What to Takle First?

Anonymous · ‎01-18-2011

I am in the proccess of tryingto clean up a few thing on my credit report. I have been suscefful at removing one 30 day late and have another 60 day late I am in the proccess of getting removed. My questions are about my student loans and collections accounts. The reason I am looking to clean my record is I want to purchase a house in the near future and would like to bring my score up to around 700. Currently I am closer to 600. One sure fire way to increase it is removing the late payments and paying off my current credit. I will have my credit card paid off next month, giving me 0% credit utilization.

So on with the questions, I originally had a student loan with Wells Fargo many moons ago. It got transfered around quite a bit over the past 10 years. I was not always the modle loaner, as I had difficulty paying during certain years. I am back on top of things and ready to get my debt eliminated. The problem I am having is everytime my student loan changed hands, the new lender made a mark on my credit report. Right now my loan is with ACS and is in good standings. I need to find a way to remove the tradelines that are paid off/transfered as the late payments on those are killing me. Does nayone know if this is possible or how to go about it?

Also I have a few medical collections, and most of them will be dropping off by the middle of this year. Would it make for a better score to pay off all my collections or would it only make a slight improvement. All of my collections will fall off my account at the begining of next year, and most of them are under $300 with the exception of one around the $3000 mark.

I am not sure how the FICO score is rated, so not sure which to go after first.

Anonymous · ‎01-18-2011

Hi lucky!

Welcome to the forums - nice to have you here!

luckybob wrote:
I am in the proccess of tryingto clean up a few thing on my credit report. I have been suscefful at removing one 30 day late and have another 60 day late I am in the proccess of getting removed. My questions are about my student loans and collections accounts. The reason I am looking to clean my record is I want to purchase a house in the near future and would like to bring my score up to around 700. Currently I am closer to 600. One sure fire way to increase it is removing the late payments and paying off my current credit. I will have my credit card paid off next month, giving me 0% credit utilization.

So on with the questions, I originally had a student loan with Wells Fargo many moons ago. It got transfered around quite a bit over the past 10 years. I was not always the modle loaner, as I had difficulty paying during certain years. I am back on top of things and ready to get my debt eliminated. The problem I am having is everytime my student loan changed hands, the new lender made a mark on my credit report. Right now my loan is with ACS and is in good standings. I need to find a way to remove the tradelines that are paid off/transfered as the late payments on those are killing me. Does nayone know if this is possible or how to go about it? Be careful to never dispute accurate information on your reports. This can cause a lot of problems and headaches as you move forward. On the other hand, you can attempt GW with those accounts you would like to have remove late payments.

Also I have a few medical collections, and most of them will be dropping off by the middle of this year. Would it make for a better score to pay off all my collections or would it only make a slight improvement. All of my collections will fall off my account at the begining of next year, and most of them are under $300 with the exception of one around the $3000 mark. Paying off collections is the right thing to do - if you owe money, repaying it or making appropriate arrangements is always the right thing to do. However, paying off collections will not improve your FICO score - FICO scores you based on a collection reporting. Check out the information here - it will help you know what steps you can take to help as you rebuild your credit. For medical bills, google "HIPAA" which is a process that you can use after medical bill payment. I don't know if HIPAA is used on medical collections or not - someone with more experience will chime in on that, I'm sure.

I am not sure how the FICO score is rated, so not sure which to go after first. FICO's important, but it's not the be-all and end-all of the world. Always pay whatever debts you're able to - it's a matter of integrity. And while you're paying them, check the above link to learn how to pay them off in a way that will have the best FICO impact. For example, it's best to pay off collections because it's always right to pay money you owe folks - if you do a PFD, you will not only pay your creditor but also have an agreement to remove it from your credit report.
You'll get lots of helpful input from folks who have been through the process.

Anonymous · ‎01-18-2011

You are right, it always better to pay money you owe. I have issues with some of the medical collections. They occured during a time I had medical insurance and I am not sure why some of these collections are even on my report. The fact is if I contact the collectors to try and fix the issue it might make things worse at this point. The collections are scheduled to fall off within 4 months, so there is no use in waking a sleeping giant. On that note, I do plan on paying the collections that are more than a year from falling off with a Pay For Delete letter. They are all past the statue of limitations here in Texas, so I am not worried anout a judgement or anything like that.

According to what you stated the collections accounts don't directly effect my FICO? If that is the case I will make sure and direct most my attention to the on 60 day late item I have. The issue with it is it appears on 3 tradelines. Two of the tradelines was my student loan (broken into 2 accounts, but now they are consolidated), the other is the company that bought the loan. Well I had a 60 day late with the new guys because I was not aware my account got sold because it happened when I moved. As soon as I got it worked out I got my account up to date and current. I have not missed any other payments. I am trying goodwill letter to both lenders in hope that it is removed.

Outside of this, is there anything else I can do to improve my score? I don't use credit cards, but do have one I keep a balance of like $20 on. I have an old jewlery store card I had for like 7 years, but they went out of business so it is a closed account, but in good standing. I also have a car loan that doesn't have any missed payments and is current. Once I get rid of my 60 day on my student loan, I will have 4 positive tradelines, and like 4 collections.

Thanks for all the helpful input. So far I am happy about my choice to join myFICO.com and use the services.

MarineVietVet · ‎01-18-2011

@Anonymous wrote:
You are right, it always better to pay money you owe. I have issues with some of the medical collections. They occured during a time I had medical insurance and I am not sure why some of these collections are even on my report. The fact is if I contact the collectors to try and fix the issue it might make things worse at this point. The collections are scheduled to fall off within 4 months, so there is no use in waking a sleeping giant. On that note, I do plan on paying the collections that are more than a year from falling off with a Pay For Delete letter. They are all past the statue of limitations here in Texas, so I am not worried anout a judgement or anything like that.

According to what you stated the collections accounts don't directly effect my FICO? If that is the case I will make sure and direct most my attention to the on 60 day late item I have. The issue with it is it appears on 3 tradelines. Two of the tradelines was my student loan (broken into 2 accounts, but now they are consolidated), the other is the company that bought the loan. Well I had a 60 day late with the new guys because I was not aware my account got sold because it happened when I moved. As soon as I got it worked out I got my account up to date and current. I have not missed any other payments. I am trying goodwill letter to both lenders in hope that it is removed.

Outside of this, is there anything else I can do to improve my score? I don't use credit cards, but do have one I keep a balance of like $20 on. I have an old jewlery store card I had for like 7 years, but they went out of business so it is a closed account, but in good standing. I also have a car loan that doesn't have any missed payments and is current. Once I get rid of my 60 day on my student loan, I will have 4 positive tradelines, and like 4 collections.

Thanks for all the helpful input. So far I am happy about my choice to join myFICO.com and use the services.

Welcome to myFICO.

Collections definitely do affect your score because they considered a major derogatory. What beamMEup was saying is that the damage done to your score by collections is the same whether they are paid or unpaid.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Anonymous · ‎01-19-2011

What would be the order of importance to get removed/cleaned up to best increase my score?

1. Any past due accounts (30-Day, 60-Day, 120-Day, etc)

*One left, working on getting it removed.

2. Collections

*A lot will fall off/Pay for Delete

3. Credit utilization

*Will pay off my only credit card next month putting my utilization around 1-5%

This is my current plan anyway. If anyone has advice, I am willing to listen.

MarineVietVet · ‎01-19-2011

@Anonymous wrote:
What would be the order of importance to get removed/cleaned up to best increase my score?

1. Any past due accounts (30-Day, 60-Day, 120-Day, etc)
        *One left, working on getting it removed.
2. Collections
        *A lot will fall off/Pay for Delete
3. Credit utilization
         *Will pay off my only credit card next month putting my utilization around 1-5%

This is my current plan anyway. If anyone has advice, I am willing to listen.

IMO the fastest way to raise your score it to lower your overall and individual card utilization to <9%. That works unless you have one of the NPSL (No Preset Spending Limit) cards.

The collections are usually the most damaging but much depends on how old they are.

Late payments unless it's a major late like a 90,120,150, etc. seem to lose much of their impact after several years .

But all of these are generalities and everyone's situation is different.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Anonymous · ‎01-19-2011

I have one recent collection, and I am not sure what it is, but I am just going to pay it for a delete. The others are more than 6 years old, and will be falling off in the next 5 months. I will have my credit utilization under 5% next month.

My only concern is my student loan. It is now through Chase/ACS. It is sad, but it was with Suntech, but I guess Chase bought them out, then with Chase (which was current with no lates at all), then they moved it to ACS while I was moving and I missed a payment, but caught back up as soon as I realized what was going on. The bad thing is now I have 3 tradelines with a 60-Day (not sure why it was 60-Day as it was only a month after the due date that I paid in full to catch everything up). I spoke with ACS trying to get them to remove the 60-Day, and they said I would need to speak with the lender that owns the account, which is Chase (rolls eyes). I have sent a letter of Goodwill to Chase and plan on calling them after work today to see what can be done since it is only one time and I think I was kind of screwed by them shifting it from Chase to ACS which forced me to pay differently (before I would just autodraft out of my Chase checking account).

Once this all is done I will have close to a pristine credit report with no collections, no lates, no inqueries (none now), under 5% credit utilization, and a credit history of 8 years with 4 positive tradelines (2cc, 1 student loan, and 1 car loan).

Thanks for all the responses!