I am looking for ehlp with my child support issue. I Would like to see if someone has been in a simular situation and can tell me what I can exspect in the future.
So I have 2 child support records on my credit report. One account dates back 7 1/2 years & the other dates back 6 years. Both accounts are noted as being current, but that a small balance is still owed both accounts show less than $1000 combined.
My paychecks are currently being ganished to pay for both accounts. They are almost paid off & the Texas Attorney General is content on the payments being made every week as promised. I will have a 0 balance on both accounts within 6 months.
I have many payments marked 180 days late on both accounts. 1 of the accounts has been reporting OK for the past 13 months & the other has been reporting OK the past 4 months. I believe that these 2 accounts have been counted as open account lines with my average account age.
I read that the new FICO model does not consider paid collection accounts as a negative.
Im sure that the account status of being current is helping my score, but will I see a hike once the entire balance is shown as paid?
I have been steadily making payments on both accounts for the past 3 years - Every payment has been garnished directly from my check.
I know that a negative payment history will stay on my credit for 7 years & will become less damaging as time passes.
I have other credit problems such as too many inquires & too many new accounts.
After the child support starting reporting OK on both accounts I went out and opened 8 new store charge accounts & got 1 small personal loan for the purpose of building a positive credit history. ALL WITHIN THE LAST 3 MONTHS
Before then I only had the 2 child support accounts open for the past 7 years. I have never had a morgage & I always paid cash for my cars. I also had 2 collections on my reports that I am in the process of disputing.
My therory is that of course the inquiries & new accounts will lower my already damaged score, but that it would all recover in the same time. Maybe even faster. Perhaps the recent ontime payments on multiple accounts & the remaining on time payment being reporting from the child support would somehow work to my advantage.
I have applied for about 20 accounts & have about 20 inquires all over my reports.
I was approved for a Walmart store card $400 CL, Gap Store Card $400 CL, Victoria Secret Store Card $250 CL, Credit One Platinum Visa $300 CL, Overstock Store Card $450, Bealls Store Card $350 CL, J Crew Store Card $250 CL, Kohl's Store Card $300 CL & the personal loan for $200 set out in an instalment loan for 6 months.
I CURRENTLY AM HOLDING ALL THE NEW ACCOUNTS UNDER 10% UT.
DOES ANYONE HAVE SOME ADVISE OR TIPS TO HELP MY SITUATION?
MY CURRENT SCORES IS 647 TU, 627 EF, 630ish ON EX, My FICO is at 582
Congrats on getting to the end of the child support payments. That means your kids are growing up, that is something you can be proud of.
If the child support garnishment was reported as a public record item, then it would likely be one of the drags on your scores. Removing that after completing payment, all else being equal, would be a positive.
However the collections, if those remain, will work to continue to keep your score down. If you can find a way to get those removed, those will help get you closer to the better score you want. Basically, if any negatives remain on your report, until they are all gone it seems that the score is capped, is in a category that limits how high the score can go. When the last one comes off, people see a nice bump in score.
It sounds like you do not have any installment loan on your file? There are threads here about a share secured loan. At a credit union, you can set up a $500 savings account as collateral for a term loan (not a line of credit) with set payments each month, take out a loan for $500 with a 5 year term, that loan is secured by the savings account. You then have activity in a "term loan" category for very low cost, and no cash investment because you get the $500 back from the loan, to replace the $500 you put in the savings account. As that ages and the utilization goes down, it adds to your mix of credit items.
I would continue to use the accounts you opened. The INQ and new accounts effect is done, that will fade over the next 9 months. A year after the new account, you should see much less impact from that. The collections will still weigh, unless you get them removed. The INQ / New Accounts just need some time to fade.
Have you applied for a Capital One card? Perhaps not right away, but in a couple more months, that could be a good move to get you a good general spend card, then close the Credit One account (the Credit One account will charge you quite a few fees).Building your relationship with Capital One can lead to higher limits, and they are one of the better card companies for rebuilding.
Other than the Capital One, if you can avoid applying for new credit until 2018, that will allow those INQ to fade. Eventually this will all get better, because with credit, it is a marathon not a sprint. You can get there!
To give you a background, my DH had a similar situation with one case, when it first hit it was $42k back child support, he took a slight deep cause it looked like a maxed credti line since it reports the line as a $0 line with a balance, sort of like a closed card that still has a balance on it but hasn't been sent to collection. He recovered from that when the kid's mother, went back to court to advise them that he had been paying her out of pocker for real up until that point, so they removed the $42k balance and set it to $0, his points plus some went back up. He had a single late that hit it 2 years ago from going out of work on Workmens comp for a month. We had to make the payments ourselves which it posted late when we realized it was coming from his workmans comp checks.
Now those lates are the actual part that gets you, not the fact that the child support is reporting. You are right they are counted as open trade lines which is why the lates hit you so hard. Those have the normal timing of less of an affect after 2 years of straight on time payments and 7 years from the date of the first late, they'll start pushing off and not counting any longer. The accounts are probably reporting from the age of the kids, since they hit you with back child support, which is a good thing, they factor into your credit age and AAOA.
Right now all you have to rely on is keeping your payments on your child support and new accounts on time, staying down on your utilization and time. Those are your best friends right now until those lates on the child support age off. He has recovered from the low 600's to high 700s since that child support first reported that late, the best part for him is that it's only reporting on EQ and not any other bureau. Also check those scores, are you getting all three from Fico or other places? You had "MY CURRENT SCORES IS 647 TU, 627 EF, 630ish ON EX, My FICO is at 582." Your Fico's are from all three bureaus but you can have Vantage scores too (places like Credit Karma provides those on TU and EQ reports)
UPDATE ON MY CHILD SUPPORT SITUATION
SInce I opened so many new credit accounts I found that my theory was CORRECT!!!!!
Yes the average account age has taken a major dive.
My new average account age is about 6 months. WHICH I EXPECTED
I noticed the very 1first month that my LATE PAYMENT PERCENTAGE LOWERED 2% AFTER ONLY 3 OF THE NEW ACCOUNTS REPORTED THE FIRST PAYMENTS
My score did drop an amazing 116 points from all of the new accounts from 655 to 539 - BUT THAT'S OK
My score would have taken all 7 years to heal if I didnt start a lot of new credit.
In 6 months I should be in the 700 range.
MY ORIGINAL PROBLEM WAS 80 SOMETHING LATE PAYMENTS REPORTED 120 DAYS & ABSOLUTELY NO CREDIT.
I figure in the next 6 months with credit increases, low utilization & on time payment being reported monthly my score will shoot up very fast.
I really am greatful for the shopping cart trick, because thats how most of my new credit was obtained.
Also I have noticed that Comenity Bank has been the only ones to actually report my payments monthly as OK.
My first 2 cards were the Walmart Store Card & Gap Store Cards. They only report my usage, but not my payments. If they don't report my payments then it does NOT count to lower my late payment percentage. Hopefully they will report my past payments soon... I need as many as I can get.
I thought to list all the new accounts with Credit Limits **All of these accounts were opened in less than 3 months**
Walmart Store Card $400 CL
Gap Store Card $400 CL
Victoria Secret $250 CL
Credit One Platinum Visa $300 CL
Overstock Store Card $250 CL increased to $450 then again to $650
Beall's Store Card $350 CL
J Crew Store Card $250 CL
Kohls Store Card $300 CL
Ann Taylor Store Card $250
Also I took out that $200 personal loan from a finance company that report to CA for the purpose of gaining some kind of account mix. Its good for the next 6 months.
So every month I will be gaining 12 on time payments to lower the effects of the late payments, because the 2 child support accounts that were reporting late payments are now reporting on-time.
ALSO AT THE END OF THIS MONTH MY TOTAL DEBT FOR ALL ACCOUNTS INCLUDING CHILD SUPPORT WILL BE LESS THAN 10% OF MY AVAILABLE CREDIT. THAT'S A FIRST OF ME EVER!!!!
The only 2 cards I have been actually using has been my Walmart store card for gas & cash back rewards & my Credit One Visa, only because I can use it anywhere. I have even charged birthday gifts on the other new accounts and paid in full - just to show usage. The Bealls & Gap cards will come in handy when school shopping & I can make tiny online purchases for the other accounts & pay in full every month.
I followed the advice of another article & just charged a pair of sock on the J Crew card, so I will get to make a payment this month. I will do the same on the other accounts.
I can also leave less than $1 balance on some of the cards to get another bill.
It's gonna take a lot of planning - BUT IM VERY PRESISTENT
IF YOU HAVE ANY IDEAS PLEASE SHARE THEM - IM STILL LEARNING