Trying to Rebuild Credit

[Anonymous]

I am new to the FICO forums. I am attempting to rebuild my credit in order to purchase a home in the near future and would appreciate some advice in rebuilding my credit. 

OPEN Revolving Account - CAPITAL ONE

Balance = $157

CL = $200

(2) 30-days

(2) 60-days

CLOSED by Credit Grantor - Charged off Account - BOA

Balance = $4,774

CL = $0

Numerous 30/60/90/120/150/180 day lates since 2003

CLOSED by Credit Grantor - Charged off Account - BOA 

Balance = $3,056

CL = $0

Numerous 30/60/90/120/150/180 day lates since 2004

COLLECTION - Rental/Leasing

Balance  = $180

These are the only items listed on my credit report. I currently only have one account (Capital One) open. I now have the funds to completely pay off all accounts. I need advice on what method to use in order to get a pay for delete on the closed charge off accounts and collection. Should I send a GW letter for the closed BOA accounts? And send a DV letter for the collection? Any guidance would be appreciated. Thank you.

[stan_the_man]

For the open Capital One account, it is best if your reported utilization is 9% or less of your credit limit -- so a balance of $18 or less.

For the collection, you need to determine whether they are the original creditor or a collection agency. If they are the original creditor, then you would want to send a PFD (Pay For Delete) letter. If they are a Collection Agency, then a DV letter followed by PFD letter would be appropriate (though in some cases you can pursue having the OC recall the collection and PIF them).

Since the BOA charge offs are paid -- and I assume you have no open trade lines with them -- your only recourse is to start sending GW letters. Folks here have different suggestions to how often you should send GW letters, but I would send one at least once every 30 days until you either get a positive response or they tell you to stop contacting them.

Hope that helps.

[stan_the_man]

Shoot, I forgot.

For the open Capital One account I'd call up customer service and ask if they can remove the late payments. Hopefully, you've paid on time for the last couple months and you can point to that when you call up.

Otherwise, if that fails, you should send them GW letters as well. Make sure you include something about how their GW adjustment will increase your loyalty to Capital One.

[RobertEG]

Welcome to the forums!

A lot to cover, so little time!

First, GW deletions on an open accout are rare.  You have active debt with them, so deletion of their uppr hand is not usually something I would expect.

Second, I will address the two BOA accounts that are now reporting charge-off by the OC.

A CO is a serious derog.  You have not reported any collection account reporting after the two OC charge-offs, so I will assume that has not yet happened.

How to deal with these two COs is kinda involved, and depends a lot on whether the OC still owns the debt, and whether they have referred or sold the debt to a debt collector (CA).  If the OC sold the debt to a CA, then you can no longer offer to pay the OC.  So try to find that out.

If the OC still owns the debt, sure you can make a PFD offer to them, but they dont have to accept it.  They can just escalate their actrivities by referral of collection, or worse yet, bring legal action against you.  Making a PFD offer potentially offers great rewards IF they accept, but if they dont, may just leave the debt hanging, and spur them to collection referral or legal action.  PFD offers are not without peril.

Third, a PFD on the collection suffers the same perils.  If they bite, you are gold.  If they dont, you may face rising fees on the unpaid debt, and potential legal action.

You can always DV the CA. But that only forces them to cease active collection activities with you.  It does not force them to respond.  It may send a signal to them of unwillingness to pay, and if your SOL has not expired, to bring legal action.

Fourth, the open Cap1.  That account is currentlly at close to 80% util, which is MUCH to high.  And with prior derogs on the account, it might be periously close to OC closure.

I really cant weigh the potential of the creditors on your COs from escalating to collections, or the potential of fhe CA bringing legal action, or the potential of the open account with Cap1 to be closed by the creditor.  Which one to address first is really something that only you can evaluate.

I just offer some advice on the perils of each that may give you food for thought in your decisions.

I wish you luck in your decisions, and their ramifications!

[Anonymous]

Thank you stan_the_man and RobertEG. Your responses are greatly appreciated. I have fully paid the Capital One account. I will also call to see if they are willing to remove any lates.

I contacted BOA and was transferred to the "settlement department." I paid both BOA accounts to bring them current. However, when I asked about settling the accounts, I was informed that BOA could not discuss the settlement and given other numbers to contact. 

I pulled all 3 CBR's at the beginning of the month and all 3 still show BOA as owning my CO's with a balance. Is it correct to assume that a CA now owns both CO accounts and the CA is just not updated on my CBR's yet? And if so, where did the payments that I made to BOA go? Did BOA give the CA the payment? I am planning to call the numbers BOA gave me to discuss settlement this week. If the CA agrees to a PFD, how do I get BOA to delete the CO on my CBR? Any guidance on how to handle the CO's will be helpful. Thanks.