WTF????

[Anonymous]

I'm currently in the process of rebuilding my credit after several years of being irresponsible and unaware of the importance of having and maintaining good credit.  Now, at the age of 30, I've become very credit conscious.

I've recently opened (July. 08) a BOA secured card account and a secured installment loan for $5000 from my bank which immediately boosted my scores from the low 500's to the high 600's (Sept. 08) and I should be knocking on the door of the 700 club very soon! However, I still find getting approved for a unsecured card is like pulling teeth for me.

I have 5 charge offs, all 3 or more years old. This leads me to think that no matter how high your credit scores are, if you have a lot of charge offs/late payments, forget about getting a unsecured card while this is on your report. The only thing that I was aprroved for is a Orchard Bank Gold Mastercard with a AF of $79, $19 app. fee, and a 200 CL!!!....Are they serious???

Why is it when you default on your payments they immediately slam it to your report but when you try to rebuild your credit with positive things its a long, drawn out process???

I'm done with applying for credit cards!  I'm going back to CASH ONLY until my credit is free of charge offs!!!!!!

[Anonymous]

Are your collections PAID or UNPAID?

I ask because I really think that while FICO scores a collection as a collection as a collection -- regardless of whether it's paid or not, I REALLY think that the CCCs see the payment status and approve or disapprove on that basis.

DH had one unpaid and one paid collection on his CRs (non-medical) and he couldn't get a frickin' thing. Once we paid the one unpaid collection (and it was updated), he was getting approved. Nothing else had changed.

I dunno ... I really think that the CCCs have some sort of algorithm that "sees" unpaid collections.

[cobra19]

Charge-off's are bad. They reflect poorly on a person. There's no way to sugar coat that. I think that, at one time or another, we've all had them. I know I have. And we learn from our mistakes.

Go visit your local credit union and explain to them your past indiscretions. CU's are, for the most part, much more willing to work with you than is a bank. Especially in these times, when even good clients are seeing their credit lines being decreased.

While rebuilding, address your CO's. Contact the OC's and see if they are open to some kind of settlement in exchange for having the account deleted. I know, it's a hassle and it's easier to just throw your hands up and walk away. Fact is. however, we all need credit from time to time. Don't just walk away.

Post some of your CO's here with more details. Lots of folks are happy to offer their suggestions based on their past experiences.  

[Anonymous]

2 out of 5 are PIF...However, it didn't seem to help score wise or approval rate either....I'm beginning to think a collection is a collection no matter if its paid or unpaid its still there bright as day showing on your report....This may or may not be true, I'm just sick and tired of trying to figure out this credit stuff and how it works.....Only the "insiders" that work for the government and the big CCCs know the real facts and secrets!.....So at this point I'm like WHATEVER!...LOL

[Anonymous]

A charge off is a charge off whether paid or not.  FICO does not care as I have found out the hard way.  Once a charge off hits your CR, there is not much of an incentive to pay it other than your own personal values.

However, Mortgage companies are not likely to give you a loan with unpaid charge offs or collections.  I suspect the CCCs are the same.

Chris

[Anonymous]

Tell me bout it!.....You're right, a charge off is a charge off!  If I would've known this back then I would've kept my 4 grand in my pocket because I didn't see any justice when I paid the ones I paid, thats why I was like the heck with the other 3, I'll just wait til they drop off in about 4 more years!..LOL....Oh well, cash is king nowadays anyway.  You can't build a positive credit history without cash to pay your existing bills, thats how I see it!

[Anonymous]

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@Anonymous wrote:

2 out of 5 are PIF...However, it didn't seem to help score wise or approval rate either.... 

Of course not. You still have 3 that are unpaid. Any positive
effect the 2 paid collections are going to have on a potential creditor
is mitigated by the 3 that aren't paid.

Making a mistake
is human (just as Cobra said), but fixing them is divine. If you'd gone
back and paid them ALL (sucks, really ... and I do know that), then a
potential creditor would say "Well, gee ... TS0083 defaulted on these
bills, BUT he DID go back and then pay them off later ... maybe it was
a serious life event and he's not like that otherwise ... maybe we
ought to give him a chance."  

Having them ALL paid off,
too, I think, helps them see that you're financially ABLE to take care
of your finances. They might think that if you have the $$ to pay off
these old debts, you have the $$ to pay THEM when the bill comes due.

I'm beginning to think a collection is a collection no matter if its paid or unpaid its still there bright as day showing on your report....This may or may not be true, I'm just sick and tired of trying to figure out this credit stuff and how it works.....Only the "insiders" that work for the government and the big CCCs know the real facts and secrets!

Not hardly. Fused, Hauling, Timothy, Ilecs, Happy Days, etc ... all know the "secrets" -- otherwise how in the world could they give advice???!!! And BTW, they give **bleep** good advice. 

.....So at this point I'm like WHATEVER!...LOL

Well, then. You've given up.

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[Anonymous]

The bottom line:

Yes, according to FICO scoring, paid and unpaid count just as badly against you.  I think it's unfair (and inaccurate), but that's how the game is played.  So there's no incentive, FICO-score wise, to pay an old collection or charge-off.

As a corollary to that, only your most recent collection or charge-off really matters to the scoring formula.  If you have three COs on your credit report, from 12/07, 3/06 and 6/04, respectively, getting the one from 2004 removed will have virtually no effect on your score.  You might get a few points for hitting the 2006 CO...but only a few.  The only way to get real benefit, however, is to do something about the 2007 CO.  That would likely get you a good 25 points or so, and put more distance between yourself and your last baddie.

However, your FICO score is not the sole determining factor in whether or not a creditor approves you for a loan or card.  I have seen quite a bit of anecdotal evidence that suggests that paying off all your past collections and charge-offs does actually improve your chances of being approved for loans and credit cards...even if FICO gives you no love.