Recent College Grad w/ 638 because of collection- Need Advice

[Anonymous]

Hey guys,

New to the forum. I want to layout a scenario for you guys and get some advice.

I just recently graduated from the University of Michigan (Ann Arbor) and landed a great new job in Chicago. I don't have a ton of cash in the bank right now, so I am looking to get a credit card to help cover some of my moving expenses that I can use on a regular basis after the move. I just need some cash flow cushion to get me through the first three weeks between moving in, and actually getting my first paycheck with sign on bonus. I have a good entry level job as an analyst and am starting at 55k per year, but expect it to rise quickly.

My FICO score is a 638, which isn't great, I realize. It is mostly hurt because I have a short credit history, I have 20k in student loans still, and I HAD A COLLECTION.

So I have 8 loan accounts that are really saving my score. I have been on time on all of them and they range between 1-4 years old. Student loans.

The collection is what I really wanted to ask about. I had surgery about three years ago, my parents always had paid my med bills with insurance. We thought it was all taken care of. About a year and a half ago I saw a collection pop up on my report. Immediately contacted the agency and made full payment. I was flabergasted. Apparently, there was a mixup between what my Dad thought insurance covered and what they actually covered. It wasn't a question of not being able to pay, simply not knowing that he still owed on the account. He got statements from the hospital and "assumed that the insurance was just taking a while to sort things out with the billing department"  This really hit me out of nowhere. The collection was 1.5 years ago and was taken care of immediately to re-iterate.

What advice do you guys have about this?

So what I am really looking for is some advice. Will I be declined from all credit cards? Any suggestions on getting a loan or some type of financial cushion until my income-gap is solved? Also, is there anything I can do to remove that collection from my report? (I know I should have been more responsible for my own finances but my parents covered the cost of the surgery and the insurance like they always have, and I had a three week recovery period, so by the time I came back to, everything seemed like it was handled)

[Leadberry]

Mistakes happen; it's understandable.  You could send the CA a letter explaining your situation and asking them to remove their reporting of the debt from your credit reports, but the process is time-consuming and won't be of any use to you in the next couple weeks.  The fact that you just moved and started a new job will probably hurt you with potential creditors.

Given the circumstances, I'd say your best chance at getting an unsecured, general-use credit card will be with Capital One.  Even if you are approved, you probably won't get a stellar limit and it may take several days for the card to arrive.  You could also try applying for a card at a local credit union; they seem to be more "relaxed" when it comes to extending credit.  If approved, you'd probably be more likely to get a better initial CL.

Google "credit pulls database."  Go to the site and search by credit score.  You'll be able to see who got credit approvals with similar scores, as well as the lenders and CL's.  Good luck, and congrats on the graduation and the new job!

[SammyChance]

I was in a similar situation.  Find out who owned the debt when it was paid off; the original creditor or the collection agency.  If the original creditor held the debt, contact them, explain your situation, and ask that they instruct the collection agency to stop reporting.  This worked for me and the collection was removed from both Experian and Transunion within 3 days. (Equifax took considerably longer and a second request from the collection agency, but it's completely gone now.)  I'm not sure if you would have the same outcome if the collection agency bought the debt, they seem to be less cooperative, but worth a shot.  Or two.