apartments – (Original Amount is $800- Dispute began in 9/2010- Kimball and Tirey, Attorney at law (Collection Company) wants $1,295- I believed I was in a secure financial place to help out a now ex-friend and she vacated an apartment that I had co-signed and paid the deposit for. They kept the deposit but said there was more damage. I asked several times to see bills or charges for fixing items but never received anything. So now I am on their collection hit list for the amount.
All of the above accounts have been charged off with the exception of the apartment and total collections is around $4-5,000. I have a good job now and can afford to pay off all of them but not sure how to go about it. I’ve heard so many conflicting answers it’s hard to tell.
Chevron sent me a settlement letter for $800 but if I pay that, will it show it is paid or settled? Do you think it’s possible to have it deleted if paid? And do I owe the original creditor also?
What date does the bad reporting begin and once it it sent to the collection agency, does that begin a new date?
Another question I have is, when I look at Credit Karma (I know they are not 100% accurate) my scores for Transunion and Equifax state 630 and 635 but when i paid for my experian score, it stated 548? How are they so different?
Is there any way I can get my self out of this and have a fresh start or at least begin a clean up? I would greatly appreciate any assistance on how or where I should start.
I have recently 5/14 purchased a truck ($37,000) with the help of my mom (she co-signed) and instead of paying the $625 a month payment, I pay $400 a week. She also added my name onto her credit (9/14) card and I haven’t missed a payment and actually pay in full if possible. Balance is 0 at this time.
The first payment you missed as you went into default is the starting point for how long these accounts will stay on your credit reports.
These collection companies that bought your debts, Midland Funding and Portfolio Recovery, should fall off your credit reports at the same time as the original creditor. But you do have to keep an eye on debt collectors showing a newer, more recent date. Part of the credit repair process is time, and you do not want to have this take longer because of inaccurate dates being reported.
Your Chevron card is no longer owned by the bank that issues and services them. Currently that is Synchrony (used to be GE Capital). Your account was purchased by Midland Funding. But double check something for me… is the there a balance showing as still owed by the original creditor on your credit reports, or does it show a zero balance?
When you settle with Midland you will not owe anything to anyone else related to this account. You cannot get Midland to delete this account from your credit reports. You can read about how pay for delete is possible in some situations, but it is really not common, and not in this situation.
Your able to repair your credit without getting the collections deleted. You will want to resolve them so that they update on your credit as paid or settled. It does not matter which really, so negotiating lower settlements for a lump sum payoff where possible is a good move.
Are Capital One and the bank for your Harley Davidson credit card showing on your credit reports? Are there still balances as being reported as owed? It is good that a debt collector is not showing up for these accounts, but things may not stay that way.
Anyone serious about credit repair that involves more than an account or two, or a single round of dispute letters, would be better off subscribing to a credit monitoring service where he details are real time and reliable. CreditKarma is fine for light lifting, but as you know, it is not always accurate.
Your adding new credit (the auto loan, and the authorized user) are part of repairing your credit. I would get the collections resolved before doing anything else to add credit. Once the collections are updated to show paid/settled for several months, you will be able to accelerate your credit recovering and may want to look at adding another account or two.
Long term, say 2 to 3 years, what are your credit and finance goals?
I just would like to give some encouragement to the folks on here and let them know there is light at the end of the tunnel.
My wife lost her 6 figure job in 2009 after the company went into bankruptcy. I had left mine earlier thinking she was safe so I could start a new business. Unfortunately the recession then came on full bore and I had to close the business after investing a good portion of our life savings. Neither of us could find work for nearly 16 months. During that time we blew through a 100K in savings and ended up being 90 days behind and barely holding on to our home and car and HELOC. Made settlements with nearly all our cards, in most cases we settled for 38% – 65%. The worse was AM EX and DISCOVER who sued us, but our attorney threatened them with bankruptcy and after some very tense negotiations we got them to settle and dismiss the suit for 85%. (incidently kudos to Bank of America and CITI cards. They were the most UNDERSTANDING and best to work with as was PAYPAL Credit/Bill Me Later)
Wells Fargo was a total nightmare. Entered their loan modification where simply reducing our 6.8% mortgage and 11% HELOC would have made us TOTALLY SOLVENT. The process was supposed to be only 60 days but it ended up being over 6 months, and we were encouraged to go 60 – 90 days delinquent in order to push the hardship case. In the last days we were told the modification was imminent, I talked to them at least twice a week, then suddenly after being told it was “any day now” we got a FEDEX envelope simply saying our Modification was denied and all delinquent amounts were due immediately. We were stunned….but the worse was yet to come….after having the wind knocked out of us we sort of felt paralyzed not knowing what to do. We ACCIDENTLY let the HELOC go 93 days….triggering an AUTOMATIC DEFAULT. When I realized it was 93 days, I got on the phone with them and explained what happened and begged them to allow me to make the payment, even clearing up the entire 90 days…..but they said TOO LATE, they CHARGED IT OFF!!!! And now they demanded the full payment. We eventually settled with them for a lower amount after help from family, but this left our entire situation in tatters.
Luckily that month we found employment though at half the salary we made before. We fought like crazy to pay of our bills, finally caught up the first mortgage and slowly improved our wages, though to this day we still make around 75% of what we did back then.
Our car was over 9 years old now and lots of issues. We literally begged our dealership to push a new lease through. Audi made an exception…but at a steep price…much higher interest and huge deposit, but it was the first step in our rebuilding process. Our FICO at the time was 580 because of everything that happened. (We never had less than 720 before this)
It took 8 months to pay off all the settlement payment plans (incidently I was the one that made all the negotiated arrangements with the CC companies except AM EX and DISCOVER) After the settlement plans were finished I turned to the credit we owed that was not settled and slowly paid off what I could afford starting with the higher rate cards.
It seemed like it would NEVER end, but slowly one by one they were paid off, including some personal loans. After 20 months our credit score got better each month. I subscribed to Equifax despite the high cost just so I could keep an eye on it. Capital One granted us a card with a $500 limit a few months after our settlements were done. Eventually that credit limit rose to over $2500 with increased limits every 6 months.
I NEVER EVER MISSED A PAYMENT…..24 months later our score was 635 despite all the CC charge offs from 2010 and 2011. We just refinanced our mortgage under the HARP program, it went fairly smooth and took about 60 days. I SHORTENED the amortization to 15 years at 3.5%
Finally we have exited the tunnel into sunshine. In the last few months our score has increased to FICA 685. We qualified for a HELOC and closed it. It is for emergency purposes only as we rebuild our savings. We are also in the process of buying a vacation home, barely qualifying but we did it because my score is FICO 740 now. (All the CC COs were unfortunately under my wife)
We are nearly debt free only owning the lease and the mortgage on our home and have tons of equity.,
Its like a whole new world now. Thought we like millions of others still are not making the salaries we did before, but at least now the burden of debt and bad credit is finally behind us.
You can do it!!!
Hi,I had many credit cards bills purchased I don’t know about them,I don’t know when I had those credit cards.Those bills are more than 13 or 14 years they are on my credits,I don’t know what should I do to remove them.Can someone please give me an advise?
When you say the accounts are that many years old, is that when you stopped making payments on the credit cards? Are the original credit card lenders still reporting?
What are the names of some of the debt collectors on your credit reports?
You can work to get old items removed, but I want to be sure what you have going on before offering more feedback.
Ok….on the student loan question. You cannot be in deferred if you are in default just because you go back to school. You have to actively get yourself out of default by consolidating or rehabbing.
Michael, So, I have settled all of my accounts. 8 in total. 7 directly with the original lender. One sent to collections. My first missed payment was in Jan of 2013. I settled 7 of them by Oct 2013 and one in Jan 2015. How do I improve my credit score now? Can I get some of the derogatory items off of my report? Can I hire someone to do this for me? If yes, who would you recommend? I have already applied for secured cards and have one old card from 2002. I have total 4 cards now and I have been carrying some balance on all cards and making payments on-time on all cards to improve the credit.
Congratulations on all of the settlements jag!
Pull your credit scores for me and post what they are. Get your actual ones that you often will have to pay for, if you do not already subscribe to a monitoring service. Include what your credit goals are in the next 12 to 24 months, and lets go from there on next steps.
I signed up for Experian. It shows my credit Score as 693. My Goal is 740 in next 6 months. Here is more info below:
Revolving Debt: $4,238.00
Revolving Credit Limit: $9,550.00
Revolving Credit Usage: 44%
Real Estate Debt: $142,763.00
Installment Debt: $0.00
Total Debt: $147,001.00
Negative Information
Accounts Ever Late: 8
Accounts In Collections: 0
Time Since Negative: 1.1 year(s)
Inquiries: 8
Oldest Account: 13 year(s)
Average Account Age: 5.8 year(s)
I am bringing the Credit Utilization under 30%, made a payment this month for the purchases over Christmas time. Also, The Citi account that I just settled, does not even show up in the report under listed accounts but it shows 8 accounts as negative in total.
Thanks, that gives a good picture. Other than the 740 credit score target, what is it you plan to do with credit and financing in the next 1 to 2 years? My feedback can be more than generalized if I have a clue about that.
I want to be able to buy a car later this year at a very decent interest rate. I also want to get a credit card with 0% APR for 12 months.
I cannot make any suggestions to get you over the hump on approval for a 0 percent introduction interest rate on a credit card. I would suggest waiting at least 6, and probably 12 months after the citi credit card settlement updates to your credit reports.
I think you have a really good shot at qualifying for a highly competitive interest rate on an auto loan around the same time as the zero interest credit card, and maybe even sooner.
Thanks Michael, So, there is no value in disputing any items on credit report, or signing up for a credit repair service for me?
Not much value in my opinion. If I were to focus on anything when hiring a credit repair company, it would be the most recent citibank account showing settled.
I do not think you have a shot at removing all of the settlements from back in 2013, and if you get a couple removed, it is not likely to nudge you toward your goals much.
Credit repair company prices are not all that out of reach these days. The only one I refer people to is Lexington Law because of the folks I have referred there having gotten results (some do not get any results though, but those that do make the reference possible).
If you do credit repair with realistic expectations, know that you could be throwing a few hundred dollars, over a several month period, at a maybe.
Michael –
I have learned quite a lot from reading all of the previous posts and have already taken some steps based on this information to improve my credit. I am seeking advice on a plan of action to address the remaining debt, including several collection accounts and a judgment. I understand that the SOL in Maine is 6 years, but am not certain just what that means for my specific situation.
First, the positives:
• Credit Union unsecured line of credit (overdraft protection) opened 8/2014 current $0 balance (used and paid off periodically) never had a late payment
• Capitol One auto loan opened 5/2013 current balance $14,000 spotty late payments until 4/2014, no late payments since then
• Credit Union unsecured installment loan opened 8/2013 current balance $400, never had a late payment
• Sallie Mae student loans, five total, opened 2012 with at least 12 months of payments recorded on each none late, closed 2013 (consolidated)
• Credit Union auto loan opened 2009 for $15,000, closed 4/2013 never had a late payment
Now the challenges:
• Two medical collections accounts placed in 2013, $60 and $75. Both paid in full 1/2015.
• Chase Bank credit card last payment made 2/2010, charge off balance $1,630, transferred to Cavalry Portfolio on 7/2013 which is now being handled by Gosselin & Dubord. A judgment was made against by default on 7/2014 for $1,630.
• GE Money credit card last payment made 3/2010, charge off balance $1,100, transferred to Portfolio Recovery Assoc on 9/2011 which is now being handled by the Law Offices of H. Schiff. A statement of claim was served to me in 9/2013, however no further action or correspondence has occurred since that time and nothing additional has appeared on my credit report.
• Federal Loan Servicing two student loan accounts opened 6/2013 totaling $27,000, currently in deferment as I am a student, however the last four months of 2014 show as late payments.
• First Premier credit card last payment made 2/2010, charge off balance $667, transferred to Midland Funding and I made just one payment in 2/2013. Current balance $517.
• HSBC Bank Best Buy credit card last payment made 4/2010, charge off balance $819, transferred to Portfolio Recovery Assoc on 9/2010.
I am not sure if I should reach out to attorney Schiff and try to strike a deal or if this will cause them to file a judgment. I realize I must have restarted the “clock” when I made the partial payment to MidLand. Should I be bargaining with them as well? I am also unsure of just how to go about contacting the agency that placed the judgment. Would it help my credit to make small payments on my school loans each month while they are in deferment? I do have a great job with decent pay and I’ve worked for my employer nearly 11 years. With that being said, I am a single parent student who also has a college student son. I need to be smart with my funds and can’t afford to settle all of my debt with lump sum payments. I would like to create a plan to improve my credit for a home purchase within about two years. I’m not doing this alone. I have a great partner who has impeccable credit and also has worked at his employer for many years; however I want to carry my own weight financially. Any thoughts or suggestions? Thank you so much for your time.
Have the two medical debts you settled last month updated to your credit reports to show paid? Also know that, depending on the credit score modeling used, small medical debts may not impact your score much, or at all.
Were you aware of the lawsuit Cavalry filed, or did you learn after the fact?
Regarding the Portfolio Recovery Group collection, have you looked in the court to see where the case stands today according to the records? Find out, and post an update. I can offer better feedback about your concerns with contacting Schiff from there.
Contact your loan servicer and ask what can be done about your loans showing as late pays while you are in deferment, if you haven’t already. If you have done that, what was their reply?
You can settle directly with Midland. Lower balance accounts do not often settle for as low as larger balance ones, but I would still target around 50 percent settlement with Midland.
You can settle the HSBC account for roughly 50 percent with Portfolio Recovery too. But hold off on any outreach there until you know more about the account they sent to Schiff to collect on.
In fact, post the answers to my questions above, and then let me know what amount of money you can pull together to settle all of these accounts over the next 3 to 6 months. I can sketch out a plan of action for each after I know a bit more.
Thank you for the prompt response Michael!
The two medical debts were just paid in the last couple of weeks and don’t yet show as updated on my report.
Yes, I was aware of the Cavalry suit as I received proper notice. I moved before the court date was set and did not receive the notice. I understand that a partial settlement appears the same as a full payment on the judgment on my credit, but how do I go about approaching Cavalry?
On the Portfolio collection for GE Bank, I contacted the clerk of courts today and there was no record of the statement of claim or any suit initiated by this agency (or the attorney on their behalf) against me. In fact, the copy of the notice of claim I have doesn’t have the Docket No. filled out and the clerk questioned its legitimacy.
As far as my student loans, they were in default until I became a full time student again at which time they were updated to deferred. I was just unsure if it made a difference on a future home purchase that I had so much deferred student debt and if it would help to make any kind of payment while in deferment.
I will receive an annual bonus in March for approximately $3,000 that I plan to use towards rectifying my outstanding debts. I know that isn’t much, but it’s all that I have for lump payments. I can also afford to make payments, if that’s an option.
Thank you again for your assistance!
I am going to ask a friend and student loan expert to share her feedback on the student loans reporting the default status, then going into deferment. It would have been better to get the loans out of default before going into deferment, or perhaps it may have made no difference at all. What options there are now for that, she will be better able to offer feedback for.
I think you have a good shot at settling all of the debts for the 3k you will have next month. I would call Portfolio Recovery Group and look at resolving the GE Money, and HSBC accounts, at the same time. Given what you have shared about your finances, and the parts that are visible to PRA from real time access to your credit reports, I would realistically target 50 percent settlement deals. You may be able to get lower, so certainly start there, but be prepared for roughly half.
Midland does not settle for the best savings on small debts, but I think you have a shot at 40 to 50 percent.
The Cavalry judgment I would target at 50 to 60 percent.
I would look to negotiate all of these simultaneously, even play one off the other in a short period of time, in order to get the best results. This way, when your credit reports update with paid or settled accounts, a debt collector you have not settled with yet will not view you as the willing and able payer that you are.
Given the outline of your debts and finances, I would not be a fan of payment arrangements on any of those debt collection accounts.
Okay! I’ve got a great start to my action plan thanks to you. Should I wait to begin settlement discussions until I have cash in hand? I know for certain I will have my bonus on March 13th. I have also read your post on the debt settlement process and documentation and wondered if being 5 weeks out is too far to begin the negotiations.
Thanks!
It is too far out in my opinion. If it were me in your shoes I would wait until about a week or so from having the money in hand to start making the calls.
Good Afternoon Michael, it’s been awhile. I am making headway on my settlements, slowly but surely.
No late payments since my last post! My student loans are now current; the small collection debts have been updated and closed on my credit report (though one of them wouldn’t voluntarily do it, I had to report them to TransUnion to have it fixed!), I’ve paid off the remaining balance on my small installment loan with the credit union; and was approved for a small credit line, zero interest credit card which I have used and paid off each month to add to my long term positive credit rating.
For the settlements – I negotiated Midland Funding to settle for just under 60%, which I am satisfied with…however it was a bear to get them to agree to send me something in writing (or electronically for that matter) prior to providing my banking info to pay. After 10 minutes of arguing, the representative finally gave in to mailing me a settlement letter.
I also got the run around with Chase/Cavalry, who eventually gave me contact info for an attorney’s office here in Maine, Gosselin & Dubord. I have had to call the office several times – never get return calls! Finally reached an individual who has taken my settlement offer of 50% to submit to “their client” for approval. The representative said a letter will be mailed to me within 2 days with an acceptance or counter. I am relieved to at least have made an offer! This process is much more difficult than I expected.
I saved the worst for last here. Portfolio Recovery has been awful to work with….It took several tries to get a live person to discuss my accounts with me and they weren’t very helpful with the negotiation process. First indicating that the two accounts I had with them were held in two different departments and that I would have to negotiate them separately, then advising they were both held with an attorney. PRA offered to accept 75% for the HSBC account, but I wouldn’t take it. I’ve received better offers from them in the mail in the past and just haven’t been in a position to pay. I did call the attorney they referenced, Howard Lee Schiff, many times. It was a recorded loop that I sat on hold for a long time, many times. I did finally reach a representative who was polite. They only offered to settle the GE account at 70% and indicated that the HSBC account was closed with their office and returned to PRA. Sheesh! Talk about circles! He offered to contact PRA internally and request the account be reopened so that I could negotiate with Schiff and not PRA. I am to call back in a few days to confirm this has happened. At this point I have not agreed to any settlement terms with Schiff, but I am thinking 70% sounds high? Is there any leverage when they hold two accounts? Thoughts on strategy to get that settlement amount down? Also, any tips on how to convince collectors and attorneys to send settlement confirmation letters PRIOR to getting my banking info?
Thanks for your continued help and sorry for the long post!
No surprise about dealing with PRA. I was just speaking to a gentleman this morning who lamented the same.
Here are some resources I want you to read through that are direct your questions.
Smaller balance accounts often do not settle for the best rates.
Getting the negotiated deals in writing before paying. As you read deeper in to the comments of this article, you will see that I do encourage you to use a mobile phone app to record your conversation and the outline of the settlement deal, telling the collector that you are recording and why.
50% would be my targets on the account(s) with the Howard Lee Schiff collector. How you get there will differ from file to file. Focusing on the hardship and the fact that funds are not only limited, may be used to pay other collectors, is some of the strategies I use in dialogue. There are also timing specific strategies I would encourage you to be think about when setting up to make your calls to debt collectors. Watch my video about debt negotiation timing with debt collectors.
Thanks Michael. I watched the video you referenced and read through the comments there and on the other topic links you provided. Very helpful. Question – the recurring theme is negotiating with collectors (such as PRA)…..do the same strategies apply to the attorneys that then take on the debt from the collectors? Is it better to negotiate with one over the other? I ask as Schiff had offered to contact PRA to reopen a closed account and PRA called today (I did not answer to allow time to come up with a plan)…..should I attempt to negotiate with PRA instead of Schiff?
On another note, I took out my current car loan about 2 years ago (when my credit was iffy) and have a really high interest rate – 10+%. Once my negotiation efforts are done and paid off and my credit has a chance to catch up (say 6 months from now), would it be beneficial to refinance that loan? I have a great relationship with my credit union and they are willing to work with me. I just wondered if adding a new loan/credit inquiry would be detrimental to my over all report if I was looking to get a mortgage in a couple years.
Thanks again!
If the attorney has not filed a lawsuit, the negotiation tips remain largely the same. If it were me I would negotiate each debt by itself, or one with PRA and one with Schiff.
I would want to reduce my car loan interest after the settlement dust clears too. 6 months may be long enough to get the credit score bump you want to have with your credit union. With your mortgage loan goals being a couple years out, you are way ahead of this. Do you happen to know what your credit scores are now?
Good Afternoon! Finally got all my negotiations done! PRA agreed to fax me my letter and once received I called back in and paid the agreed 53% – very pleased with that final outcome. The larger account with Cavalry (the judgment account) was settled at 68% and i am fine with that…at least they were professional and courteous to work with. Schiff wouldn.t budge below 70% and I just wanted it done. They agreed to mail my settlement letter, which should be received no later than this Saturday. At which time I’ll call and pay that one off……last one! Who would have thought this process would take nearly 5 months! Overall I settled my entire debt for about 64% of the balance owed and my credit score has risen from a 501 at the end of January to a 561 at the beginning of June. I have an old bankrupcy that will drop off this September as well as almost all of the original default credit cards that started this mess. By January 2016 I expect my consistent on-time payments, new credit card account and removed negative files will have made a huge difference. By January 2017 I’ll be in great shape for a mortgage (and have a decent amount of down payment money, too!). Thanks for all your help, it has made a world of difference. I’ll be sure to keep posting updates so that others can see how time and effort pay off. It was others’ positive comments that drew me in to begin with…..it is possible to recover!
Congratulations Tammy! I look forward to reading your updates, and thanks for pointing out that reading about other peoples solutions motivated you. That is really what this site is about.
Thought I would check in. Last settlement officially paid and the majority have been updated on the credit bureaus. Though, as with the negotiations, PRA updated my reports to reflect a partial payment was made (instead of settled in full) with a remaining balance due in collections. i had to dispute it with one of the bureaus and it has already been updated. Keep very clear documentation of everything! Portfolio Recovery Assoc was one of the collection agencies that initially refused to supply documentation of our agreed settlement. I would not give them any banking information/payment until I received a letter from them and now I know why!!!!! After all that work they could have bullied me into paying even more just to get my credit reports updated.
I’m also pleased to say that my score made another big jump to 596. Nearly 100 points in 6 months!
Here’s a question – if i submit a dispute with one reporting agency, say TransUnion, do the other agencies get updated once the dispute is resolved? (Another random note, keep an eye on your personal information as it is reported on the bureaus. I had a SECOND social security number associated with my file….one that I had never heard of…..not a spouse’s, co-applicant’s or my son’s. Very strange, but I had it deleted from the record!)
Again, thanks for all the help!
You will want to dispute anything with each agency separately. You should not expect any update one credit bureau makes to be reflected on the report of any other agency.
If you are so inclined, I would file a credit reporting complaint against PRA with the CFPB. As those complaints add up against them they will hopefully change the deceptive practice of continuing to report an amount owed that they agree is not.
Word of caution, do NOT agree to be a Trustee for a family member or friend without finding out if the person has or had litigation proceedings. I made that mistake. I got sued by a friend’s creditor , and never even knew about the years old litigation. It took sixteen months of effort by some lawyers – to get myself dismissed from the suit. Just got released all of a sudden yesterday , as I was preparing to sign off on filing bankruptcy.
1. Is this all I get/need if I pay LTD/Chase? “This letter is to confirm that we are hereby authorizing the settlement of the above referenced account for the amount of $1825 if paid by.. Upon receipt of this amount, your account will be settled in full. This letter and your cancelled check or other receipt will serve as your proof of payment.”
2. Where’s a “safe” place for me to keep money so that Amex’s attorney doesn’t access it again by enforcing another lien from their judgment? Am I correct in understanding that they can do that at any time that they believe there are funds in the account–and that they can ping the account to check it? Obviously using my personal bank account to keep money is not ‘safe’ in this regard: So far business bank accounts have been safe. Will that remain to be the case? They’d have to take special legal action like a lawsuit to access funds there that I control, right?
What about if the funds were in an investment account, at say Schwab, but in my personal name? Would that be any safer than in the personal account at Wells Fargo that they’ve now accessed twice?
(I imagine they may have access to see the balances in my linked business accounts at WF that are linked to my personal account… Do you think that would be the case?)
Thank you!
1. That will generally suffice to fix any problems later on, if any should arise. I cover settlement letters with some detail here: https://consumerrecoverynetwork.com/debt-settlement-letters-agreements/.
2. You should run your bank account concerns by an experienced debt collection defense attorney in your state. Generally, my experience is that business accounts tied to an EIN and not your social are okay. Keeping funds in an investment account may also be viable. But run that one by the attorney too.
I do not think the attorney collecting for American Express can see into the business bank account with Wells Fargo.
Judgment debts that remain unresolved can sometimes lead to asset discovery hearings. This is where you are questioned about money and assets in order to discover how they may better collect on the judgment. It is part of the court collection process.
I guess all of this leads me to wonder what the answer may be to this question:
If I had the means to pay back all of the credit cards in full at this point–which is now 2 years down the road, and after all 6/7 of the accounts have gone to collections and/or attorney debt collectors, including 3 court judgements against me, and so there are already all sorts of negatives on my credit report now… and my goal were to clean up my credit as much and as quickly as possible, would it make much of a pile of beans of difference at this point if I were to pay them back in full, or simply to settle them for the best offer I could get out of the current debt holders? The reason I ask is, suppose I could afford to pay them off, what if the difference between the best deals I could get and the full face value pay off were $40,000, but at the same time doing the later would significantly improve my credit much more quickly, and if I could have better credit and more access to capital it would be easier to earn that money back more quickly through, say real estate investing (e.g. needing to take out a mortgage or two), then potentially in the medium-to-long run it could be worth it to clear that up sooner. And I’m wondering if it could/would save me a lot of time in the near term in terms of time I wouldn’t have to spend on trying to get my credit reports cleaned up.. Or would I have to put time into trying to see to that anyway?
I dont know if anyone actually ever does this (pay them back in full after going so far into arrears), but I was curious enough about it that it seems worth it for me to mention it to you for your opinion.
Thank you very much.
J.T.
My experience is that it would make roughly the same amount of impact to your credit reports, and access to credit products, whether paying the full amount, or settling for less. And that was the case after the accounts were charged off, which for credit cards is 6 months of not paying them.
That being the case, if it were me, I would settle and save the most I possibly could.
You will spend the same amount of time dealing with credit reporting clean up either way.
And yes, people get their debts caught up, and paid in full, all the time. There are varying reasons for this. My experience suggest it is mostly out of guilt, a sense of obligation, or a lack of understanding of how the debt and credit systems work.
Michael
Hello again.
Mandarich came back at 5800 for the 7400 debt. I’m fine with that.
But a) in the original letter they sent to my atty they wrote “February 18, 2013” in the pay by date instead of 2015. May be a typo. But I wanted it to be accurate.
B) my *#! atty got me the letter later than that date anyway.
C) their letter seems somewhat vague to me otherwise and that worries me:
“This office has been authorized to accept a lump sum payment..as settlement of the above-referenced account….Upon receipt of the amount indicated, we will notify our client to make any appropriate adjustments to your Account. Upon funds clearing the bank, this office will submit a request for acknowledgement of satisfaction of judgment. ”
[ Side Note: I paid a settlement to Midland for another card on 1/15/15, and as of yet they still have not updated the bureaus , tho they say it will be done on 3/15/15. So that’s got me dubious about the believability of these firms.
I’d like to be in position for a mortgage refi by June. So I’m watching the clock on both of these accts and getting anxious. ]
Since the faulty 2/18/15 Mandarich letter it’s been 2 1/2 weeks and Mandarich still hasn’t gotten us a new letter yet. I’m going ***ing nuts. I want this over with. And I cannot understand their “strategy” if there is one. My attorney says there’s nothing he can do– which doesn’t come off as very credible to me. The Mandarich rep on the case is easy to get on the phone, but says he can’t say much to me since I am represented by and attorney, but all he ever says is “I am not the attorney. But the request for the new letter has been given to the attorney and we are just waiting for him
to approve the revised language.”
Its truly maddening. I don’t know where my leverage is but I really need to get this done and move on. I’m not sure it’s “worth” going to a new atty at this late stage in the game. And I’m afraid of just dumping my guy for fear that Mandarich will rescind their $1600 reduction — which at the end of the day isn’t that great, but better in my pocket than theirs
So I feel very stuck, frustrated and hung up on this thing. Meanwhile it really isn’t that if of a deal and it shouldn’t be. But I’ve lost all detachment and have very little ability to objectively assess because of my limited experience.
What does this look like to you? Do you have any ideas? What would you do?
Thank you so much for your time !!!
I do not see anything wrong with that verbiage that speaks to the debt being settled, and the obligation to notify the courts.
Post an update if Midland does not update your credit reports next week and we can go from there.
As far as the maddeningly frustrating feet dragging from collection law firms… I have ridden that bus. I had a pass with loyalty points (sarc off).
You are still within the time constraints to reach your goals.
I would avoid calling the firm to check on things when you have an attorney working for you on this. It sends a message of urgency which is often not conducive with getting a lower balance payoff on judgment debts (or others for that matter).
So, I think what you’re recommending is patience.
For a few weeks.
Haven’t paid on cards in 2-3 years. Some are still with collections, some are with attorneys. A few judgements against me have been obtained. I’m now in a position to pay off negotiated reduced balances, but have some questions about what is the best outcome for my credit report that I can negotiate for before I pay?
I’ve negotiated settlements with some of the card companies, but before I pay them the negotiated settlement figure, what kinds of release statements and actions can I negotiate from the collections agencies and/or attorneys in terms of not only getting the debt reduced but also getting the negative credit history information removed from my credit report?
Other than getting the courts updated that your judgments have been paid/satisfied, there is not much to negotiate that will have a positive impact on your credit. The judgments are part of the public record. But once they are showing as resolved (can take a couple-few months), they will not hold you back much, once the rest of your credit is back on track.
Post a list of the collection agencies you are dealing with, and I can offer feedback about settlement percentages to target, and any likelihood of negotiating anything more favorable than zero balance and resolved on your credit reports.
What state are you in?
What credit and finance goals do you have in the next 12 to 24 months?
Hi Michael,
I appreciate your response.
I’m in active negotiations for settlement on all of the credit card debts below. What I’ve just been made aware of from a close friend in similar straits are two things:
1. Settling the debt doesn’t go all the way to clearing up the credit report down the road; that a credit report saying “settled in full” is not as good as one that has no trace of the issue ever having been there, and
2. There are two possible ways to get all traces removed: either at the time of settlement or after the fact with credit clean-up type companies. My friend’s advice is that I try and get the negative histories erased at the time of settlement as part of the settlement. It seems though that both avenues are difficult—if possible at all..?
I don’t know whether any of these entities below (attys and/or collection agencies) have the power to make those negative histories disappear, or if it’s more likely one type would versus another. The one I’ve asked so far, LTD, said they had no idea. I wondered if you would think they were just passing the buck when they said that, and then also said they also said that Chase still owned the debt and they have to submit their settlement to Chase for Chase to take the final steps. However the credit report itself states “Close—Derogatory. Charged off as bad debt. Canceled by credit grantor.” That would lead me to imagine that Chase no longer has anything to do with it.
Just to make sure we’re on the same page, I was specifically asking about getting derogatory credit remarks off my credit report, after the fact, if you will. It hadn’t even occurred to me yet by the time I’d written you last how any judgements that may be noted on my credit report would be referenced once they are finally resolved. I don’t believe there are any public records/judgments on my credit report as of this time.
Amex. There were a personal and a business card that were lumped together. $21,000 total. Case turned over to Attorney Firm named Zwicker. They obtained a default judgment. Have twice made it into my personal bank account via liens and taken a total of $5300 toward the $21k total figure.
Attorney now negotiating on my behalf
Barclays. .Business Card $7500. Default Judgment obtained by Mandarich Law Firm. No further action taken to collect.
Attorney now negotiating on my behalf
Barclays. Personal Card $11000. Default judgment obtained by Nelson and Kennard Law Firm. No further action taken to collect.
Attorney now negotiating on my behalf
Chase/United $10800. Being handled by LTD Financial Services/ Houston, TX. They’ve offered to settle with me for $1825. They’ll mark the account at “settled in full.” Self-negotiated
Chase/United $18,890. Being handled by ARS National Services. Escondido, CA. They’ve offered to settle with me for $4700, And they’ve allowed payments of $25/month toward that for over a year until I’m able to pay the balance. I could do that now, but want to get it down to $2000. Self-negotiated
Citi/Home Depot .$4200 . Being handled by Midland Credit Mgmt, Inc., San Diego, CA They’ve offered to settle with me for $2566. I’d be willing to settle for closer to $1000 Self-negotiated
So, I’m in California. My goal in the next 12 to 24 months, would be to have my credit score back up to 700, and be in a position to obtain a home loan and/or refi.
Thank you for your time. I look forward to hearing what you have to say!
John T.
1. No trace of a negative account is better than a resolved negative account.
2. It is so next to impossible to get the credit card banks to remove the negatives as part of your negotiation that is not worth trying.
Collection agencies and collection attorneys have zero influence over the credit reporting of the banks they work for. LTD Financial Services would need Chase approval on any deal they make that exceeds the permissions they have as part of the contract they have with Chase.
Your Chase account showing as closed/cancelled and charged off is normal. If there is still a balance showing owed in the Chase credit report trade line, it is near certain they own it still, and do have final say on anything out of the norm.
Depending on how collectable you look, you are looking at 40 to 80 percent settlement lump sum with Zwicker and Associates on the AMEX judgment debt. If you get any lower than that, it would be abnormal, or your attorney working the file found something in the process to leverage for a better deal.
Barclay’s personal and business credit cards with judgments already are debts I would target similar to the AMEX account with Zwicker.
That is a really good deal on the Chase United credit card with LTD. And the Chase account with ARS National is really good too. The payment offer is unusual. I do not see you getting to 2k in your negotiations, but I would be happy to be wrong. How long ago were any payments made on these Chase accounts?
Midland Credit likes to hold firm to between 40 and 60 percent depending on how collectable you look to them. With how your credit report must look like a grenade blew up on it, you could hold out for a better deal lump sum. How long have you been negotiating this one, and how long ago was it that you last paid on the card?
Your goal of home loan or refinance in 24 months is doable. Maybe not with a 700 credit score, but that can depend on which scoring model is used, as newer Vantage and FICO scoring models are out, and will be somewhat more adapted a couple years from now. These newer models do not factor the paid collections so to speak.
It will matter how quickly you can get these settled. What are realistic time frames for you to fund settlements?
Hi Michael!
Updates:
Zwicker offered (only) and accepted a 40% discount off the AMEX debt.
Same goes for Nelson and Kennard holding my Barclay’s debt: 40%
The final big hurdle is Mandarich holding my other Barclays’s debt. They have a judgement, It was originally a card in the name of the incorporated business I own.
I would love to do better than 40% off on this final push.
I’ve been having an attorney negotiate this for me for a flat fee–already paid.
Any idea of how low Mandarich may be willing to go, and how to get there, please?
Because I settled 2 card debts, and sold a house, resulting in two loans showing paid off, my credit report is starting to improve. which could be a negative in negotiations, so I’m wanting to get the last two done quickly.
Thank you very much
ALSO- Do you think the credit reporting language that Midland is offering me will suffice: “Paid in Full for less than the full balance” ?
They’re willing to take a 45% payment to close.
Thanks again.
As long as the credit report from Midland Funding shows any form of resolved status with a zero balance owed.
Amex rarely settles for less than 40%. Zwicker and Associates collecting for American Express will often not go below 50 to 60 percent. You did fine settling this.
Barclay settlement average is right about 40 percent when you are not dealing with an attorney. What you negotiated with them for is not great, but not bad given the situation.
Your other Barclay that is a judgment that the Mandarich firm is handling is one I would target at 60 percent. Partly because it is a judgment, but also for the reason you are concerned about – you are beginning to look more collectable with other debts out of the way.
Can you offer more details about the 4th account?
Hello!
We walked away from our home in Washington State in July 2009, the last payment we made was October 2008 after I lost my job. We defaulted on a few small balance credit cards and some medical and utility bills at around that time. All have been paid or are about to fall off our credit report. The issue we are having is the bank did not foreclose until August 2014. So, after 6 years of bad credit due to the late payments, etc.. We are concerned we will have ANOTHER 7 years tacked on by the foreclosure just not hitting our report. The foreclosure was non judicial. Is this how it will be reported? If the actual mortgage can be removed next year because it will have been 7 years since our last payment, does the foreclosure remain for 7 more years? Our credit score is now in the 500s, we feel like we will never own a home for our family, what is your advice?
It is possible that the public record aspect of the foreclosure will inflict all new credit damage, as public record reporting on your credit has its own shelf life that starts fresh from the date of filing. If there is no money owed on that negative entry (like a court judgment would have a balance to be paid), it may not hold you back from future credit goals like you are thinking.
What were your credit scores before the foreclosure showed up? What unpaid collections are there now, if any?
Thanks for your reply!
Before the foreclosure showed up the scores were in the high 500s but this was due to the 6 years of 120 day late mortgage payments. We have a few unpaid collections but they are really old, I was advised to leave them as is since they will be coming off in the next 12-18 months. Our scores were in the mid 700s when we bought our house, the mortgages (1st and 2nd) on the home we owned before that were paid on time every month but we only lived there a year.
We have car payments and a small loan from our credit union that we pay on time just waiting for everything to come off…. We have rented the same house for 5 years and were really hoping to start shopping for a new family home when all of this goes away.
How long do you think it will take when everything is off except the foreclosure? Will the actual loan come off or is the foreclosure attached to that? Will potential lenders take into account the age of the loan and how long it took our lender to foreclose? What about FHA?
Thanks again for your help!
The loan would drop from the reports.
It could take 2 years after the date of the foreclosure entry in the public record to meet lender underwriting standards. And that goes for FHA too. You will want to work toward a 620 minimum credit score for FHA approval (though there are some limited exceptions to that). I think you are closer than you think once those older items age off your credit.
Thank you very much, we will keep doing what we are doing and wait and see….
Thanks again, greatly appreciated!
Hi, I have several credit cards that have been closed by the consumer because I was in a debt repayment plan but stopped doing it. Now I am trying to get caught back up on the payments. I also have two recent repos (in the last year) and about 4 collections/charge offs. Considering all that I have, will it even help my credit if I pay the credit cards that have been closed? I don’t want to waste my money and me and my husband make too much money to file BK. Not sure where to start as I would love to purchase a home in the near future. I feel overwhelmed trying to make the right decision. Thank you for your help!
In order to offer the feedback I think you need and are looking for, I need more details. Post answers to the following questions in a comment reply, and lets go from there.
What type of repayment plan were you in (debt consolidation through a credit counseling company, debt settlement program, other)?
Post the name of each creditor or debt collector, and the approximate balance owed on each account. Also list when it was each account was last paid.
What time frame do you have in mind when you say “near future” to buy a home? Do you both have dependable jobs and income?
I was in a debt management plan and paid the following credit cards, I am up to date on all credit cards except for my husbands amazon account .
Walmart, bal.$136, last paid 10-10-14
Walmart, $258, pd 10-10-14
Barclay , $148, pd 10-10-14
Barclay, $256, pd 10-10-14
Capital one, $440, pd 10-10-14
Capital one, $420, pd 10-10-14
Merrick bank, $760, pd 10-10-14
Merrick bank, $800, pd 10-10-14
Amazon , $980, pd 7-2014
Amazon , $600, pd 10-10-14
Lowes, $989, pd 10-10-14
David’s bridal, $720, pd 10-10-14
I am wondering if we are wasting our time paying on them since we have two repos with balances of $11,800 and $7500 after auction , the amounts we owe
We are wanting to buy a house in a year or so but not sure it will happen until we get things cleared up. Not sure what to do or where to start. Thank you
Was the debt management plan with the credit counselor affordable? Did you have money left over to start saving to settle the deficiency balances from the repo’s?
I am wondering if you can continue to pay your credit cards the way you are now, and save quickly to settle the charge offs and repossessions within the year to meet your goal.
If the credit cards are not affordable, settling with all of them is an option, but is highly likely to prevent the one year home ownership goal, and with so many low balance accounts, settling is a bad idea credit score wise. Here is more detail on accounts to keep out of settlement when possible: https://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan/
I have settled all my credit cards except one Citi Card. It is for $10,000. I missed the first payment on March 2013. It went to collection on Sep 2013. I have not heard from them since but someone just contacted me yesterday. I got a voice mail and a letter. I believe the account has been sold atleast 2 times. They mentioned they bought the account from someone (not citi). As a standard procedure they mentioned if I do not request validation of the account within 30 days, it will be deemed valid. How should I go about it? Ask for validation first via registered mail or just talk to them on the phone or do both?
Whether or not to ask for debt validation can hinge on what your goals are for the account. Having settled all other accounts, I would assume your goal is to resolve the Citibank credit card with the debt collector in order to improve your credit and finance options.
If your goal is to settle, depending on who has the account, debt validation could complicate reaching your goal.
Who is it that is collecting on the account today, and who did they say they purchased the account from? Is Citibank showing the account as a charge off with a zero balance owed? Is the new collector showing on any of your credit reports?
I want to settle this and be done with. This is the last one. The letter I got is from Phillip & Cohen Associates. It said, your account now has been purchased by our client PCA Asquisitions LLC dba Portfolio Asset Group and they have referred to our office for collection on their behalf. I checked my credit using Capital One’s free credit tracker and it shows Citi with the 10k balance, it does not show any other collector. Should I purchase my actual credit report? How much can I expect this to settle for?
Portfolio Asset Group is a debt buyer. I would purchase your credit report to be certain Citibank info the free one has is accurate (free credit reports are not going to be the most current in my experience). Let me know what you see on the real time credit report you get.
I would realistically target 50% for the settlement, but start low at 30-ish percent. If you hit the middle at 40% you did good. Can you pull together that amount?
I was eligible for Annual Credit Report from Equifax, so I got one. It does not even show the $10k citi card either in closed or negative account section. I had another $6k card from Citi and it does show that one as Paid & Closed, Paid for less than Amount owed. It does not show any collections on the report. I see a credit inquiry from Phillip and Cohen Associates on Sep 3, 2014. I also see a credit inquiry from AR-CITIBANK on May 08, 2014. I would like to settle but I don’t have $5k. I can spare around $2500.
It is possible to settle with debt buyers for the amount you can pull together. You have to be able to communicate your personal and financial hardships really well, and the information they can see about you, like what is on your credit reports, should also lead to their systems scoring you as not very collectable.
I do see 30 to 40 percent settlements with Phillips Cohen and Assoc., so you are not that far off the mark.
So, how come it is not showing on my credit report? Do I even have to settle if it is not showing on my credit report or not affecting my credit. I believe they can sue me within 4 years period, right?
Equifax may have never had your citibank credit card showing on their report, or something happened with how Citi was reporting it after they sold the account to a debt collector. I would want to check the other 2 credit reports to be certain. If you have not access the other two through the portal they are required to provide a copy to you for free once every 12 months, you can do that at http://www.annualcreditreport.com. Let me know what you see.
California has a 4 year SOL for this type of debt. If my goal was to settle, I would want to knock that down before Phillips and Cohen farm this out to a local attorney in your area. But if that does happen, you have access to some great assistance through the same attorney I remember referring you to on that Discover account we talked about before.
Thanks Michael, I checked Experian and it does not show this Citi card either. I did send validation letter to Citi, maybe they stopped reporting it after that. I am not eligible for TransUnion yet, the last report I got from TransUnion was in Dec 2013.
Well… whether or not the account is on your credit reports, you will still have the risk of being sued until the SOL passes in your state. That sounds to be roughly 3 more years.
If your goal is to settle, and you can raise enough to make a reasonable 30% offer, I would not necessarily start with a validation request. That could be a strategy to delay any decision they may make next to collect, but could also trigger your file for review, and sometimes that review is by the legal departments at these shops, which will sometimes, not always, instigate collection activity in the court earlier than would have been the case, or at all.
If you want to settle, I would call and work through that process, stressing the financial hardships you have, and that the money you are offering is all there is in the world you can pull together from xx many sources. You get the gist.
You could hang back and let this play out if settling is too much of a stretch right now. And if that is the case, and this is indeed a debt that has been sold more than once, there is some wisdom in sending the validation request.
Michael,
So, I did not hear back from Phillip and Cohen since last Nov. I made them an offer of $2000 on a $9300 credit card debt. They countered me for $3200. I did not have the money then and I said $2000 is the best I can do, they said they will review and get back to me and they never did until today. So, today I get the phone call, the guy said, “your account is pre qualified for a litigation. I am not threatening you, just letting you know”. However, his tone and the way of talking was indeed threatening, I said I am aware of my rights and this is a threat. He said, ” you have until fri to get back to me, otherwise, the account will go to litigation. You can settle for 50%, which is $4600″. I said the best i can do is $2800. He said the offer is nonnegotiable. He said, “the firm thinks they can retrieve money from you, so they are going to file litigation”. I do have the money now, however, i want to get the settlement down as low as possible. Is this threat serious? Do i need to take any action before fri? I have contacted the attorney you referred me to, he is going to call me tomorrow. What do you think I should do in this situation?
I would look at what Jeremy can do to help you settle this for a lower amount, including his fees, for less than the nonnegotiable amount Phillips and Cohen is saying they will accept.
Michael, I was able to settle the Citi account for $2500. Thanks for your help!
Michael,
I got a letter from Philip and Cohen Assoc. The letter stated that the $2500 has been applied to my account. Remaining balance is $6200. Payment made in the amount of $2500 on 1/30/2045.
I got the settlement letter from them on 1/29/2015. The letter stated:
Upon making the payment of $2500 this debt will be settled. Settlement Amount $2500. Date: 1/29/2015. Upon receipt and clearance of the above referenced payment(s), you will be released from any further obligation to regarding the above referenced account. This arrangement will be cancelled if payments are not made in accordance with the indicated schedule.
I paid on 1/29/2015 via Check by Phone. However, when I checked my bank statement, the check cleared and the date on the check is 1/30/2015 and they are stating in their letter that the payment was made on 1/30/2015. Did they trick me? Will they say the payment was actually made on 1/30/2015 and the settlement letter is no longer valid? I am getting worried.
I would first assume the letter they sent is some type of system error. Call and talk through the details and confirm that. If for some reason they are going to say that your account is not settled, post an update here and lets go from there. I will be more than happy to work with you one on one to resolve the issue.
I called them and they said my account is marked as settled and closed. They asked me to call after 30 days to request a release of debt letter.
Good. Let everything update in their system, call and get the “you owe no more” letter, then check your credit report to make sure it is updated and reflecting accurately.
Michael,
I called them and asked for a debt release letter. They did say the remaining balance on my account is zero. They sent the letter to me. It reads “This letter acknowledges that the above referenced account has been satisfied. On behalf of Portfolio Asset Group we appreciate your cooperation in resolving this matter.”
Is this good enough?
That covers you if anything were to come back up later on.
Keep that in a safe place with other important documents, and perhaps a scanned copy with your other backed up media.
Hi Michael,
I stumbled across your site as I’m looking for some answers about repairing my credit score. I foreclosed on 2 properties (purchased prior to being married), foreclosed one in 2009 and 2010. I went to seek help from a bankruptcy lawyer, but decided not to file since I wasn’t sure if that was the right thing to do. I am currently self employed and wanted to see if I could qualify for a travel rewards credit card and was denied due to “too few accounts with sufficient satisfactory performance” score 631. Also, my husband and I (and 2 sons) were trying to rent an apt, but since I had foreclosures (I’m assuming) we were denied. Thank goodness we have family who have taken us in. At this point, I’m wondering if I just ignore the foreclose for another 3-4 years will I be able to rent or purchase again? Or even apply for a credit card anytime soon? Thanks in advance for reading this!
Do you have any other collection accounts, or negative items reporting?
What shape is your husbands credit in (list negative accounts)?
You may not have to wait for the foreclosures to fall off of your reports to be able to accomplish your goals. And there are people and companies out there willing to rent places to those with bankruptcy or foreclosure on their credit reports.
Do you have credit cards active now? How many?
Hello,
I am in serious credit problems. From foreclosure, 3 auto loan repossessions, to credit card debts. I was always on time and had exceptional credit while in the military until my ex kicked me out and put me on child support (was cheating on me), one brother stopped paying on a car I got for him, and another brother got into legal woes so attempted to help him.. Thus harming myself more unfortunately. I’ve spoken to a bankruptcy attorney already and may still consider it. Not sure if its better to pay off debts some how over time or file bankruptcy and deal with that blemish for 7-10 years though. I know either route requires time and patience so trying to go the best route and never make the same mistakes again. Any help is appreciated.. Thank you.
Also the mortgage was via Veterans Affairs and don’t see any debts owed to bank, US Bank, after foreclosure and re sale.
If you post the approximate balances on each debt; the name of the original creditor; if a debt collector is now contacting you, who that is; and when each debt was last paid, I can help you compare your options to resolve the debts.
*Capital One credit card $1602, transferred to another office, doesn’t specify who, last paid 08/12
*Chase credit card $1258, charged off, last paid 06/12
*Corpus Christi city employees credit Union $3035, auto repo, charged off, last paid 10/13
*Corpus Christi city employees credit Union $4972, auto repo, charged off, last paid 10/13
*CC Area Teachers FCU $7197, auto repo, last paid 04/14.
*Navy Army FCU $3178, Unsecured loan, charged off, last paid 01/14
*US Bank home mortgage $72,577, foreclosed, last paid 11/12
*Cach LLC $1453, collection agency, from HSBC Bank
*Credit Collection Service $75, Progressive auto insurance.
*Credit Collection Service $1057, Time Warner cable
*Credit Protection association $1014, Ambit
*I C Systems Collections $190, First choice power
*National Credit Systems $4254, Chandlers Mill Apartments
Hope this helps. Thank you for your time and advice in advance.
Not counting the US Bank mortgage, or the Progressive insurance that was sent to collections, your total outstanding balances in collection is $29,210.00.
Assume you could settle all of that roughly 30k of collections and bad accounts messing up your credit reports for roughly 40%. You will need close to 12k. How long will it take for you to raise that amount of money? If you cannot pull that together quickly, that is okay, you will just settle an account or two at a time. That is normal. But it is best for your credit scores, and credit reporting, to put as much of this behind you as quickly as possible.
Lets assume it takes you a year to get the 12k. You settle some debt next month… 2 months later, and so on, but you finish this all up by the end of summer 2015. It will take another couple years after your settlements still, to rebuild your credit. So you are looking at costs of 12k, and 2 to 3 years of crud for credit.
The national average cost of a chapter 7 bankruptcy is about $1,800.00. That is soup to nuts, all costs included. You can read this article about credit recovery and bankruptcy: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/, and you will see how you will likely have quicker access to financing a vehicle (within year one of your bankruptcy and at a high interest rate); be able to obtain a mortgage within the same time you would have the earliest opportunity if you were to settle debt; and would likely have some sub prime credit card offers in the mail with a couple months of discharging your debts in the chapter 7.
Unless you can come up with some compelling reasons to not file chapter 7, it beats settling your debt, when measured by cost and time, handily.
From the sounds of it I might be better off filing for bankruptcy. The 12k throughout the year doesn’t sound too difficult but don’t see how it went from roughly $30k in debt to just having to pay 40% or $12k. Is that through a program or average bargaining to settle debts? Also the 12k and 2-3 years of crud sounds a bit better than bankruptcy being on my report even if it’s just 7-10 years.
I would at least call and talk to a bankruptcy pro in your area and get a feel for whats involved.
I got to the 40% of 30k using a general and realistic average for settlements with the creditors listed. 50% is the more realist target with the Capital One, and probably the auto repossessions with the credit unions (if not sold off), while some of the other ones could be negotiated lower than 40%. And these averages are based on you negotiating the settlements yourself. If you want help settling the debt, you could add a couple grand in fees to that figure.
Bankruptcy may stay on your credit report for the longest time (7 years for chapter 13, and 10 years for chapter 7), but you are not left without financing options that whole time. As you can see form the article I linked to in my prior comment, settling debts and chapter 7 bankruptcy are not that far from each other when it comes to which is better for your accessing credit products.
Ahh I see.. The cars were auctioned off and those are the balances left. I’m going to read the article linked asap. Thanks again.
P.S., sorry our current scores are 680.
Mr. Bovee, my wife and I would like to purchase another home after having to let our house go into foreclosure in January 2010 with Chase Mortgage. The unfortunate aspect is with the second mortgage we had with Bank of America and trying to get them to close the account which they will not do. Chase has closed our account with a zero balance but which seems to make lenders happy but B of A has the account as zero but open and this does not make the lenders happy.
A little background, my wife and I had tried to sell our house for more than 3 years with no luck. We were preparing for our twin daughters to graduate high school and enter College and for us to pay their College cost without taking any student loans which we did successfully and they have both graduated and have wonderful jobs.
We have never missed any payments on anything and we both had scores in the 780s prior to the foreclosure. We have financed 3 vehicles since the foreclosure without any problems and of course paid our rent on time. The only mark on our credit reports is the foreclosure and second mortgage non-payment.
I have talked to B of A numerous times with the last being a week ago and they said their intention was to leave the account open for 7 years.
Can you offer any ideas for us to deal with B of A.
Thank you for ay assistance you might offer
What amount is showing owed on the second mortgage with Bank of America?
The balance that is showing is zero but as I mention it shows open. I had failed to mention that our current score is 680
With a zero balance reporting owed on the second mortgage, there is no real impact on your debt to income and affordability factor. Did BofA sell this debt to a purchaser?
Negative items can stay on the credit report for 7 years. That does not mean you cannot access financing for that entire period of time though. Have you worked with a mortgage broker or loan officer in preparation for a loan?
B of A did not sell the debt. We worked with QLs earlier this year in hopes of getting approval for a VA loan before our lease expired on the apartment we were renting but the B of A account was the only problem. The credit company was satisfied with the Chase account but they did not like that B of A had the account open even though it was reported as a zero balance.
I was hoping to work on this before our lease is up April 2015 and try again. I guess my only thing to do is start 2-3 months prior to our lease end and see if any would take us on for a mortgage.
P.S. our daughters College meant a lot more than the credit score especially since they are doing so well.
I applaud your strategy for handling college costs. That would have been a way bigger priority than a credit score in my book too!
I am going to send our comment exchange to a broker I know and get his thoughts. He may not be familiar enough with VA loans to say much, but then again….
Thanks Michael, I appreciate any assistance.
We are investigating as to how we can bring our credit score up from 576. It has plummeted since November 2013 due to collections that we aren’t sure what they are for. There are 7 collection action items and today I was served with a summons from Cap One for an unpaid credit card. I have 20 days to respond but bottom line, I owe the balance. Is it too late (in your opinion) to call them and try to negotiate at this point (I can’t pay the full amount but would opt for payments) or should I have my day in court? I don’t have any proof I have paid on this balance since June 2013. Can our credit recover at this point if we settle and workout a payment plan? What should I do about the collection items on my report? I have been reading if you pay the balance and ask them in return for payment to delete it off the report that most collection companies will comply. Is this true? Any ideas as to how I can increase my score at this point?
You will want to tackle the account you are being sued for first. And if your credit report and score are the over all concern, now that you have been sued you will want to settle this in a lump sum, not payments. Can you come up with, say 60% of the balance you are being sued for?
Check out this post and the comments for more about resolving debts when sued: https://consumerrecoverynetwork.com/question/can-you-negotiate-and-settle-a-credit-card-debt-if-you-are-being-sued/
Where did you read that debt collection companies routinely remove stuff from your credit reports in return for your paying them?
Hi Michael I did come back again !
I do have a questions for again please…
My girlfriend, she did the bankrupt in 2011 and now she wanna buy a new car can she do it or not and how about she credit scores effected or how long she have to wait to get a better rate????
It is not too difficult to get a car loan after Chapter 7, but the interest rates are high. The rates will come down over time, and now that it has been three years, she could see some fair auto loan rates. She can pull her credit scores for a nominal fee. Post what those are. Does her bank offer auto loans? That would be a good place to look first. Does she have a specific car in mind?
We had a similar situation with citimortgage. We never spoke to the same person, we never got ANY answers when we did talk to someone. We complied with everything they asked us to do. We send paperwork numerous times. We were lied to, misled, and deceived. We were in the position to get other financing to keep the house, it was just a stupid slip of not paying on a second home. They told us that we could apply for a modification and that we should make no payments until it was approved. After almost a year of BS, and lies, we suddenly receivedm in the mail, the court notice of sale. We called them and they STILL told us not to worry because that was not the case and it was being taken care of. OMG! So we were stupid enough to believe they were telling us the truth after a whole year of trying to get this thing done. Just as suddenly we “found” a posting of notice to vacate. We didn’t have time to get all of our stuff out, literally, someone was in the house removing personal items. This was such a crock. We could have kept the home if they would have been honest with us. We were a part of the independent foreclosure review and received a whopping $3,000 for our losses. We have a foreclosure on my husband’s credit and no one at CitiMortgage can tell us much about our account. We are needing to relocate and are having issues with finding financing due to the foreclosure. According to most standards for financing we have to wait until it is 3 years, out, which is in 5 months. Is there any chance that we will be able to appeal to Citi and get them to remove the foreclosure since our loan was mishandled and the modification was a total sham?
JC – Taking a shot at Citi Mortgage being responsive is worth the energy, but be realistic about planning for this going past that three year timeline that is up at the end of summer.
Do you have any verbiage about credit reporting in your letter from the independent mortgage review? Have you escalated this concern anywhere yet?
In 2006 I filed a bankruptcy but kept and paid my house payment, I wasn’t able to work and I got behind on ONE payment to Chase Mtg. NEVER skipped a p’ment on my second mtg to Wells Fargo. At that time, I went to pay my payment that was late to Chase and they wouldn’t take it. It was ALMOST time for the next payment, yet they told me I HAD to pay THREE payments or they would not take it. I could not do that~!
I then got a letter from Freddie Mac telling me about the HAMP loan. I applied and I was told BY CHASE NOT to make a payment until it was approved. They rocked this on for THIRTEEN months, having me send anywhere from 20 to 30 papers every couple of months. They would have a NEW excuse each time..meantime, I found out MANY who had LOST their homes with this HAMP mess, now called HARP I believe. I just thought they weren’t following instructions and I KNEW that I was. BUT, when I got the papers to sign after 13 months, it was a PURE SCAM. I talked to 3 lawyers who ALL said NOBODY had been able to keep their homes with this “plan”.
I hired a law firm..He went to court to file chapter 13, pay my payment and a trustee to get caught up. Chase CONTINUED to add on thousands in charges. My lawyer said he knew and THEIR lawyers knew that I did NOT owe it. SO, I ended up with a 900.00 a month payment which, of course, I could not and would not pay~! My lawyer said the best thing to do was just let them have the house. I did that.
I moved out of it and they waited another 8 months or so before they foreclosed that house. NOW, that is ALL that is on my credit report as I own NO credit cards, paid my car off and literally have NO DEBT whatsoever. That bankruptcy was discharged. BUT it is still on my credit report as if I’d done it..it never went through..the judge refused it when I quit paying on the house and the trustee. HOW can I get my credit back on track? I do not want any credit cards and most likely could not get one anyway~ I am in a mess that I did not create. Chase did. Is there ANY WAY that I can get the bankruptcy that we never finalized OFF my credit report? I am renting a house now and paying more than I would be if I was buying. ANY ideas would be greatly appreciated.
I moved out of the house in Dec of 2011..I believe they foreclosed it the next spring in 2012. I have rented ever since…been on time and paying more rent than my original house payment was. I have now found a cheaper rental and I am paying 550.00 a month and have been since July of 2013..In other words, I moved out in Dec of 2011 and havce steadily paid rent since then. I am assuming the foreclosure was done in the spring of 2012..I don’t really know b/c I did NOT give Chase my new address because THEY wouldn’t even take my calls. SO, it is coming up on 2 years since they foreclosed.
Thanks so much for any help~!
Thanks~!
Sorry that happened Debbie. What state are you in? Did you receive anything from the national mortgage settlement?
It sounds like you are ready to buy a home again. There is not much to do about the chapter 13 filing. While it never progressed and was dismissed, it is still part of a public court record. Data miners (not the courts) send that information to the credit reporting companies. Chapter 13’s stay on the credit report for 7 years. But that does not mean you are in credit or loan purgatory for that whole time. You can generally wait around 3 years after a foreclosure, 2 years after a bankruptcy, and qualify for FHA type of home loans. There are instances where you can explain your situation and hardship at the time of the foreclosure or bankruptcy, and still get approved. You should run your scenario by a broker with a deal of FHA experience.
Do you happen to know your current credit scores (not free fake ones)?
Thank you Michael !! Safe travels!
Michael:
Received an email from a lender I have been chatting with lately. He mentioned a plan “back to work” FHA… We seem to qualify under most of what is required…The only thing thats got me is my spouse must have a 640 (we both must)…Considering the change, a different plan maybe?! Anxious to hear from you!
Thanks!!
Hi Melissa – Not sure what happened with my last (and long) reply. It would have spoken to some of what you just commented about. I did get a caching plugin tweak, so maybe that did something.
I am traveling right now, but will try to recreate that post tonight or first thing in the morning. Should not be hard, as I exchanged emails with a friend at credit.com about some useful tools for you. Here is one of the links I put up before: https://blog.credit.com/2012/07/the-ultimate-credit-report-cheat-sheet/. That article will assist you with how to read through and understand the different elements of your credit reports.
Back to post more soon.
Hi Michael:
First again, thank you for your time. From reading through your above thoughts, I think my first hurdle is going to be learning to read and understand the credit report. I am working off of one I had a friend pull from a finance company. The details do not seem to be user friendly at all. I received the file in adobe format via email. In the mean time, I can answer:
•When were the last payments made on the accounts?
No payments or correspondence has been made since 2010-2011
•Who were the original creditors? Who is collecting on the credit cards now (if you know)?
The cars – Chevron Valley Credit Union, Bakersfield California (Both appear to be reporting as charged off)
Forclosure – Bank of America
Student Loan – Sallie Mae
GE Money Bank – Midland Funding
Chevron Texaco – Asset Acceptance LLC
Tribute MasterCard – Midland Funding
HSBC – Portfolio RC
First Premier Bank – LVNV Funding LLC
•Are there any attorney collectors trying to collect on any of the accounts? If so, are any of those attorneys located in the same state as you are?
We do not receive statements, correspondence or phone calls on any of the accounts. Our contact information has all changed. I do not believe a forwarding address was ever done.
•If you were to approach your credit repair efforts by methodically and strategically resolving old debts one by one, how much can you commit from your monthly budget consistently? Can you tap any lump sum resources in order to be more aggressive with resolving the debts?
This is a tough one. We do not have any lump sum resources, but I recently picked up a second part time job that generates about $1,000 a month. I would be more than happy to use every penny of that source of income for repair. I truly just dont know where to begin, as I scroll through the credit report my intial hang up is understanding it. From there I dont know to call, dispute, ignore… We considered bankrauptcy last year, but could never obtain enough useful information to know if it was for us. We met with a local BK attorney and was told we make too much money to file, unless we were to divorce and he file seperately. Your thoughts on any of the above? I do not know the legality of it but I would be more than happy to remove SS# and share the credit report I have to work off? Ugh..Overwhelming!
Thank you Michael.
Melissa