getting a loan to pay off collections

Anonymous · ‎04-14-2009

I am working on rebuilding my credit. I have a couple of collection accounts and a repo from 2.5 years ago. The one CA is reporting the collection each month so it keeps hitting me. The collection account is 5 years old. I have sent a DV letter to them since I don't believe I owe the amount they are stating. IF, big if, I do owe anything it is around 600 not 2500.

If the dv comes back as my debt I have half of the money to pay it off and do a PFD letter. My mother has offered to loan me the other or the full amount so I keep some in my savings. I was wondering though.. would it be smarter to ask her to cosign a loan with the bank for 1000 or 2000? I would like to buy a new car in the next 3-6 months. I could technically get a loan now for the car based on my score (I didn't apply but I did have a talk with a lender and they said that hypothetically I shouldn't have a problem.) Will getting a LOC for 2k now hurt my chances of applying for a car loan in July? I can pay off half of the loan by then at least and be able to still put money down for the car.

My Fico report lists my score as 633. Experian lists me as 600.

Anonymous · ‎04-14-2009

There are at least a couple of hits that you take when a new account opens: the inquiry and the new account. I don't think you can make up those points in 3-6 months.

Which FICO score are you talking about, EQ or TU? Also, just a reminder that the vast majority of lenders don't use EX scores sold on the EX site, and that EX FICO scores are no longer available for purchase by consumers.

Message Edited by jesslyn on 04-14-2009 04:07 PM

Anonymous · ‎04-14-2009

The EX score I got was on freecreditreport.com. It said FICO as reported by Experian.

So since this account is showing with a past due amount and reporting every month then I should pay it off.. and borrow the balance from my mother rather than get a LOC. This and one other account are the only accounts I have showing with a past due amount. I sent the other account a PTD letter already CMRRR. Waiting for them to say yes or no. Once I get this one I will have just paid collections, etc. and my current credit card which I am paying in full each month before the statement is sent out. It reports a last paid amount of xyz with a balance of -0- each month. I just got a credit increase on it this month... yeah!

Am I doing this stuff right? According to the simulators, once past due amounts are paid off.. supposedly I'll have a 650-690 score... I know they may not be accurate but I sure hope so! I have not been late on an account in 2 years (aside from these collections they are updating each month.

Is there anything else I should/could be doing to help increase my score?

Anonymous · ‎04-14-2009

The scores available through EX are considered FAKOs. As a consumer, you cannot buy the EX FICO score, though lenders still purchase it and use it.

Sounds like you are doing the right things. You can send GW letters on the paid accounts and CAs. Good luck!

Anonymous · ‎04-14-2009

moonlitnight wrote:
The EX score I got was on freecreditreport.com. It said FICO as reported by Experian.

Your score that you obtained stated it was a FICO score?

nothingman02 · ‎04-14-2009

It says 'PLUS' score on my freecreditreport.com EX report.

Anonymous · ‎04-14-2009

I'll have to look again.. I thought it said FICO.. Thanks for your help guys!