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Credit not getting any better due to foreclosure...

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ajburt22
Member

Credit not getting any better due to foreclosure...

Maybe I should have posted this here in the first place... sorry.  

 

I need some advice on my current probably not-so-unique situation.  I'll try to make this short and to the point to gain the maximum responses possible... but I'm sure I'll ramble.  

 

First off, my credit situation:  I lost my job in 2007 and was out of work for approx. 7 months.  During this time I racked up my credit card and loan (one unsecured loan) debt up to about $119,000; this doesn't include the $14,000 I owed a bank for my Auto Repossession.  So I was $133,000 in debt with no car, no house, pretty much no "nothing"... all credit cards/1 loan.  I had good credit back then, not so much anymore.  I got a job in Dec 2007 and have earned $172K this year to date.  After taxes and child support it never adds up to as much as it sounds, but my current debt is down to $78,000 from $133,000 in a years time.  I hope to get this down to $50K in the upcoming months with my "should be large" tax return and my income, as I net about $12,000 monthly.  Before my credit dilemmas began in 2007 my credit scores were unusually high for someone my age (27 years old now).  They were all in the high 700's and I think this was attributed to starting to build at 18, being educated from an even earlier age, and making all the right decisions up to a certain point; to include never missing a payment and purchasing a house at 23.  

 

Okay, so hopefully everyone gets a good idea of me trying to get myself on the right track credit-wise.  However, as part of my divorce my ex-wife got the house we owned and in our divorce decree not only was it stated that I was held harmless of all rights to that property but she was also supposed to refi in her own name.  She never refinanced, and one day decided she didn't want to pay anymore and just moved out.  I tried to salvage it, but on my income at the time with the $1,200 to child support I was drowning.  Now thats it's almost 2 years later, I'm still showing about $20k+ in debt on my credit reports for past due balances owed for 2 accounts associated with this foreclosure that shouldn't even belong to me.  I've tried everything, and all the credit bureaus have stated that a divorce decree does not trump my responsibility to repay the loan.  In the end, I figure I'll have to come out of pocket one day... to pay at least half of the balance owed after the house auctioned.  BUT I almost forgot, she also filed bankruptcy late in 2007 and included the house in it, so I'm not sure how this effects me either.  Will I have to go to court to get a judgement on who owes what?  Should I owe anything based off the divorce decree and/or her bankruptcy?  Is there anyway to get this off my credit?  It's been over a year since the auction/her bk, so I'd think that there should be something I can do now.  

 

Any help will be greatly appreciated and I'll post more info if necessary.  Thanks.  Aaron

 

As you can see, my scores haven't really moved much even if all the debt I'm paying down pretty fast.  EX even went down.  Smiley Sad 

 

May 2008: EQ 545, EX 596, TU 554

Dec 2008: EQ 633, EX 555, TU 643  

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Credit not getting any better due to foreclosure...

On the divorce decree situation....only thing you can do is take her back to court for not following orders. Now that the damage is done to your credit, I am not sure that this would do anything for your credit.

 

As you pay the CC balances down your score should creep up.

 

Keep all payments current.

 

If you have lates on open current accounts, try sending GW letters.

 

The foreclosure will remain for 7 years.

 

Is this foreclosure and high debt the only negatives on your report?

 

 

Message 2 of 6
ajburt22
Member

Re: Credit not getting any better due to foreclosure...

Thanks sidewinder for such a quick response.

 

All my CC's are closed due to non-payment in 2007, but none went to collection or charge-off.  I will eventually pay them all off this year, so hopefully this will still allow my credit to creep up.  Everything I have is and has been current for the past year, except for the accounts associated with the foreclosure.

 

Yes, of everything I've been through I'm really surprised that late payments and the foreclosure are the only thing showing negative on my reports.  Well, I did have the auto repossession which went into charge off but I'm paying $1000 a month and only owe $8000 as of right now.  This will be PIF by March.  When it moved to charge-off I actually noticed my scores went up, which I thought was weird.  But they since creeped back down... especially my EX.

 

Aaron 

Message 3 of 6
Anonymous
Not applicable

Re: Credit not getting any better due to foreclosure...

ajburt22,

 

I've removed your duplicate post that was over on the General Credit Issues board.

 

-sidewinder

Message 4 of 6
ajburt22
Member

Re: Credit not getting any better due to foreclosure...

I was reading how some people recommend paying off loans in their full term and not any sooner to better help their credit score; is this the same case for credit cards?  My current situation is as follows:

 

Loan - $28,200

BofA CC - $14,365

PenFed CC - $12,265

BofA Visa - $6,350

BofA Visa - $5,764

 

Once I get the balances on my CC's below 30%, should I just make small payments to keep them reflecting good standing?  Keep in mind that all of these accounts are closed though.  Smiley Sad  Or should I just pay everything off as fast as I can?

 

Thanks,

Aaron  

 

May 2008: EQ 545, EX 596, TU 554

Dec 2008: EQ 633, EX 555, TU 643  

 

Message 5 of 6
llecs
Moderator Emeritus

Re: Credit not getting any better due to foreclosure...

Utilization plays a huge part in your score. Ideally, you'd want to bring down your balances below 10% on each individual card with 1/2 of your cards reporting $0.

 

Since your cards are closed, they will continue to factor into your utilization up to the point where you pay them off. Once they are paid off, because they are closed, they will be removed from the utilization calculation.

 

I would pull each report to see how they are reporting. If they are reporting a $0 CL, then you need to pay off that card ASAP as FICO would be reading it as maxed out. If any of the cards have a balance greater than the reported CL, then I would pay off those in full ASAP.

 

Proceed carefully, as basically any CC, closed, with a balance is technically in default. Most CCs will let you continue to make payments until paid in full. However, some can be quick to charge-off the debt and send you to collections or sue for the balance owed. I'd be prepared to pay off all the cards at a moments notice just in case the call in the debt.

 

If CLs are in check, and they are open to let you pay regularly, then I'd keep paying, but never be late. And send as much as you can monthly.

 

 

Message 6 of 6
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