topic Re: Credit Counseling. Please Help in Rebuilding Your Credit

Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 03:48:17 GMT

Hello everyone,

I could really use some help at the moment.

Some background first.

My wife and I are really trying to buy our first house and I have been working a ton of overtime to get our cards payed off. My loan officer said we should only use my credit report to get the house. My wife and I have 2 capital one cards (1 is mine and 1 I am an authorized user on, in December it. They both had a $1000 limit and they were both around $900 on each card.) I also have an orchard bank card with a $300 limit that had about $250 on it. The last card I had was a Targer red card with a $200 limit with $150 on it. I had my credit pulled and it was a 630. We will have to get a USDA loan.

Since then I have had my capital one card with the $1000 limit paid down to $366 and had the limit increased to $2000. The orchard bank card has been brought down to $46 and the Target card has $25 on it. The card I'm an authorized user on has been brought down to $766.

I was going to get my credit pulled again in February to see if my score was finally the 660 I needed to get the loan when I got hit with bad news.

I went to school in '06 for one term and found out I have a $1754 tuition bill that is still owed and is in collection. When my credit was pulled in December it wasn't on my credit report and when I called the collection agency they said that as of this moment it was not on my credit report. They also said I need to pay it off in full to make sure it doesn't get on my report.

So now my questions. 1. Is it better to pay the debt off with the what I have available on my credit cards or should I let it go on my report? I am not sure which would hurt my score worse. 2. I believe my statement date on the capital one card with the most money is on 1/27. Would that hurt my score if I maxxed the card out with the $2000 limit so much that I won't be able to get the loan on the 2/1?. 3. Should I believe this collection agency that if I pay them that it won't be on my credit report or should I deal directly with my school that I went to in '06?

I hope you guys can provide some insite for me and if you have any other suggestions for me if I missed something I would greatly appreciate it. I have worked a ton of overtime since November to get everything paid off and I will have another bigger paycheck on 2/15 to get more paid off. I am also expecting my income tax by the 15th as well. Please please help!

Re: Credit Counseling. Please Help

js0319 — Wed, 23 Jan 2013 03:54:48 GMT

The last thing you want to do is max out a credit card as you're trying to get a home loan.

Do you need to get the home loan on 2/1? If you have a refund and larger checks coming, it might be better to take care of the school loan and hold off on the home loan until everything else is situated.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 03:58:04 GMT

@js0319 wrote:
The last thing you want to do is max out a credit card as you're trying to get a home loan.

Do you need to get the home loan on 2/1? If you have a refund and larger checks coming, it might be better to take care of the school loan and hold off on the home loan until everything else is situated.

No I do not need to get it on 2/1. My rent lease is up on May 12th so I am just trying to get it as soon as possible.

I guess what I am worried about is the collection agency said that the collection isn't on my credit report yet but it can be any day. That's why I am wondering if I should max my credit card off to pay it off as soon as possible so it doesn't get on my credit report or wait until 2/15 until I can pay it with cash.

Thank you very much for the response.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 04:06:37 GMT

Pay it!!! Getting that collection on your credit report will get you denied and you will have to wait a year before you can qualify!

The added debt to your credit cards will also hurt your score but the minute it is paid back down, your score will go back up versus if you paid a collection on your credit report, your score wouldn't go up unless you got the collection deleted, which can be very difficult and time consuming to do.

The best path forward is to use your checking account funds to pay the tuition bill now. Second best path forward is to put it on your credit cards now if you don't have the funds right now to pay cash. Don't let it hit your credit report! Lenders don't want to see any new collections or late payments in the past 12 mo. Sometimes they will let one slide if your score is well above borderline. If it is not, they may deny you and make you wait until it is 12 months old or require you to pay it.

Before you go for preapproval, you will need to get your balances back down to the levels they are now, as the high balance will decrease your score but not nearly as bad as a new collection on your credit report will.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 04:09:33 GMT

@Anonymous wrote:
Pay it!!! Getting that collection on your credit report will get you denied and you will have to wait a year before you can qualify!

The added debt to your credit cards will also hurt your score but the minute it is paid back down, your score will go back up versus if you paid a collection on your credit report, your score wouldn't go up unless you got the collection deleted, which can be very difficult and time consuming to do.

The best path forward is to use your checking account funds to pay the tuition bill now. Second best path forward is to put it on your credit cards now if you don't have the funds right now to pay cash. Don't let it hit your credit report! Lenders don't want to see any new collections or late payments in the past 12 mo. Sometimes they will let one slide if your score is well above borderline. If it is not, they may deny you and make you wait until it is 12 months old or require you to pay it.

Before you go for preapproval, you will need to get your balances back down to the levels they are now, as the high balance will decrease your score but not nearly as bad as a new collection on your credit report will.

Thank you for the reply.

Now the question is should I believe the collection agency and believe her when she says that if I pay in full it won't go on my credit report or should I pay directly to my college that the original tuition is due?

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 04:12:15 GMT

Usually you have to pay the collection agency as the school sold the debt and probably purged it from their systems.

Re: Credit Counseling. Please Help

SnackTrader — Wed, 23 Jan 2013 04:18:13 GMT

Have you verified that you owe this money? How did the collectors bring this debt to your attention? Have you googled the collection agency or looked them up on the BBB?

I haven't gone through this situation before, and I'm sorry to hear that this is happening to you, but something just smells a little fishy.

Maybe my sense of smell is off - other opinions?

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 04:23:28 GMT

@SnackTrader wrote:
Have you verified that you owe this money? How did the collectors bring this debt to your attention? Have you googled the collection agency or looked them up on the BBB?

I haven't gone through this situation before, and I'm sorry to hear that this is happening to you, but something just smells a little fishy.

Maybe my sense of smell is off - other opinions?

The collection agency is Coast Professional Collection Agency. They said it was for a tuition when I went to college for a semester in '06.

They sent me a letter saying it was in collection so I gave them a call and that's where I got the details. Unfortunately the school was closed when I called so I will be calling them in the morning as soon as they open to get more information if I can.

Re: Credit Counseling. Please Help

ceemee2203 — Wed, 23 Jan 2013 04:25:56 GMT

@Anonymous wrote:
@Anonymous wrote:
Pay it!!! Getting that collection on your credit report will get you denied and you will have to wait a year before you can qualify!

The added debt to your credit cards will also hurt your score but the minute it is paid back down, your score will go back up versus if you paid a collection on your credit report, your score wouldn't go up unless you got the collection deleted, which can be very difficult and time consuming to do.

The best path forward is to use your checking account funds to pay the tuition bill now. Second best path forward is to put it on your credit cards now if you don't have the funds right now to pay cash. Don't let it hit your credit report! Lenders don't want to see any new collections or late payments in the past 12 mo. Sometimes they will let one slide if your score is well above borderline. If it is not, they may deny you and make you wait until it is 12 months old or require you to pay it.

Before you go for preapproval, you will need to get your balances back down to the levels they are now, as the high balance will decrease your score but not nearly as bad as a new collection on your credit report will.
Thank you for the reply.

Now the question is should I believe the collection agency and believe her when she says that if I pay in full it won't go on my credit report or should I pay directly to my college that the original tuition is due?

1) You can call the school and ask if you can pay them directly. If they say yes, good, get something in writing though. If they say no

2) Call the CA and tell them you will pay in full by a certain date as long as they agree to not report the CRAs about the debt. Get the agreement in writing before sending payment.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 04:31:06 GMT

1) You can call the school and ask if you can pay them directly. If they say yes, good, get something in writing though. If they say no

2) Call the CA and tell them you will pay in full by a certain date as long as they agree to not report the CRAs about the debt. Get the agreement in writing before sending payment.

That is a good idea.

When you say to get something in writing, I'm guessing that would be a letter that they would send to me through the mail? I am sorry if it is an obvious, commen sense answer but I am just freaking out and want to make sure I get everything done. My wife is already freaking out and I want to get her the best.

Re: Credit Counseling. Please Help

ceemee2203 — Wed, 23 Jan 2013 04:39:32 GMT

Yea. I'm not sure if a fax would be good enough, someone with more knowledge than me could answer that.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 16:06:14 GMT

I just called the collection agency (Coast Professional) and the lady said they don't have any letters that she can send that says if I pay the loan in full that it won't show on my credit report.

Then, she said that she can garuntee that if I pay today that it won't be on my credit report and that she can said me a paid in full letter.

Now I am afraid that if I pay in full it will show on my credit report as a collection paid in full.

I'd like to pay it have zero record of it on my report. Is this possible? What do you think my next steps should be?

Re: Credit Counseling. Please Help

bobvette — Wed, 23 Jan 2013 16:20:41 GMT

I would suggest two quick things to help you, one, go over to the "rebuilding credit" forum and research the threads there. You need to demand proof of debt, tell them you want debt validation, they are required to provide you written proof. The second thing I would do to help your score is to remove yourself as an AU on your wife's account. It is affecting your score to have a 77% util, you should see a little bump by doing that. I wouldn't pay anything until the provide proof of debt.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 16:50:35 GMT

The debt validation letter won't work because it has been more than 30 days since the ca received the account. I would pif ASAP and if you can get a written statement from them before doing so, you could be worry free.

Re: Credit Counseling. Please Help

bobvette — Wed, 23 Jan 2013 16:55:19 GMT

@Anonymous wrote:
The debt validation letter won't work because it has been more than 30 days since the ca received the account. I would pif ASAP and if you can get a written statement from them before doing so, you could be worry free.

I guess I didn't see where he said it had been more than 30 days, and isn't it 30 days from when he was notified, not the CA? If it was 30 days from when the CA was notified they would always wait to notify the consumer.

Re: Credit Counseling. Please Help

Walt_K — Wed, 23 Jan 2013 17:18:32 GMT

This is from 2006 you said. When in 2006? Have you checked your state's statute of limitations. Assuming you are outside your SOL, they can't sue you to collect on the debt. Of course, they can still report the collection, but depending on when the DOFD (date of first delinquency) is, it may not be there for very long. A collection can report for 7.5 years from the DOFD. So based on what you have said thus far, you're looking at a deletion sometime this year or possibly early next year depending on when this account went delinquent.

I realize that may mess with your timeline, but you shoudl probably try to figure that out before you decide whether you want to pay this. I agree that you should take this over to the rebuilding forum as you will get advice over there from people more experienced with these specific kinds of issues.

As for getting something in writing from them that they will not report, there's not much you can do to force them to do that. And I'm not surprised that they have stated they don't have anything they can send you. However, assuming you are outside of SOL, you do have some leverage because there is nothing they can do to force you to pay this. You might have better luck by sending them a letter outlining the terms of payment and asking them to send you a signed acknowledgment. Something simple stating that without acknowledging the validity of the debt, you will agree to settle the dispute for payment in full in exchange for an assurance that they have not and will not report the debt to any credit reporting agency, including but not limited to Equifax, Experian, and TransUnion. State that once they sign and return to you, you will deliver certified funds to them within ten days of receipt (or something similar).

This way they don't have to do anything but sign the document and return, which they are perhaps more likely to do than writing something up themselves. Query whether you want to affirmatively state that you are aware the SOL has run and that they cannot collect on the debt.

Of course there are risks in this because your activities may prompt them to report the collection. This is why you should get a better understanding of when the collection will fall off if it is reported so that you can better weigh your options.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 17:32:15 GMT

@Walt_K wrote:
This is from 2006 you said. When in 2006? Have you checked your state's statute of limitations. Assuming you are outside your SOL, they can't sue you to collect on the debt. Of course, they can still report the collection, but depending on when the DOFD (date of first delinquency) is, it may not be there for very long. A collection can report for 7.5 years from the DOFD. So based on what you have said thus far, you're looking at a deletion sometime this year or possibly early next year depending on when this account went delinquent.

I realize that may mess with your timeline, but you shoudl probably try to figure that out before you decide whether you want to pay this. I agree that you should take this over to the rebuilding forum as you will get advice over there from people more experienced with these specific kinds of issues.

As for getting something in writing from them that they will not report, there's not much you can do to force them to do that. And I'm not surprised that they have stated they don't have anything they can send you. However, assuming you are outside of SOL, you do have some leverage because there is nothing they can do to force you to pay this. You might have better luck by sending them a letter outlining the terms of payment and asking them to send you a signed acknowledgment. Something simple stating that without acknowledging the validity of the debt, you will agree to settle the dispute for payment in full in exchange for an assurance that they have not and will not report the debt to any credit reporting agency, including but not limited to Equifax, Experian, and TransUnion. State that once they sign and return to you, you will deliver certified funds to them within ten days of receipt (or something similar).

This way they don't have to do anything but sign the document and return, which they are perhaps more likely to do than writing something up themselves. Query whether you want to affirmatively state that you are aware the SOL has run and that they cannot collect on the debt.

Of course there are risks in this because your activities may prompt them to report the collection. This is why you should get a better understanding of when the collection will fall off if it is reported so that you can better weigh your options.

I am not sure when the DOFD is. The agent for coast professional keeps saying that it isn't on my credit report yet.

I did find the executive team's phone numbers and email address and sent them this letter. I am at work until 5 today so that is why I sent the email. Think I will have any luck with this?

Coast Professional, Inc.
[BLANK]

Re: Collection Account for Original Creditor Account #: XXXXXXXXX

Amount: $1,745.24

To Whom It May Concern:

This letter is to inform you that the validity of this debt is disputed. I am not sure of the account number, as I have never heard from you regarding this account. The account number I have is the one listed on the letter that you have sent me.

In the spirit of compromise, I am willing to pay this account IN FULL (or settlement percentage) if you agree to immediate deletion of this account from any and all credit reporting agencies (Equifax, Experian and TransUnion). The purpose of this settlement is merely to have this item removed from my credit files. It is not to be construed as an acknowledgment of liability for this debt in any form.

If you agree to the terms and accept this agreement, certified funds for the settlement amount of twenty-five dollars ($1,745.24) will be sent to Coast Professional in exchange for full deletion of ALL references regarding this account from my credit files and full satisfaction of the debt. As certified funds will be used for payment, there shall be no waiting period regarding the deletion of this account from the credit reporting agencies.

Coast Professional agrees to delete ALL information regarding this account from the credit reporting agencies WITHIN TEN CALENDAR (10) DAYS following receipt of payment as specified above and will not discuss the terms of this settlement with anyone, excluding your client on this account. If contacted by any third party, including credit-reporting agencies, Coast Professional will not acknowledge that any settlement offer was made, accepted or executed and will, in fact, deny knowledge of any such account.

If you agree to the above terms, please prepare a letter on your company letterhead explicity agreeing to the same terms as the above settlement offer and have it signed by an authorized representative of Coast Professional. It will be implied that this letter shall constitute a legally binding contract, enforceable under the laws of my state.

Your response must be postmarked no later than 15 days from your receipt of this settlement offer or this offer will be withdrawn and I will request full validation of this alleged debt, as provided for by the Fair Debt Collection Practices Act.

Please address all correspondence regarding this account to:

[BLANK]

My Email Address is [BLANK] and my phone number is [BLANK].

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 17:36:50 GMT

Pay the school bill! Collection will look worse and drag score down more than Utilization

Re: Credit Counseling. Please Help

Walt_K — Wed, 23 Jan 2013 17:51:43 GMT

@Anonymous wrote:
Pay the school bill! Collection will look worse and drag score down more than Utilization

Once paid, it can still be reported. And then the CA has very little incentive to delete as they already have their money. That is why OP is trying to get something in writing stating it will be deleted or not reported in the first instance.

OP, I think the letter is a little aggressive, but accomplishes its purpose. What's done is done. No way to predict what will happen. You'll just have to wait and see how they respond. Best of luck.

Re: Credit Counseling. Please Help

Anonymous — Wed, 23 Jan 2013 19:16:45 GMT

Hi, all!

This is an interesting discussion, but I'm going to move it over to the Rebuilding forum, as the thread has turned in a direction suitable to that particular forum and I think that there are a bunch of folks over there that will be able to add valuable insights.