Help With Rebuilding Process

Anonymous · ‎01-03-2021

Hi everyone !

im currently in the process of rebuilding my credit. I've done a lot with the help of this community. Have had a lot of success with PFDs GWs CLI (with NFCU). But I still

have more work to do. I'm currently at a cross roads where I have 3 collections and 2 closed charge offs (with reporting balances) on my report.
Closed Charge offs 4 years in

Macy's 1.9k

CFCU 5.3k

Collections 4 Years in.

PRA 11k

MCM 7.7k

MCM 3.1

I will be paying for the collections all with PFD. But I'm wondering should I pay for those closed charge offs. MyFICO reads the balances as current balances. And it's affecting my score. What should I do ? Pay for them ? PIF?,PFD? Or finish my collections first ?

thank you!

Anonymous · ‎01-03-2021

If by MCM you mean Midland, they like PRA will honor PFD agreements, but with one caveat - the debt must have defaulted two years ago or more. Midland and PRA both will PFD settled balances as well so you may be able to negotiate lower amounts and still have them removed. Be aware though that Midland is not afraid to sue, so depending on the age of those accounts, you may want to get going with an arrangement with them.

Anonymous · ‎01-03-2021

@Anonymous wrote:
Hi everyone !

im currently in the process of rebuilding my credit. I've done a lot with the help of this community. Have had a lot of success with PFDs GWs CLI (with NFCU). But I still
have more work to do. I'm currently at a cross roads where I have 3 collections and 2 closed charge offs (with reporting balances) on my report.
Closed Charge offs 4 years in
Macy's 1.9k
CFCU 5.3k

Collections 4 Years in.
PRA 11k
MCM 7.7k
MCM 3.1

I will be paying for the collections all with PFD. But I'm wondering should I pay for those closed charge offs. MyFICO reads the balances as current balances. And it's affecting my score. What should I do ? Pay for them ? PIF?,PFD? Or finish my collections first ?

thank you!

Once all the CAs are deleted after PFD and settling, you should hopefully see a nice score bump.

I will say that the majority of the time PFD is for CAs. You can always try to negotiate it with the creditors for the COs, but it will most unlikely to happen. With that said, since they are updating with balances regularly, once you PIF/settle each CO, and u like the CAs, you should hopefully see score improvement along the way.

CAs generally require them all to be gone to see the biggest score boost, where with COs, you can see decent progress as you chip away at them.

It is your choice which to tackle first, vut don't get discouraged regarding the CAs if you see little score improvement until they are all gone.

Like mentioned above, you could probably settle for a nice chunk off since the CAs are fairly old and have fairly large balances and the will be deleted, as both those CAs both do PFD and settle for less.

I would also note, it may be worthwhile to deal with the COs sooner than later in case they get sold to a CA that does not do PFD and you get stuck with the double whammy of both the CO and the CA on your CRs. PIF or settling for less should make no difference scorewise since they will be updated to a $0 balance. If you do settle for less, a remark will be made stating "paid for less than the full balance", so it will be up to you whether that will be detrimental from a UWs perspective when seeking credit in the future.

Good luck!

mycreditscoreisfair · ‎01-03-2021

Generally, my advice is to deal with the low hanging fruit first. But it appears you've already done that and you have some significant balances to deal with.

The chances of having a charged off credit card removed from your credit report are almost zero. But you can settle them and stop the bleeding so that your utilization goes down. If you don't need/plan to get another Macy's or CFCU card, I would settle those and get them over with.

Then tackle your collections. I know PRA is willing to settle and delete once it's paid.

Starting score (January 2020): 454 (TU)
First goal (December 2020): 580 (TU)
Second goal (August 2021): 670 (TU)
Current scores: 679 (TU), 665 (EQ), 658 (EX)
Current goal: All three bureaus over 670

Declined credit cards: First Premier Bank, Verve, Self, Credit One, Today

OmarGB9 · ‎01-03-2021

I would advise you to pay off those COs, whether in full or settled. You don't want to risk them turning into additional CAs and having to deal potentially with a CA that doesn't do PFD, as well as the double-whammy of a CO and a CA. The CAs you already have do offer PFD, even with a settlement, so those should be easy to take care of.

Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:

Current FICO 8 scores:

Anonymous · ‎01-03-2021

Lenders are more willing to approve when collections and COs are paid, and that could be the only thing standing between you, and an approval. I had a CO from Discover a couple of years back, which I was able to pay last year, and believe me, everything has been so much better ever since I paid it.

Now, I highly doubt any lender would agree to PFD when it comes to a CO, but you can most certainly settle for less than full balance. They do add a remark to the account, but I have never had a problem with it or had any lender ask me about the account being settled for less instead of PIF.

It's a long journey, so I am wishing you the best of luck in rebuilding your credit and remember, patience is key to everything.

Anonymous · ‎01-04-2021

Thank you guys for all this help.

Im calling Macys and midland today to settle.

Anonymous · ‎01-04-2021

Hi yall, I called Macys, They said they are no longer collecting on the account and that they dont have much information on the account anymore. That they will be sending me a letter to provide to the 3 main Bureaus. I was so confused by that lol.

Midland was easy we agreed on a 45% discount on the debt.