My Credit Mess - Advice Appreciated

[inthematrix]

Like many posters to this board, my credit is in shambles. There's no real excuse for it except to say that I am one of those people who've never paid much attention to money and I never educated myself on credit and how to take care of it. It's only been in recent years that I actuallly did the necessary reading and learned how "normal" people take care of their credit.

Add to that the fact that I'm very good at ignoring unpleasant things and pretending they don't exist, and you have a recipe for horrible credit.

I was actually doing much better (for me) with my credit until about 2 and a half years ago when I was diagnosed with cancer. There was a period of about 8 months during which I was going through surgery and radiation that I fell back into old habits and just ignored the pile of bills I didn't think I had the energy to deal with. (Not making excuses. I realize now how short-sighted that was).

Back in May I started lurking on these forums.  I got copies of all 3 of my credit reports (from annualcreditreport.com). I've gone through them and made notes of everything that is affecting my score in a negative way. 

I really want to focus on cleaning up the mess of collections and charge-offs that are listed on my credit report. I'm hoping that you guys can look over my plan of action and let me know if I'm on the right track and/or suggest changes to the plan.

First the "good":

Open cards:

HSBC Opened 07/07. $500 limit. Balance is paid off each month. I had two 30-day lates Feb & June of 08 while I was recovering from surgery and undergoing radiation. No lates on this card in over 2 years.

Plan: Write a GW letter asking for the 2 lates to be removed from the report. Continue to pay balance each month.

Cap One Opened 08/10 $400 limit. (Secured card)

Plan: Make one small purchase per month. Pay balance each month.

I have also a few closed cards showing "never late" or "pays as agrees"  listed on the account from years ago.

Rent History:

My rental agent reports to Equifax and now stands at 6+ years, never late, $1400 per month.

Now the bad:

Charged off:

GEMB/Sam's Club Added 04/07

DOFD: 03/2008
 Sold to LVNV and paid (see below)

Plan: Not sure if it would do any good to request a GW removal, but it might be worth a try.

HSBC Opened 3/05 Closed 07/06

DOFD:07/2005

Plan: Any point in requesting removal?

Closed Cards:

First Premier (I closed)

DOFD: N/A

This card has several 30 day lates and 1 60 day. I closed the card when I realized that their monthly fee made it very hard for me to keep up with the balance and pay off each month.

Salute (they closed)

DOFD: N/A

This card has 2 30 day lates, 1 60 and 1 90. Was closed during the time I was sick.

Both the FP and Salute cards listed as closed, paid as agreed, $0 balance.

Plan: Request for GW removal of lates. Not holding my breath on these.

Collections:

ANFI 
DOFD: 02/2006

$146

Original creditor is listed as AT&T mobility
Reported: EQ, TU, EQ
Date reported: 02/2010

No idea what this bill is or how it was attributed to me. I've been an AT&T mobility customer since they were Cingular. I've never had an account closed by them.

I've already disputed to through the CRA and it came back as "verified.

Plan:  Send ANFI a Notice of Direct Dispute under FCRA 623(a)(8).

Alternate plan: Offer a PFD since it's only $146.

Central Credit Solutions - 6 listings (all medical)

$30 DOFD: 12/2008

$30 DOFD: 12/2008

$435 DOFD: 01/2008

$141 DOFD: 12/2007

$196 DOFD: 01/2008

$59  DOFD: 04/2006 Paid 01/2007
 

This is a small local collection agency but they have a reputation for not doing PFDs.

Plan:  Send GW request for removal of the paid account from 2007 and PFD requests for the unpaid listings. I'm not sure if it would be better to send one letter covering all 5 or to send 5 separate letters.

Southern Collections (medical)

Only listed on TU, no DOFD

Date of removal (via TU) 08/2011

paid in 2004

Plan: Send GW request for removal. If not, it will come off next fall anyway.

RJM Acquisitions - 3 listings

Not on EQ, no DOFD.  Removal dates from TU and EX below:

$70  Removal date 07/2012

$236 Removal date 08/11
$352 Removal date 08/11

I have no idea what the Literary Guild bill is. I'm guessing something my brother may have ordered (my brother is paraplegic and lives with me).

My plan would be to send a PFD request except that I don't have the funds to pay the other 2 accounts ($236 and $352 in full at present -- at least not if Central Credit Solutions agrees to a PFD on the accounts I have with them).

LVNV Funding

DOFD: 09/2007
Original creditor Sam's Club
Reported 10/08
Paid 10/09 (settled for less than full amount)

Plan: GW request for removal.

Portfolio Recovery

Not listed on EQ, no DOFD

TU and EX list  removal date as 08/2012
$930
Original creditor Collect America -- no idea what this is for
Added 06/08

Plan: Not to poke the bear. I don't have $930 and it's within the SOL for my state.

Student loans:

About 2 years ago I began working on rehabilitating all of my student loans (which of course were in default). I rehabilitated all except for one set and the rehabilitated  loans have now been purchased by Direct Loans and are in deferrment while I rehabilitate the last set of loans (so that they can be consolidated in with the others). That rehabilitation will be complete in January 2011.

My student loans are a whole separate issue. I'm having a lot of trouble getting Sallie Mae to remove the indications that the loans are in default and being paid by insurance, but I'll deal with another time on the Student Loan board.

For now I'd like to focus on cleaning up the mess of collections and charge-offs that are listed on my credit report.

As you can see, my credit is a mess. I truly am committed to taking care of my credit now and have been working to do this for the last two years. I'm the sole support for my brother and I'd like to be in a position to buy a house in the next 5 years or so.

I appreciate any advice you guys can offer.

Thanks in advance.

[Anonymous]

I would advise you to feel the CAs out first. Most people will say don't call them and this and that...as long as you're direct and don't act up; they're generally okay. I noticed you wanted to offer some companies the full amount for PFD, DON'T! I had two accounts with RJM and simply called them and they offered a reduction from nearly $900 to $425. I basically called them and politely said, "Listen, I have these two accounts with you guys listed on my credit report that I want off of it, what will it take?" Five minutes after I hung up, they e-mailed me the settlement offer which includes deletion of the account with credit bureaus. Trust me, they want the money just as bad as you want improved credit. I'm sure they're having a more difficult time collecting during these times and they're willing to get it done.

[RobertEG]

I wont comment yet, because important dates are lacking.

For each account in your CR, what is the date that you first went into default?

[inthematrix]

Sorry Robert. I almost included those; they're on my spreadsheet. Stand by and I'll relist the basic account info with DOFD.

Edited:  Okay, DOFD added to the original post for all all accounts listed on EQ and removal dates listed for the ones listed only on TU and/or EX.

Thanks again.

[nchomewardbound]

Hi Matrix,  long time lurker here, first post!  I was in a similar boat (cancer came out of remission back in '06, but luckily only endured a short set back).  Missed 4 months of work and my short term disability only paid 1/4 of my normal pay, so I quickly went thru all my savings just to stay afloat with bills and creditors.  Add to all that student loans, a divorce and a move, I'm JUST now starting to get back on track.  Almost every single extra penny I've gotten in the past year and a half, almost $13,500 to be exact, has gone to repaying towards my debts.  A lot of companies have allowed me to settle for less than half of the original amount, so there is hope.  In that time, I've raised my score 150+ points and I won't stop until everything is paid and my credit report is back to where it used to be (I was at 790 before I got sick again).  Like a lot of people have said on these boards, it pays to talk to the companies, as well as being honest and pleasant.  Cleaning up credit is very time consuming and habit forming lol I've become somewhat obsessed with it lately but hey, a lot of good will come out of it in the end.  Don't think about it too hard, just dive in and start attacking head on.  You'll adapt your plan as you discover your best strategies along the way.  Just keep chipping away at it.  I wish you the best in health and good luck getting your financial affairs back in order. 

[inthematrix]

Thanks homewardbound.  Glad you've been healthy the last few years. I'll send good thoughts your way.

Does anyone else have any response to my specific plans for each negative?

Robert, did the additional dates help?

[inthematrix]

BTW, here's the SOL for my state in case it helps:

Contracts under seal: 10 years, (A.C. 6-2-33)

Contracts not under seal; actions on account stated and for detention of personal property or conversion: 6 years (A.C. 6-2-34)

Sale of goods under the UCC: 4 years (A.C. 7 -2- 725)

Open accounts: 3 years (A.C. 6-2-37)

Actions to recover charges by a common carrier and negligence actions; 2 years, (A.C. 6-2-38)

Actions based on fraud: 2 years (A.C. 6-2-3)

[inthematrix]

bumping

[RobertEG]

Yes, the DOFD dates helped.  Most dont seem to indicate any immedaite deletion of any CO or CA within the 7 1/2 year period set forth in FCRA 605(c).

But a couple are approaching that date.

Without going into the details of each account.  here is how I would plan out my actions.

First, for reported monthly delinquencies on each OC account.

Each of these separately remain in your CR for 7 years from their date of delinquency.  SOL is irrelevant to credit reporting or deletion.

List each delinquency, along with its date, then add 7 years.  That is when it will fall from your CR,should you do nothing.

Dont initially differentiate between open, closed, paid, or unpaid accounts. List each derog.

If an acount is paid, then earlier deletion is done by way of a GW letter.

If the debt is still unpaid, then you can first attempt a PFD offer, but if  they dont accept, it may result in further escalation, such as a CO, CA, or legal action.  That is when your SOL comes into consideration, and also your consideration of doing a PIF to forgo any further damage.

Dont assume that, if any of the OC accounts had a CO or a CA, that settling the CO or CA will result in removal of the monthly OC derogs that preceded them.

Next, list each charge-off reported by the OC, or any collection posted by a CA,

It is only for a charge-off or a posted CA that your DOFD on the OC account has ANY relevance.

So, next to any reported CO or CA, ignore the date it was charged-off or placed into collection.  List the DOFD on the OC account next to each reported CO or CA.

Add 7 1/2 years to the DOFD on the OC account, and that is when the CO or CA will fall from your CR should you not obtain earlier deletion.

Those that you seek deletion of prior to their death by normal aging are the ones you want to concentrate on for earlier deletion.

If the debt on the CO or CA has been paid, then all you can do is GW.

If the debt is not yet paid, then you can try a PFD offer.  PFD offers are not without risk.  If you want to hold out for a PFD, then that is time to put serious consideration into the statute of limitations in your state.  IT may push them into filing legal action.  So know in advance whether you have a valid SOL defense before holding out on payment.

When you do all of that, you are probably going to have a scary spreadsheet of, maybe, 20 derogs to deal with.

However, I know of no way to prioritize action without doing that. Some are soon to expire from credit reporting, some have no threat of legal action, while others may have high risk for both continued credit reporting and/or legal action.

Those for which normal credit report drop dates are soon to occur, and SOL has expired, would drop down in my priority plan.

Those with relatively high debt. not soon to die of old age from your CR, and those still within SOL, would be my focal points.