Thanks for the quick reply. I see you have done something to improve your credit score. I. Was wondering what should I tackle first as far as negative items. I have 4 collection, 2 charged-off and 3 late payments.
@Amiashu12 wrote: Thanks for the quick reply. I see you have done something to improve your credit score. I. Was wondering what should I tackle first as far as negative items. I have 4 collection, 2 charged-off and 3 late payments.
Amiashu,
You should read ABCDs 11 Rules. It's a link you can click on in his signature block. ABCD knows his stuff! Read anything he writes!
@Amiashu12 wrote: Thanks for the quick reply. I see you have done something to improve your credit score. I. Was wondering what should I tackle first as far as negative items. I have 4 collection, 2 charged-off and 3 late payments.
I'm about to make a post to add to my signature line about this reply because it's asked often. Here is my recommendation for people:
Start emergency savings. If you can't put 10% of your paycheck into emergency savings, you need to cut spending (budget) or get a second job. This is step 1. Every paycheck, 10% goes into emergency savings, period.
Look at your emergency savings balance and divide it by 2 (50%). This remaining number is what you are going to use to negotiate/pay down derogatory debt. If you save up $2000 in your emergency account, you are allowed to use $1000 of it to negotiate debt.
If you have late payments with current open creditors, pay off those balances NOW to $0 and in 3-6 months, start the goodwill saturation technique to get them to remove it. Write hundreds of letters over a year to get them to remove the lates.
The most painful score killer is a chargeoff with a balance with the original creditor. You want those reporting $0, so take your negotiating money sitting in emergency savings and call/email/mail all your chargeoffs with balances to negotiate a payoff. Pay all of it, negotiate a smaller amount, doesn't matter, you need those gone first and foremost.
After all chargeoffs report a $0 balance, now use your 50% of emergency savings built up to attack collections. In writing by USPS, send them PFD letters (pay for delete) and ask them to respond in writing. If they offer an actual PFD, pay it off and get it deleted. Paying collections to $0 has no effect on your FICO score at all, those collections have to be deleted for you to see a bump.
Throughout this process, 10% of your paycheck goes into emergency savings forever. You never use it for vacation or the bar or dining, you use it only when your income stops or you're injured. You will put that 10% away for the rest of your life so you have no reason to ever be late again.
@Amiashu12 wrote: Thanks for the quick reply. I see you have done something to improve your credit score. I. Was wondering what should I tackle first as far as negative items. I have 4 collection, 2 charged-off and 3 late payments.
I'm about to make a post to add to my signature line about this reply because it's asked often. Here is my recommendation for people:
Start emergency savings. If you can't put 10% of your paycheck into emergency savings, you need to cut spending (budget) or get a second job. This is step 1. Every paycheck, 10% goes into emergency savings, period.
Look at your emergency savings balance and divide it by 2 (50%). This remaining number is what you are going to use to negotiate/pay down derogatory debt. If you save up $2000 in your emergency account, you are allowed to use $1000 of it to negotiate debt.
If you have late payments with current open creditors, pay off those balances NOW to $0 and in 3-6 months, start the goodwill saturation technique to get them to remove it. Write hundreds of letters over a year to get them to remove the lates.
The most painful score killer is a chargeoff with a balance with the original creditor. You want those reporting $0, so take your negotiating money sitting in emergency savings and call/email/mail all your chargeoffs with balances to negotiate a payoff. Pay all of it, negotiate a smaller amount, doesn't matter, you need those gone first and foremost.
After all chargeoffs report a $0 balance, now use your 50% of emergency savings built up to attack collections. In writing by USPS, send them PFD letters (pay for delete) and ask them to respond in writing. If they offer an actual PFD, pay it off and get it deleted. Paying collections to $0 has no effect on your FICO score at all, those collections have to be deleted for you to see a bump.
Throughout this process, 10% of your paycheck goes into emergency savings forever. You never use it for vacation or the bar or dining, you use it only when your income stops or you're injured. You will put that 10% away for the rest of your life so you have no reason to ever be late again.
We are talking about the DoFD right? TrustedID Premier provides this at least for Equifax reporting not sure on others. They do offer a 3B plan that might have DoFD for other 2. Got my 1B account for free from the Equifax breach. No score provided, just reports.
