So Confused

[annikadaisy]

I've visited this forum for the first time today and have spent hours reading posts, but the more I read the more confused I become.

Basically, I had a lot of credit cards -- approximately $30,000 worth.  I was paying the minimum - about $1,000/month - and realized that at that rate the principal would never go down.  I was in way over my head.

So, I stopped paying them.  Ignored everything for 6 or so months.  Lost job, medical bills, death in the family, etc.  It was easier to run away than face my problems.

That all changed about 6 months ago.  I will be debt free in November of this year.  I have paid off almost all of my accounts (Bank of America, Amazon, Kohls, Chase, Gap, Merrick, Capital One, Wells, etc.) and will finish off paying a $12,000 Citi bill in November. Okaty, I'm not considering my $60,000 student loan debt which I still avoid the daily phone calls about.

My credit is shot.  It's currenty at 590. 

Looking for advice on how to improve it.  Will GW letters work since I paid off the debts through credit agencies after not paying anything for 6 months plus?  Should I contact the student loan company and start setting up payment on that?  What is the best way to improve my credit?  Did I make a mistake by paying off all of my debt since it will still be on my record? 

Would love to hear from the experts.

[bluescale]

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@annikadaisy wrote:

My credit is shot.  It's currenty at 590. 

Looking for advice on how to improve it.  Will GW letters work since I paid off the debts through credit agencies after not paying anything for 6 months plus?  Should I contact the student loan company and start setting up payment on that?  What is the best way to improve my credit?  Did I make a mistake by paying off all of my debt since it will still be on my record? 

Would love to hear from the experts.

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I'm not an expert, and I can't give you a whole lot of advice.  What I will say is that you didn't make a mistake in paying off all your debts.  You borrowed the money, so it was your responsibility to pay it back.  Whether you paid it back in the best possible way or not, I couldn't say.  I'll leave that determination up to the experts.

As far as paying off your debts, where the sold to debt collectors, or were they help by the original creditors?

[rckstrscott]

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@annikadaisy wrote:

I've visited this forum for the first time today and have spent hours reading posts, but the more I read the more confused I become.

Basically, I had a lot of credit cards -- approximately $30,000 worth.  I was paying the minimum - about $1,000/month - and realized that at that rate the principal would never go down.  I was in way over my head.

So, I stopped paying them.  Ignored everything for 6 or so months.  Lost job, medical bills, death in the family, etc.  It was easier to run away than face my problems.

That all changed about 6 months ago.  I will be debt free in November of this year.  I have paid off almost all of my accounts (Bank of America, Amazon, Kohls, Chase, Gap, Merrick, Capital One, Wells, etc.) and will finish off paying a $12,000 Citi bill in November. Okaty, I'm not considering my $60,000 student loan debt which I still avoid the daily phone calls about.

My credit is shot.  It's currenty at 590. 

Looking for advice on how to improve it.  Will GW letters work since I paid off the debts through credit agencies after not paying anything for 6 months plus?  Should I contact the student loan company and start setting up payment on that?  What is the best way to improve my credit?  Did I make a mistake by paying off all of my debt since it will still be on my record? 

Would love to hear from the experts.

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Welcome to the MyFico community!

I would suggest going to this thread and get aquainted with the terms and the steps required to take control of your situation:

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Frequently-Requested-Threads/td-p/224981

First, are you delinquent on your loans? Current late payments are score killers. 120 day lates are REALLY bad. Are these way behind or are you current? What is your loan statuses?

All of these credit cards, did they charge off the debt or just show lates? are they still open? What are those statuses?

Do you have any collection accounts?

Paying off debt is never bad. This debt is realtively new, it could have hayunted you for years. Judgements, collection accounts 

-scott

[annikadaisy]

I think they were sold.  I've paid money to credit collectors only - never the original stores (i.e. Macys, Kohls, etc.)  About 30 days after paying off the debt, I  contacted each of the credit agecies and asked for a settlement letter.  I've had no problem except with Capital One.  That's a stressful headache that I don't want to visit right now.  I ignored all phone calls/letters/threats until I was in a position to address the debt.  Starting last November, I've paid off the majority of what I owed.  I'm happy I did it.  Yes, a lot of it was interest and fees, but it's a great feeling to go from $30,000+ in debt to debt free (in November and ignoring the student loans that cannot be paid off in my lifetime).

[annikadaisy]

I had several credit cards that were 120+ days late, but I paid them off.  In the last 25 years, I had a bad spell of 6 months.  Is there anything I can do?  All of the accounts are closed.  Will GW letters help?  The "bad spell" was recent, so I'm afraid that I'll have to wait a long time to have my credit restored. 

[bluescale]

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@annikadaisy wrote:

I had several credit cards that were 120+ days late, but I paid them off.  In the last 25 years, I had a bad spell of 6 months.  Is there anything I can do?  All of the accounts are closed.  Will GW letters help?  The "bad spell" was recent, so I'm afraid that I'll have to wait a long time to have my credit restored. 

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Take a look at rckstrscott''s signature.  He started off at 498 and now is in the 700's.  It can be done.  I'm sure goodwill letters will help.  To help the people on the forum give you the best advice, it would be helpful if you listed the tradelines showing on your credit report, and their current status.  That'll be a good starting point.  It might feel a bit embarrassing to lay it all out there, but if you look around at this forum, there are a lot of people who took that step, and many of them (those who were willing to work hard at it) are now in a much better place thanks to the advice they received.

Good luck.  You can do it.

[rckstrscott]

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@bluescale wrote:

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@annikadaisy wrote:

I had several credit cards that were 120+ days late, but I paid them off.  In the last 25 years, I had a bad spell of 6 months.  Is there anything I can do?  All of the accounts are closed.  Will GW letters help?  The "bad spell" was recent, so I'm afraid that I'll have to wait a long time to have my credit restored. 

---

Take a look at rckstrscott''s signature.  He started off at 498 and now is in the 700's.  It can be done.  I'm sure goodwill letters will help.  To help the people on the forum give you the best advice, it would be helpful if you listed the tradelines showing on your credit report, and their current status.  That'll be a good starting point.  It might feel a bit embarrassing to lay it all out there, but if you look around at this forum, there are a lot of people who took that step, and many of them (those who were willing to work hard at it) are now in a much better place thanks to the advice they received.

Good luck.  You can do it.

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to be fair, I'm in the 680s now due to some util, lowering of AAOA after going on an credit spree after closing on the loan..

Totally doable tho! Just keep plugging away.. took me about 18 months

-scott

[annikadaisy]

Thanks! What are tradelines?

[guiness56]

TL are the accounts on your CR.