Rebuilding Your Credit

[belvedereem]

Hello Everyone!
I'm new to this. Please excuse all my questions. 
When I turned 18, I decided to get a credit card and a new leased car! I mean come on, freshly out of high school, and they want to give me shiny new toys.... I grabbed them without hesitation.

Anywho. I'm going to be 24 this year, and I need to fix my past mistakes.
I've researched a lot of places and myfico seems like the type of place with people that know their crap!

So I have a question.
I pulled up my credit report recently.... and I have TWO charge offs: 
1. For the lease that had unfortunately got repossessed.... says it has a $0 balance. (I'm confused by this. Do I owe money?)
2. For my credit card has a $859 balance.  

I also have three old collection accounts. Each of them well under owing $400. 
So I don't have to much "total debt". 

On a positive note... I have had a Cap One Secured card for 9 months now, never late, and ALWAYS under 30% usage.

So, what should I tackle first? Also, I heard of a way settle collection accounts by only paying around 50% of what's due by sending a letter to each agency, is this feasible? 

Thank you so much for taking the time to read all of my ramblings. Any help is GREATLY appreciated. 

[LIGHTNIN]

A few things you need to know before starting. Your states SOL and the DoFD on each of the OC accounts.

The first thing has nothing to do with Credit Reporting, it's your states SOL (statue of limitations).

It's the legal time period a creditor can take you to court and win.  Most states it's 3 to 6 yrs, some states it's longer.
Check you state laws or Google to find your states SOL

CRTP and SOL are two different things,many confuse the two, just remember SOL is legal and CRTP  is for Credit Reporting.
CRTP (credit reporting time period) is the length of time an item reports on a CR.
Most negatives stay on a CR for 7yrs, CA's stay for 7.5 yrs, Starting from the DoFD.
 
 DOFD is the month you first went late (1st 30day late) and never ever recovered again. If you brought the account current before any CO then DOFD resets and only the lates would show. For any OC listing, you'll often see a 30 followed by a 60, 90, 120, etc. That month in which the 30 appears is the DOFD assuming you never paid to get current after that point.DoFD will be on your EQ CR, the other two TU & EX CR's will show the date of removals.

Collections....Fico scoring see a Paid CA the same as an Unpaid CA, no score change. Now if you can get the CA to delete, you may see a score jump, just depends on how old the debt is. Check out the PFD Letters,it's a win win for both, you and the CA.

 Recent collections can hurt a FICO by 80-100pts in the beginning,then they tend to hurt less and less as time going on. 

I would suggest working on the most recent CA first, because they are the ones hurting your CS the most.

The OC and a CA can both report on the same debt.When a OC reports a past due debt, it dings your CS(credit score).
Then if a CA reports on the same debt, it dings your CS even more.

Debts are either assigned to a CA or sold.If assigned, the OC still owns the debt.
If sold, the OC changes the balance to $0 and the CA is the one you have to deal with.
 
Sorry for the long post, I'll try to wrap it up. IME, I didn't use a DV letter just a PFD and it worked for me.
For more detailed info read What Steps Do I Take?Do I DV?PFD?  If you havent already

IME, I made 2 stacks, 1 within the SOL and the other Passed the SOL.I worked on the ones within the SOL first, because I didnt want to go to court. Also, the CA's I settled with, only discounted the debt by 20 or 30%.Congrats to YOU on wanting to get your Credit and CR's in order Good Luck to YOU!! 

[belvedereem]

Thank you LIGHTNIN!
That was a lot of information to process.

So basically, my auto lease that has been charged off with a $0 balance.... means that they have sold the account to a CA, but the CA holding the account isn't reporting on my CR. How would I know what was owed? Now, I'm actually scared to find out.  I went to court for this back in 09/10 and basically stating that I knew I defaulted on the account and relinquished the vehicle back to GMAC. They were supposed to contact me if I owed anything, never did. I haven't heard from them since the court date.  

SOL in my state is 6 years.  Most of the things on my CR will be taken off in Early 2014 according to the CRTP. Since I realized I messed up royally and stopped having ANY accounts in my name. Cell phones and all! 

I plan on attempting to do a PFD with my CAs, and thank you for the tip on the most recent CA for paying them first. I wondered if I should start paying them by highest to lowest amount owed or not. So I will do that!

Anymore tips on all this mess, is greatly appreciated!

Oh, and one more question not regarding my CR. Once I get all this mess straightened out, I also heard having different types of accounts (Credit Cards, Loans, etc) help raise your score, and also makes it look better for future loans and such. Is this true? And is it ACTUALLY possible for someone with very poor/bad credit to get this, like say, through their personal bank?

[kjm79]

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belvedereem wrote:

So basically, my auto lease that has been charged off with a $0 balance.... means that they have sold the account to a CA, but the CA holding the account isn't reporting on my CR. How would I know what was owed? Now, I'm actually scared to find out.  I went to court for this back in 09/10 and basically stating that I knew I defaulted on the account and relinquished the vehicle back to GMAC. They were supposed to contact me if I owed anything, never did. I haven't heard from them since the court date.  It's possible that they sold or auctioned off the vehicle and there wasn't any balance left.  That's pretty rare though after they tack on repo fees and probably court and attorney fees in this case.  Do you know about how much you had left to pay on it when you gave it back?


Oh, and one more question not regarding my CR. Once I get all this mess straightened out, I also heard having different types of accounts (Credit Cards, Loans, etc) help raise your score, and also makes it look better for future loans and such. Is this true? And is it ACTUALLY possible for someone with very poor/bad credit to get this, like say, through their personal bank?  Yes, this is true and is possible, but sometimes requires that a deposit be put into a savings account as collateral.  You can get an installment type personal loan verymuch like you can get a secured credit card.  Just check with your bank, or if you can get in with a Credit Union that's the best route to go. 

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[belvedereem]

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kjm79 wrote:

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belvedereem wrote:

So basically, my auto lease that has been charged off with a $0 balance.... means that they have sold the account to a CA, but the CA holding the account isn't reporting on my CR. How would I know what was owed? Now, I'm actually scared to find out.  I went to court for this back in 09/10 and basically stating that I knew I defaulted on the account and relinquished the vehicle back to GMAC. They were supposed to contact me if I owed anything, never did. I haven't heard from them since the court date.  It's possible that they sold or auctioned off the vehicle and there wasn't any balance left.  That's pretty rare though after they tack on repo fees and probably court and attorney fees in this case.  Do you know about how much you had left to pay on it when you gave it back?


Oh, and one more question not regarding my CR. Once I get all this mess straightened out, I also heard having different types of accounts (Credit Cards, Loans, etc) help raise your score, and also makes it look better for future loans and such. Is this true? And is it ACTUALLY possible for someone with very poor/bad credit to get this, like say, through their personal bank?  Yes, this is true and is possible, but sometimes requires that a deposit be put into a savings account as collateral.  You can get an installment type personal loan verymuch like you can get a secured credit card.  Just check with your bank, or if you can get in with a Credit Union that's the best route to go. 

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Thank you kjm79 for your response!

I pulled a EX CR, they state Account charged off. $5377 written off. $2091 past due.  And states Recent blanace $0 as of 01/11.

And I just looked at a previous CR dated right after I returned the lease. 
It states...
Balance $3691.00
Account Status: Open
Payment Status: Current, was past due 90 days

Which now that I look at that, I didn't pay anything once I received a summons. So it's listing four months as "current" which is wrong.
And they're both listed as the same company on both CR reports (from 4/12 and 10/10).

So which number would you assume that I would owe? (If you had to assume.)

Probably the actual "written-off"amount, correct?

I'm sorry for all of this, I'm just really stressing out and want to know what to do. 

[RobertEG]

You cant necessarily tell, only from CR information, what is owed on a charged-off debt.

First and foremost, the fact that a creditor does an accounting charge-off of a debt does not in any way relieve the consumer from continued obligation to pay the entire debt.

The charge-off information is retained at different levels.  The amount originally due at time of charge-off is reported and retained, and remains in the consumer's credit file, aside from any subsequent activities on the debt.

If the OC then sells the debt, they must report $0 debt due to them, but the debt is still floating around, and the new owner may report the full amount of the debt. It doesnt go away.

You can have a period of time where no debt is reported in your CR.

The fact of a previous CO by the OC is irrelevant to the ability of any new owner to attempt to collect the entire amount.  A purchasing debt collector may then report a collection, and report the entire amount of the debt.

[belvedereem]

Thank you RobertEG for your response!

I suppose I'll wait for them to contact me, or for the CA that has the account to report it on my CR before I tackle that mess.
And just focus on the ones I already know about first.

I do have one CA that I believe I never opened an account with, or the dates don't match on my CR. 
I think I want to send a DV.
But if or when they validate this debt (if it's truly mine) can I then send a PFD?
And if the debt is NOT mine where do I go from there?  

This credit fixing process is really confusing at times, and I want to make sure I do it right and be completely thorough. I've looked up DV, PFD and other sample letters to know exactly what to say, and that everything needs to be sent CM, and to make copies of EVERYTHING I do. 
I'm sorry if I am becoming a nuisance, but I do greatly appreciate everyone's help!