Rebuilding Advice and Guidance

Anonymous · ‎09-04-2017

Hello all,

I have been looking at my credit reports wondering what the next steps would be for bringing up our scores. The budget is tight, so I'm trying to avoid putting money towards any credit related problems if it's not going to have a positive impact on our scores. Here is the short story:

Wife and I are currently sitting across all three bureaus in the 450-490 range. Chap 7 in 2012, however most recently I had a $700 medical bill that was sent to collections. This surprises me because I'm 30 yrs old and this was for blood work for a wellness check. Second, we have two auto loans that have been paid off within the last year, however both are reporting as open with a balance. They are also still reporting as current with no lates, even though they have been paid in full for the last 6 months.

My questions:
- Is it best to pay the collection accounts off, or speak to the collection agency for a pay for deletion? I see it as the damage to the score has been done and paying them off won't help with an increase.

- Should I dispute the two open auto loans as reporting inaccurately even though they aren't reporting negative? Some of my research shows that having a closed auto loan would decrease my score, so I'm just unsure of how to handle these.

Our scores are this low due to a bankruptcy back in 2012. Currently, my wife has a Cap One Platinum card for $500 and we both have Fingerhut Fresh Start. I burned Cap One in the BK, so I was denied for there secured. What other options do we have to get some sort of positive credit reporting to pull up these scores? I have read about the Alliant or State Dept Credit Union secured loans, but we are in Chexsystems for a charged-off account and the initial funding for these secured loans would be very tough to fit into the budget. However, if doing these would have a positive impact on our scores we can make it work. We both turned 30 this year and it's time for us to quit living in denial and fix our credit. Any help you guys may have would help us tremendously. Any further questions you may, just let me know.

Thank you.

Anonymous · ‎09-04-2017

Thoughts? Anyone?

Gidgetmom · ‎09-04-2017

Contacting the collection agency is tricky. How old is the collection? Who is the collection agency? Have they sent you any settlement offers? Search these forums for the collection agency name and see if anyone else has had experience with them?

i wouldn't dispute the auto loans if they are a positive and give you points for your installment category. I have an old AU account that was closed in 2004 still showing on my reports. It's a positive account, so I've never done anything with it. It was opened in 1985 and still helps my age of accounts.

I have heard Open Sky secured card has helped some folks. Discover secured card is great. I started with Credit One unsecured, but really do not recommend it. High Interest from the moment of purchase, annual fee up front and then monthly during second year. Cap One is usually my "go to" for rebuilders....Lemme ponder this. Hopefully others will chime in when they recover from their Labor Day celebrations.

Anonymous · ‎09-04-2017

I appreciate the words of advice. To answer some of your questions:

- Account Resolution Corp has the medical collections for $700 since Dec 2013.
- Credit Collection Services for a $345 Progressive Insurance bill reported on Sep. 2015.
- Stellar Recovery in Feb 2017 for Dish Network bill of $1,100. I had disputed this as inaccurate, but was later told it was a breech of contract fee plus final bill. Also, Enhanced Recovery Corp is also reporting this same collections on my Equifax report, so it's showing for both Stellar and Enhanced on my equifax.
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Gidgetmom · ‎09-04-2017

The latest scoring models are starting to ignore paid medical collections. I wouldn't call them though. If you can pay it, you can send a letter offering to pay for delete. They may not accept a PFD.

Once it's paid, you can always write a goodwill letter requesting the Collection agency remove the tradeline from your report. Early in my rebuild, I had 3 unpaid medical collections hurting my score. I requested a pay for delete and was told they wouldn't. I continued to make payments on it. Every time I gave them money, I asked them to reconsider and always got a "No". After they were paid, maybe a couple of months after, I sent a goodwill letter requesting they be removed, They were all removed within a week. As always, YMMV. It never hurts to ask. All they can do is tell you No. You're no worse off even if they say No. Be kind during your negotiations to pay off or settle. Collection Agencies are not used to being treated nicely. You never know...you just might soften them up!

Who actually has the Dish collection? Stellar or Enhanced? Seems the debt has been sold already, just wonder who you would need to deal with...

I wish you the b st of luck and hope that you get some great advice on this thread.

Anonymous · ‎09-04-2017

When you mention the latest scoring models in reference to the fico scores, where are you finding this information?

Gidgetmom · ‎09-04-2017

Boy, now your really putting me to the test!

I think it's Fico 9 that ignores paid medical collections. They still show on your report, but do not impact your score. If you google search "Fico paid medical collection" you should find some reading in this subject.

Anonymous · ‎09-05-2017

@Anonymous wrote:

My questions:
- Is it best to pay the collection accounts off, or speak to the collection agency for a pay for deletion? I see it as the damage to the score has been done and paying them off won't help with an increase.

- Should I dispute the two open auto loans as reporting inaccurately even though they aren't reporting negative? Some of my research shows that having a closed auto loan would decrease my score, so I'm just unsure of how to handle these.

we are in Chexsystems for a charged-off account and the initial funding for these secured loans would be very tough to fit into the budget. However, if doing these would have a positive impact on our scores we can make it work.

1. MAIL in PFD Letters as a first combat to these collection agencies. Do not sign them, and make sure the letter specifies that it is NOT an admission of ownership of the debt. Send them with certified mail + return receipt so you can maintain a paper trail. If that fails then you would want to look at paying them off, and then sending Good will letters for deletion once they're paid.

example PFD letter i've used on collections before: http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Official-Rebuild/m-p/4994169/highlight/false#M537223

2. I'd say leave the Auto loans alone (at least for now) especially if there are no negative marks on them

3. There are ways to get out of chexsystems, but you should also locate a list of credit unions in your area and call them to see if they use Chex for new accts. They are generally more lenient than the major banks and are more willing to work with you. A local credit union could also have a decent offering for secured cards. Having positive CC Tradelines on your reports will certainly help, just make sure it's paid in full by statement cut each month. My suggestion is trying to find a card that graduates over time like Discover it Secured, NFCU nRewards, BOFA BankAmericard Secured, Citi, and or Wells Fargo. For more info on Chex, go grab your Chex and EWS (similar to chex) reports so you know exactly what's on them:

https://creditboards.com/forums/index.php?showtopic=547172

use these links to further dispute and clean up your chex file:

https://creditboards.com/forums/index.php?showtopic=339240

https://creditboards.com/forums/index.php?showforum=75#

Anonymous · ‎09-05-2017

@Anonymous wrote:
When you mention the latest scoring models in reference to the fico scores, where are you finding this information?

I can also confirm it is FICO 9 that treats medical debts with less negative result- however, the use of these scoring models isn't very wide-spread at this point, so I'd stay focused on clearing those things off your reports even if they are showing as paid.

more info on FICO 9: http://blog.credit.com/2015/07/the-impact-of-medical-debt-on-fico-scores-121229/

Anonymous · ‎09-05-2017

@Rbro - thank you for the insight into chexsystems, I will definitely look to see what I can do to clean those up. Credit unions are slim in our area and the one we spoke stated that Chex systems had to show paid before they would open an account. We were lucky to get a second chance account with a smaller bank, but it is located in another state and the inconvenient factor of not being able to deposit is hurting us. It's tough to have to wait five days for a payroll check to clear after doing a mobile deposit .

Another question- When I send out a PFD letter will I get something back saying whether or not they will accept my request and by what date I need to pay them or do Insend the letter, wait about a week and then pay them?