strategy to getting to a point where I can qualify for a mortgage

[toomin3]

Long time reader first time poster here! 

So anyway, I am on the path to rebuilding my credit. My goal is to be able to qualify for a mortgage in about two years, and I'm just hoping someone had a situation similar to mine and could maybe offer some unique insight.

So about three years ago  I took a hiatus from school to pursue some internships. Unbeknonst to me, my full-time student status disappeared and my loans went into default. It was around this time I also made some poor decisions and took out a few credit cards. Unfortunately for me, this was around the 2010/2011 depression and noone was hiring, so I couldn't make any payments on anything. Naturally, all my accounts from this time went to collection agencies. I wound up with 10 student loans in default and 4 credit cards in collections. My credit dipped down to about a 550 across the board. I didn't touch anything credit related for about two years after that point.

Fast forward to the middle of 2013 and I have graduated and got a decent paying job. I finally have enough money to make ends meet and it was around this time that i began to contemplate my long term plans for the future. I began to furiously read up on the subject of credit in the hopes of one day owning a home. It was at this point I began the credit repair process.

The first thing I did was call three of the four credit companies and work out settlements. I was questioning my choice to do this as I didn't want to inadvertenly reset the seven year fall off your credit report rule for baddies. However, I live in new york state, and I read that settled baddies fall off your credit report in five years here, as opposed to seven years everywhere else. My first question is abut the new york rule; will these three baddies fall off my report five years from the date of the first missed payment or five years from the date of me settling the account? 

The second thing I did was try to settle my home depot credit card that went into collections myself. I basically sent them a check with a conditional endorsement on it, saying essentially that "signing this and cashing this check means that you agree to delete the negative trade line off of my credit report". Well, they cashed the check, and didn't remove the baddie. I sent a dispute letter to the credit reporting agencies and it did nothing, the baddie is still on there. My second question is how I should proceed regarding this account?

My third question is regarding my federal student loans. When they defaulted they bounced around between a lot of companies, resulting in three tradelines a loan. Since that time, I enrolled in a sallie mae loan rehabilitation program, during which I make nine on-time payments of 30$, and they rehabilitate the loan. My question regarding this is for anyone who has gone through a similar process. Do they delete all the baddies off of your report and replace it with one good tradeline, or what? They said they would be removing some of the late charges also, if so which ones did they remove for you? Anything you can tell me about this process would be very helpful, I only have two payments remaining in order to complete this program

My fourth question is about my private student loans. Four of them defaulted, one of them got transferred to zwicker law firm? I spoke with him and reached an agreement to make basically eight payments to not sue me, and that at the end of that month we would talk again. My next question would be has anyone dealt with this law firm and has any advice? It is a 10,000 loan that went to them and the others, (all under 10k), I have not heard from in months. Any advice about what this means would be helpful and how I should proceed.

The final question I have for you guys is how I should handle my new accounts. About half a year ago, I opened up two capital one credit cards and got an amazone store credit card. After making all on-time payments and the work I detailed above, my credit score has risen to a 590/605/630 across the three CRAs. Just this past week I bit the bullet and sort of went app crazy, opening up 12 new credit accounts and getting around 20 inquiries added to my credit report in the hopes of being able to establish some positive tradelines going forward. All in all, I would like to know if getting a mortgage 2 years from now is a possibility, hopefully after all my settled accounts fall of my credit report in five years. If it's not, what steps should I take and also if my private student loans get paid off do they fall under the new york rule of falling off basically two years from now? Any advice would be appreciated! I am trying to make the corret choices now financially and would like to hear from an expert on how I'm progressing!

[toomin3]

bump

[Teardrop]

I have never heard of that five year rule that you are speaking of for New York residents.  I will say this that the law is all negative debt will fall of seven years from the first date of that first missed payment irregardless of whether you paid them off later.  Perhaps you are speaking on SOL for New York but even so those baddies will not faill off until the 7 year mark.

As for the check you sent to the creditor saying paying cashing this check you agree to delete; there is a more efficient way to do that.  Search on this forums for a Pay for Delete letter.  You may also want to search for Good Will letters as well.  These should be written to any creditors that you want to remove bad information off such as late payments etc after you have made efforts to restore your account.

I would suggest to stop with the credit apps until you got your current situation under control.  Hope this helps some.  Stay here on this forum and read up on many of the topics and I'm sure you will find steps you can take tailored to your unique situation to help you.

Good luck in your journey.

[Shogun]

Yes, there is a statute for NY residents that sets the CRTP for paid accounts at 5 years vs. the federally mandated one of 7 years.  The CRAs handle these a bit differently if I recall.  I think 2 of them remove them easily, but one of the CRAs drags their feet on the dates.  Sorry, but I just don't remember which right now.

Many states don't recognize "conditional endorsement" like you did on the check.  Not really much you can do about it.  Nice try though.

Who were the loans with before?  Were they with Sallie Mae then?  If so, after the rehab stage, they should removed the negative TLs.

Sorry, never dealt with that attorney.  But I would work with him and ask for a GW deletion once you've paid the debt.  That is if they are reporting to your CR.

That's a lot of credit to get at once.  But the damage is done and all you need to do is garden, garden, garden.  Watch those accounts like a hawk.  Keep doing what you're doing, cleaning your CR, getting those baddies paid and cleaned up if possible and in 2 years invite me to your housewarming party.

[triedtogetacardandcouldnt]

Not to be rude, but as someone who has dealt with collectors for years and eventually filed BK, I am not really understanding why you thought sending them a letter like that would make them delete the account from your CR. You have to get an agreement from them in writing first. They're not just going to delete it because you ask them to. You have to make payment conditional on them deleting it, and not pay them until you get something in writing stating that they will, so that in your case, you would have the agreement from them and be able to show they didn't hold up their agreement, and get the credit bureaus to delete it that way.

Anyway, I wish you the best in dealing with all this.

[toomin3]

Thanks for the reply, tried!

It actually wasn't a letter, it was a conditional endorsement on a check. You know how in order to cash a check you have to sign your name on the back? Basically, by signing that line to cash the check they had to agree to delete the baddie off my cr. Apparently, they are saying they never actually signed the check, but still cashed it somehow?

Yea in the future I am going to have to get everything in writing looks like.

[toomin3]

Thanks for the reply teardrop!

Here's the link for the forum on here where I got the info about the ny stuff... http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Paid-collections-and-charge-offs-NY-residents... TBCH I don't know why it isn't like this everywhere. It makes more sense to me to actually have an incentive to settle your old debts, rather then have it fall at the same time whether unpaid/paid

I think the next step for me is writing a pay for delete letter. 

I've actually gotten all the credit I need for the forseeable future so I'm done applying for credit for a long time.

[toomin3]

Thanks for the reply Shogun! 

I linked the ny stuff above for you guys in my reply above so you can see what I was talking about!

It is really annoying that they did not accept the conditional endorsement, but were still somehow able to cash the check without sigining it. So frustrating.

My private loans were originally with Direct Student loans I believe. 

I guess I will have to just keep working with him, asking him for a deletion is a really good idea though.

Yea, I kinda stole the garden idea from a few people on this forum. I knew I wasn't going to be able to start looking for a house for at least two years. That would give any inquiries time to fall off. Got every kind of credit I could conceivably need (home depot for house stuff, firestone to fix my car, etc.) and I just want to start building a positive history and getting more available credit. I'm hoping putting small charges on these cards and paying them all down to 1% every month will help boost my credit score over the next two years.

[kjel]

After rehabilitating the federal student loans, they may be picked up by another servicer or you might stay with Sallie Mae.  Sometimes this can take a couple of months so make sure that you are vigilant on what is happening to them and opening your statements. I rehabbed with CBE and my rehabbed loans went to Nelnet.

Now for the YMMV part in regards to the rehabbed loans and how everything reports post rehab. For me, the old TLs stayed on the CRs with all their negatives but I had two new TLs opened up by Nelnet with an open date that matched the original loans. The default notation on the TLs was removed. My rehab agency never made any promises about removing the negative TLs but that has happened to some folks on the forums.  Do visit the student loan forum on MyFico as there is a lot of good info there.

[Teardrop]

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@toomin3 wrote:

Thanks for the reply teardrop!

Here's the link for the forum on here where I got the info about the ny stuff... http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Paid-collections-and-charge-offs-NY-residents... TBCH I don't know why it isn't like this everywhere. It makes more sense to me to actually have an incentive to settle your old debts, rather then have it fall at the same time whether unpaid/paid

I think the next step for me is writing a pay for delete letter. 

I've actually gotten all the credit I need for the forseeable future so I'm done applying for credit for a long time.

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Oh wow toomin3 I stand corrected :-)  That's actually great news.  I tried to use SOL GA Laws to get and OC to just report the account as Closed but no dice they wouldn't bulge.  So now I gotta wait until Dec for them to fall completely off my file.

Thanks for sending me the link of explanation, hopefully I'll be able to use the information in the future to help someone.