So many questions...

[Anonymous]

Hey everyone,

I've read these forums for a while and am finally deciding to get proactive in fixing my credit, very much encouraged by all your stories.

Here's my situation:

I had some monumental debt, defaulted on 14 (yes, 14) accounts.  They've almost all been settled, "legally paid in full for less than full balance."  Now that I'm a full-time employed adult (I was a kid when I got those cards), I really want to start paving the way for good (ideally, great) credit within the next 5 years.

My questions are as follows:

1. The most recent of these accounts will fall off by 2015, some falling off as early as next year: will their age start to lessen their negative impact to my credit score?

2. I have two unpaid collection accounts, both for less than $50 apiece.  They'll both fall off in less than three years.  I'm very willing to pay them, but will paying them now re-age them and make them stick around for even longer?  If so, which is worse?  A re-aged paid collection or an unpaid, falling-off-in-the-near-future collection?

3. So many late payments.  Several over 180 days.  Can a GW letter remove multiple lates on one account?  And if it can, is it pretty unlikely that the banks would grant it?

4. At what point do late payments lose their sting to my score?  A few years?  Never, until they fall off?

5. I got two secured cards about two years ago and one has just been unsecured completely, the other, partially.  I pay them religiously and always more than minimum and have learned (very recently and thanks to you guys) that I should get my utilization down to 9%, which I'm doing as quickly as possible.  Is there anything else I can do with these accounts to help my score?

Thank you in advance for your time everyone.  I know this is a bear of a post, any help is greatly appreciated!

[Anonymous]

Bumping this even though it's new!

Welcome to the boards -- I am in almost the exact same situation as you are, other than not having any secured cards yet. Interested in hearing what folks here have to suggest...

[LIGHTNIN]

Hi and Welcome to the forums to both of you ! !

First off don't feel bad, I think I had about 15 neg's on my CR's,some here had more than that.

Congratulations to you,on starting to get your financial house in order.

Places to find the best info....stickys at the top of the boards,also google FCRA,FDCPA and the consumers laws of your state.

Answers to your questions...1) IME neg's hurt less and less as time goes on.

2)Paying a CA,doesn't start the 7yr clock over again.As per the FCRA, CA drop off your CR 7.5 yrs from the OC DOFD.

FICO scoring see a collection as a collection, it doesn't matter if it's $5 or $5k, paid or unpaid.

I would suggest to do a PFD,that way if it is on your CR any more, it will not be dinging your CS. 

3 &4) late payments hurt less and less as time goes on, the good thing is each one drops off your CR in 7yrs.

Some OC will grant GW's on lates some wont.

5) you got it..Get your  utilization down,I would suggest paying the CC's off at the end the month,instead of paying them the interest,that money you can be saving.

Let me tell you my story, maybe someone reading here can learn from my mistakes. I was paying more the the min pyts and thought I would be OK,even if my DH or I lost our jobs, but I was wrongThe unthinkable happened we both lost our jobs at the same time and to make matters worse, we had no emergency funds to cover the payments.So it took us 7 looong years to recover. I would suggest to pay off CC's at the end of the month and have an emergency fund in place to cover expenses incase of loss income.That way if you find yourself without an income, you don't have to worry about CC debt.

[Anonymous]

Wow, thank you!

So in the case of my collections, if I can get them to delete for payment, I should. If they won't, moral obligation aside, there's no benefit to me-- correct?

Thanks so much for your replies!