Credit Rebuild Log -- Success is slow, but this stuff works!

[KittySaysMeow]

Thanks to everybody that takes the time to post in these forums. This place is an amazing wealth of information, and just searching around and reading has been incredibly helpful for me in formulating a plan of action.

I'm pretty sure I've got things figured out just from reading on here, but figured I would post my plan of action just to get any feedback folks might have, for which I thank you in advance. 

My scores are 551 (TU) and 568 (EQ) per myfico.com. I had a foreclosure and a bankruptcy in April 2008, bankruptcy discharged August 2008. Right now I have an Orchard Bank unsecured credit card, a Capital One unsecured credit card, and a Dept of Education student loan. The student loan reports as never late for the past 7 years. On the two credit cards, I'm currently at 98% utilization, and I have had 30 day lates Dec. 2010, Jan 2011, and Feb. 2012. I actually make enough money to pay off the $2,500 balance between these two cards inside of a month, so my plan is just to pay them off. According to the myFICO score simulator, paying them off will push me to 600-640. Although, interestingly, if I take 3 months to pay them off instead, the simulator says my score will be 640-680, which I find interesting. I think I'm just going to pay them off.

After my BK, I never really cared about my credit, and just sort of ho-hummed along for several years. I find myself suddenly caring, since I'd like to buy a house again soon.

After my bankruptcy, my credit score went from a low of 360 to a high of 640 in about a year, at which point I purchased a truck. A few months later, said truck was totalled  when I got hit by a guy running a red light. I failed to have something called "gap coverage", and the insurance paid off all but $5k of the truck loan, and I didn't have the money to pay it, so I didn't. A few months later, Capital One Auto Finance charged it off. DOFD was February 2010, and I have never since made a payment, dispute, or otherwise done anything to reset the clock on it. My plan is to let sleeping dogs lie on this one.

Also after bankruptcy, I had one of those high-fee First Premier cards, that I had a couple 30-day lates on, and eventually closed and settled for less than full amount. That was in Nov. 2010. I also had a Mid America Bank and Trust card with similar circumstances, which I settled for less than full amount in Jan. 2012. DOFD was June 2011. 

I had an old T-Mobile bill that went into collections shortly after the bankruptcy, and I ignored it until recently. I paid the collection account (Midland) in September 2012, which I now realize I should have done a PFD on.

I have a Verizon account with a DOFD of November 2011, it's listed as a collections account, in the amount of $323. Since I plan to apply for a mortgage in the near future, my plan is to try and PFD on this.

Lastly, there is an old student loan through TERI that wasn't discharged in my BK that is listed as a collection account. TERI is out of business, and a law firm bought the debt. DOFD is 02/2008, last reported on 10/2011. I had thought about trying to settle this, but thanks to these forums I now know that the DOFD is most important, so I'm leaving this one alone, especially since it's over $13k.

I would like to purchase a home ASAP, and since the myFICO credit score simulator says that reducing my credit card utilization over the next few months is the best way to do so, that's my plan. Since the Verizon account has the most recent DOFD and is less than 2 years old, I'm assuming that account is hurting me more than any of the other collection accounts, and so I am going to try to PFD it. If anybody thinks that's a bad idea, please let me know.

I also plan to go down to my credit union on Monday and get one of those installment loans secured by savings, to help get a good TL on record. That will give me two installment loans (including the student loan) and two credit cards all currently reporting positive. If the FICO simulator is correct, this would put my FICO above 640 in three months, at which point I might actually be able to get a mortgage.

Any thoughts or feedback on this plan is appreciated. Thanks everybody!

[sphinx313]

Your plan looks pretty good, but take the FICO Score Simulator with a grain of salt. I basically would hope for 20-60% of what it actually reads. Everyone's credit profile is different, and as such the scoring model will be different. I think your plan of attack is pretty solid, but make sure the DOFD's fall in line with SOL's in your state. You can still be sued if your state is like mine and has a 6 year SOL on written contracts. Sometimes it's best not to wake a sleeping giant or poke the bear, but always be prepared for what your course of action would be if you were to receive a summons to court for the debt. You can try GW'ing anything you've already paid and definitely attempt PFD's on the accounts you haven't paid. DV anything you're unsure of as well. Good luck to you.

[KittySaysMeow]

Thanks for looking over my plan and for the vote of confidence, I appreciate it. And thanks for the bit about the myFICO score simulator, I was actually assuming it was right on the money, since it's provided by FICO. 

Take care!

[sphinx313]

You would assume lol, but it has actually been pretty "close" for me. While some have used it as a guide, others completely bash it and would never use it for any kind of estimate whatsoever. The estimator is probably based on a 100% perfect world scenario, which we all know doesn't exist for all of us. The estimator said my scores would stay the same or only go up 10 points if I opened a new card with a $300 limit, and it went up 3 points. Based on the fact that the estimator said AT THE LOWEST it would "stay exactly the same", I count the 3 points as a win lol. Your mileage will definitely vary.

[KittySaysMeow]

Since I first posted this at the end of November, my scores on myFICO have increased by 30 points. Seeing that 601 pop up a few days ago was incredibly exciting. 

I've had one collection account for a private student loan that should have been reported as discharged in my 2008 bankruptcy successfully updated. I disputed several other derogatory items that were still reporting that should have been included in the BK, and those are updated and helped my score. I did attempt to GW a CapitalOne credit card 30 day late from Feb. 2012, and they denied it. I will try again down the road.

I attempted to PFD a Verizon Wireless collection account, and when that didn't work I simply paid it, and am waiting for that to updated on all three reports. I am hoping for another 5 or 10 points from that.

I have also taken drastic steps to reduce my expenses so I could apply every dime possible to my debt. At the end of December, I paid off my motorcycle (almost a year early), although it didn't effect my score as it was a personal loan between me and a relative. I also paid off an Australian student loan, and have reduced my credit card utilization from 100% to 52%, and will have the remainder paid off by the end of February.

A few days ago I applied for a $500 savings-secured personal loan with my credit union, in order to have an installment loan reporting. Once I have that, I will have 4 active trade lines reporting: a government student loan, 2 credit cards, and one installment loan. 

The only baddie I'll have remaining on my credit reports is a CapitalOne Auto Finance loan that I defaulted on in Feb. 2009 after the truck was totaled and I didn't have gap insurance coverage. It shows as a $4300 CO. My state SOL is 6 years, and since I'm 4 years since the DoFD, I've decided to let sleeping dogs lay and see what happens in the next 2 years. From what I've read on these forums, COAF is known for sueing at the last minute. I've considered offering a 50% settlement and see if they'll take it, but I'm worried about the delinquency date being updated to NOW if I do that, and killing the advances I've been making on my score.

My goal is to have 640 scores across the board by late summer. After a couple month trip overseas, I'd like to be in a position to obtain either a mortgage or a yacht loan (they're the same thing in my mind).

Thanks to everybody that has posted on these forums, I have learned so much from you!

[KittySaysMeow]

It's been 7 months since I last updated this, and wanted to provide an update.

As of a couple weeks ago, all three of my scores have finally hit 640 or above.

My attempt to PFD the Verizon collection account was a bust. I ended up just paying it to be done with it.

My credit card utilization is always less than 10% on the reporting day each month, as I pay off my one rewards card every *week*.

I've continued to let the Capital One Auto just sit. If I end up buying a house in 2014, I'm going into the mortgage process with the expectation of having to pay the charge off at closing, and I have the cash to do so.

My student loans just switched to a standard payment plan, more than doubling my monthly payment. The payment is not a hardship, but I am considering just paying them off. However, the interest rate is only 2.75% and I'm concerned about my credit scores dropping because of no longer having any installment loans reporting.

That's where I'm at! Thanks for reading.