@PLI21403 wrote:Background:
My credit score is 546 (EX). I have a substantial amount of CC debt. Most of those accounts have been closed and sent to CAs. I was able to pay off my mortgage a few weeks ago from sale of my home. I have one exisiting "good" CC that has a good payment history. I recenty reduced the debt on that account to 30%. I have a relatively new auto loan that is current.
My wife's score is 576 (EX). Her CR shows a couple of relatively small outstanding debts - also closed and sent to CAs. She is listed on the same "good" CC that I hold but has nothing in her own name. Credit Karma recommended she get a secured credit card which she has applied for. Together, we are trying to raise our scores for both long term and short term goals -- one of which is to qualify for another mortgage.
I have several questions:
1) The one CC account that is closed but doesn't appear to be in collections is AMEX. The balance is relatively small compared to the others. Amex conitnues to post a delinquency every month. They recently sent a letter seeking to settle the account. It seems like a no-brainer to deal with this particular account first, but also want to consider this action in the context of all of our outstanding debts. Amex if I remember correctly does not send their debts to an outside CA so you will be dealing with them directly and I advise you settle if you ever want a chance at another Amex, they have a very long memory, I am 31 yrs from a BK that included Amex and cannot obtain another one until I settle it, I never will since it was discharged in BK and I dont really need their cards, everyones case is different.
2) How do we proceed with the othe CC companies and CAs? Do we contact the original creditor and attempt to begin a process to fix the debt or work with the CAs? We will not be able to afford to pay off the debt with these larger accounts -- but we can probably begin to make smaller payments? Before you contact anyone you need to know what your states SOL is, any debt that is still within SOL can result in a successful court judgment so you need to tread lightly if you do not have the funds to settle in full. You would want to deal with the OCs whenever possible but you only can if they still own the account and are willing to deal, if they are reporting a 0 balance they most likely have sold the debt to a JDB. It is sometimes to your advantage to do nothing until the debt is past SOL just depends on your circumstances and financial ability.
3) What reflection in CR might we see with the payoff of our mortgage? It represented 75% of our debt? If the mortgage was paid without negatve entries that most certainly is in your favor, if there are lates involved with it then the effect of them will decrease over time. You can also attempt to get the lates removed with GW letters asking for forgiveness.
4) For smaller CC accounts that my wife had -- we could probably pay these in full, as well. What's the best way to deal with these? CAs or original creditors? Address these as I outlined above in contacting creditors. And please help us understand about the "letters I see referenced in some of these threads that are designed to get the bad credit report removed from our reports. I will send you here http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Frequently-Requested-Threads/td-p/224981 This area of the forum has some great info on what things are, sample letters, etc. You will be most interested in the PFD & GW Letters Sections.
5) This feels very comlex -- with lots of elements to our issue. Is there a credit rebuiding advisor that anyone can recommend? Or can we do it ourselves witht he expertise of this forum? There is nothing a credit repair organization can do that you cant do yourself, all they are going to do is send dispute letters trying to get things removed they are not going to actually settle anything, there are Debt Management guys out there as well, I dont recommend using them either as you will be paying them money that can be used to settle your own debts. There are a lot of knowledable people on this board and the back threads held on this board hold a wealth of info and guidance on how to approach things.If there is something you need help with just start a thread like you have here with the specific questions. I wish you well in your journey
WE greatly appreciate any advice and help!
@PLI21403 wrote:I have a few follow-up questions:
First, what do you mean by "tread lightly" if we don't have the funds to settle in full? Avoid contact? Make partial payment? It means be careful in making contact if you dont have the full amount of the debt as they can always refuse any payment offer or settlement and sue. In order to avoid the judgment you would want to be able to pay it off before the court renders a decision.
Second, how do we determine if the account has been sold to the CA? The OC has to report the balance as 0 and there normally be comments on their TL that may say transferred to another lender, sold to another lender, etc.
Thanks again for any and all guidance.
@PLI21403 wrote:
I can't get the link in the original reply to open -- can you check and see that it is correct?
Thanks!
http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Frequently-Requested-Threads/td-p/224981
Its up in the stickies (Freq requested threads)