topic Re: Embarking on a mission to fix my credit in Rebuilding Your Credit

Embarking on a mission to fix my credit

Dj4Money — Fri, 10 Oct 2014 20:05:00 GMT

I have been a lurker on the forums for a few years now.

No reason to go into the gory details and I don't know what my score actually is, it's largely unimportant right now. Credit Karma reports 564 but I understand that's an estimate not an actual score. But with a repo in 2010 and two collection accounts with a previous credit score high of 615, it sounds about right. When I applied and was approved for my auto loan, my score was 615 in 2007 and resulted in 13% interest rate on a used '03 SRT-4.

Desires and focus has changed and with that change and a dormant credit file since 2010, it's time to right the ship so I can advance out of my current economic position.

In my reports I show two negatives besides the repo which I understand is not nearly as important as it was almost 4 years ago, I had 48 months of on-time payments until the bottom fell out from under me and I only owed $2703. Both of those negatives are collection accounts, totalling about $900. On the bright side however is that one of the collections is T-Mobile and I have already been contacted (several times...) by Midland. I have already agreed to 40% reduction in payment in return for a deletion. The other is typical of our broken health care system in this country, I have a $500 medical bill that I hope I can get a similar reduction on.

The plan is to get two secured cards. I recently applied for a Cap 1 secured and was rejected. I was wondering why and when I got the response letter I learned it wasn't about my score at all, it was the fact I have no checking or savings accounts currently open. I had some negative info in the Chexsystem but as I understand it, that last only five years, so I should be okay to open up accounts again.

My question is should I re-apply for the Cap 1 secured card prior to opening a new checking account? Or should I just send them a letter with my new account information?

The other card I plan on getting is the US State Dept CU Card.

So the plan is -

Step 1

1) Get first secured card this month (Oct '14) opening balance will be between $250-$300

2) Follow up on Cap 1 secured card

3) Start paying everyday purchases with the cards, save the cash to pay card(s) off on-time.

4) For the Midland pay to delete I it won't quite max out the card but I've read utilization has no memory, should be back to near zero by the end of Nov '14

5) Pay Medical Collection between Dec '14 and Jan '15.

At this point as soon as the medical is paid, I will sign up for MyFico and pull all three of my free reports just to make sure both have been removed.

Step 2

1) With all relevant negatives removed, I will then focus on getting my school loan back on-track. This is my oldest credit file (1989); I initially thought I should be aggressive and pay it off quickly. But after reading more of the forums and other sites, I found paying this off aggressively (balance is $3901) might result in my score doing down a bit.

I will figure out how aggressively I should pay it off, the min payment would take almost a decade to pay off, I rather not. I think 2-3 years would be aggressive enough.

I've read it will take 9 straight months of on-time payments to get back into good standing.

2) Monitor scores

Goals -

My goals are less about scores and more about what can be gained with good scores.

I would like a Chase Sapphire Card

I would like to Purchase a New Car by the end of 2015

Questions, Comments, Suggestions?

Re: Embarking on a mission to fix my credit

Anonymous — Fri, 10 Oct 2014 20:27:11 GMT

I would also recommend rehabbing your student loan. If they are in default then you can pay a set amt for 9-10 months. Then all of your neg info gets wiped clear and you get a fresh tradeline that would report all of the lates as current. That is if you have loans in default and have late payments.

Other than that you look like you are on your way!!

Re: Embarking on a mission to fix my credit

-NewGuy- — Fri, 10 Oct 2014 20:35:00 GMT

Be very clear about Midland. They are historically a royal pain to deal with. I especially caution you as you are saying that they will delete for a settlement and not PIF. My hats off to you if true, but I would make absolutely sure you are on the same page.

If you have two potential deletions coming up, it might be better to wait the two months until they're off before apping for a card again.

Re: Embarking on a mission to fix my credit

Dj4Money — Fri, 10 Oct 2014 21:09:21 GMT

Thanks, that is the plan to start paying on the student loan to get my payment history back in good standing and then be more aggressive and pay it off. The timing of which isn't determined yet. The min payment is $25 a month, the majority was paid down by a wage garnishment back in 2008-2009. The aggravating part is the majority of the $3901 is interest!

Re: Embarking on a mission to fix my credit

Anonymous — Fri, 10 Oct 2014 21:29:02 GMT

@Anonymous wrote:
I would also recommend rehabbing your student loan. If they are in default then you can pay a set amt for 9-10 months. Then all of your neg info gets wiped clear and you get a fresh tradeline that would report all of the lates as current. That is if you have loans in default and have late payments.

Other than that you look like you are on your way!!

Get your rehab in WRITING that they will remove it! I had 8 loans, rehab'd them and then consolidated. Guess what? 3.5 years later I'm still fighting with the creidt bureaus to remove them and Sallie Mae keeps stating they are accurate in saying they were payed through Govt Claim/Insurance (which is simply not true, and all docs have been provided that prove otherwise). I have 3.5 years for the baddies from these to stick unless I win my case. My next step is to file a formal complaint with the CFPB.

Get it in writing so you can furnish it to the creidt bureaus should they not update like mine or should the student loan service screw it around such as mine, and even then hope that the bureaus actually read the docs you send and don't just come back and say the service/ca/whoever validated it and as such they won't change it.

Otherwise welcome to the rebuilding process! I began mine right about a year ago at the end of this month. It's slow, it's painful and horrible, but worth it!

Re: Embarking on a mission to fix my credit

Dj4Money — Fri, 10 Oct 2014 21:39:20 GMT

@-NewGuy- wrote:
Be very clear about Midland. They are historically a royal pain to deal with. I especially caution you as you are saying that they will delete for a settlement and not PIF. My hats off to you if true, but I would make absolutely sure you are on the same page.

If you have two potential deletions coming up, it might be better to wait the two months until they're off before apping for a card again.

Great suggestion! The Cap 1 is appealing because of the low barrier to get into it. Max being $200, but with some credit history $50-$99 to get started isn't uncommon.

As far as I know it's clear about Midland, I will get it in writing to prevent any problems down the road. But I will say in muliple calls they have stated if I agreed to pay 40% of the owed balance (T-Mobile) they would completely delete it from all three reporting agencies. I understand the skepticism though as I have read the problems others have had with Midland on these forums.

With that in mind, I may keep increasing the balance of the first secured card. I need balance of $300 to keep monthly balances at 30%. But ideally I need a second card for my business, as I need to rent equipment and automobiles and need that balance free to use as a deposit.

So timing it, it looks like if I fund the first secured card this month and get it before the end of the month, I will pay Midland around that time. If it takes about 15-30 days for them to remove the collection then I should re-apply around Dec.

Re: Embarking on a mission to fix my credit

Dj4Money — Fri, 10 Oct 2014 22:05:00 GMT

@Anonymous wrote:
@Anonymous wrote:
I would also recommend rehabbing your student loan. If they are in default then you can pay a set amt for 9-10 months. Then all of your neg info gets wiped clear and you get a fresh tradeline that would report all of the lates as current. That is if you have loans in default and have late payments.

Other than that you look like you are on your way!!
Get your rehab in WRITING that they will remove it! I had 8 loans, rehab'd them and then consolidated. Guess what? 3.5 years later I'm still fighting with the creidt bureaus to remove them and Sallie Mae keeps stating they are accurate in saying they were payed through Govt Claim/Insurance (which is simply not true, and all docs have been provided that prove otherwise). I have 3.5 years for the baddies from these to stick unless I win my case. My next step is to file a formal complaint with the CFPB.

Get it in writing so you can furnish it to the credit bureaus should they not update like mine or should the student loan service screw it around such as mine, and even then hope that the bureaus actually read the docs you send and don't just come back and say the service/ca/whoever validated it and as such they won't change it.

Otherwise welcome to the rebuilding process! I began mine right about a year ago at the end of this month. It's slow, it's painful and horrible, but worth it!

I will get it in writing if need be. Who is handling your loans? Mine is being handled by Great Lakes and they have been easy to deal with. The loan was originally funded by Wells Fargo.

Yep my plan is in 3-6-12 month steps.

1) Fund secured cards, pay collection accounts to delete, start rehabbing my student loan, pull free reports in Jan '15 and get Fico for $19 at that time (Target Jan '15)

2) Obtain second secure card, continue positive payment history, pay remaining collection account (Target March '15)

From there it's up in the air. Originally I had planned to travel at the start of '15 but I figure if I want to take advantage of any travel miles going forward I need to get my credit straighten out soI can get some of the cards that will give me a ton of airline miles. But by the fall of '15 I should have more than enough to travel.

So the decision will be made, purchase a car to expand my line of credit or go on the trip. I can still purchase a car when I return, but I don't know which to do first, I guess I'll have a better idea when the time comes.

Re: Embarking on a mission to fix my credit

Dj4Money — Mon, 20 Oct 2014 03:35:29 GMT

I wanted to update this.

Midland called me on Saturday and offered me two terms, two payments to total $240 or one payment of $204. I tried to get them to confirm it would be a PFD. All I could get them to say is it would shown as paid on all three reports.

I am under the assumption this is not the same as PFD, so how do I make sure this is what happens and not just shown as "paid" or does it make any difference?

Re: Embarking on a mission to fix my credit

Anonymous — Mon, 20 Oct 2014 05:01:36 GMT

"The other card I plan on getting is the US State Dept CU Card."

In order to get the SDFCU card you must join first. Although they do not do a hard pull for membership application they do inquire ChexSystems. They will deny membership based on ChexSystems. You should 100% certain your ChexSystems is clean before applying for membership.

Re: Embarking on a mission to fix my credit

Dj4Money — Mon, 20 Oct 2014 07:49:10 GMT

I know you must join first. Not an issue two ways to join. If you don't work in the State Dept or related to somebody then you can join a non-profit (http://www.americanconsumercouncil.org) to get in that way. It cost $15 for lifetime membership, hardly breaks the bank.

I am positive my Checksys is clean but I just ordered a copy of it.

Re: Embarking on a mission to fix my credit

Dj4Money — Sat, 25 Oct 2014 03:45:08 GMT

I have posted this in one of the Midland threads but I thought I would repeat it here.

Midland will not offer PFD, only updated by saying paid and based on if I pay the partial amount or the full amount will be reflected in the memo section, wonderful.

So I am going to break out the bat with them to see if I get them to PFD since some on here reported they have been able to get this deleted by dispute, going back to the mobile carrier and paying them or constant pestering.

Beyond that, my plan has changed somewhat. The other two collections on my account, one paid and one not paid are scheduled to fall off my report July 2015 (reported last in 2008). With this in mind, I am contemplating not paying any of these collections unless it can be confirmed that having paid collections on your report is better than placed in collection.

If paid collections look as bad as unpaid, why pay at all? That's why I want to get Midland to delete, because by July of next year, no negative accounts will remain but my repo from 2009 and being behind on my school loan. I will start rehabbing my school loan before the end of the year, so by the time the collections fall off, it will be back in positive territory.

I will also have had my secure credit cards for over six months by then and things should be looking much better.

Re: Embarking on a mission to fix my credit

Dj4Money — Fri, 07 Nov 2014 07:24:54 GMT

Another update -

I opened a Logix Checking Account and apart of that was verifying my personal information. So they pulled my Experian Report. I was a bit shocked to learn my score was 630. I thought it would be much worse given the repo in 2009 and collections. I got curious, Credit Karma now gives you access to your TU report, so I decieded to have a look at my Equifax.

What I have found is some thing things are the same across all three. However the medical bill collection is only on my TU. Equifax has a $150 parking ticket. The paid AT&T bill (West Asset Management) is listed on all three, last reported in 2/2009 so that won't drop I guess until 2/2016.

I would like this removed if possible or should I even bother? The medical bill wil drop off 7/2015 soI won't touch that at all. That leaves the parking ticket and First Premier which takes a knock at my unsecured debt.

Just read however that somebody tried to get a PFD from First Premier and they wouldn't take it. That's not scheduled to fall off until 2019 since it was last updated/reported 9/2012.

So if Midland or First Premier won't PFD, I guess my only choice is to build tradelines larger than those?

So my scores, I don't have my Equifax, I'll just wait to see it when I add some trade lines with secured credit cards after the first of the year.

Here my two available scores -

Experian - 630

TransUnion - 564

Besides secured cards, what should be my next course of action?

Re: Embarking on a mission to fix my credit

Dj4Money — Mon, 10 Nov 2014 01:26:25 GMT

I signed up to the rest of the free services and while people say FAKO score don't count, they are in the neighborhood.

My current FAKO scores -

Credit Sesame (Experian) - 639 (Actual 630 as of 11/6 when opening checking account)
Quzzle (Equifax) - 548
Credit Karma - 564

After finding First Premier won't take a PFD, along with Midland. That leaves my paid AT&T (West Asset) (on all three) and Medical Bill only on my TU. The medical bill will fall off July 2015; West Asset hasn't reported since 2009, so another year before that drops.

Seems the plan of action now is to get my secured cards of course and start back repaying the school loan. I've hit a snag, I'll know more tomorrow but I will get a secured card bigger than my latest cc balance ($434) that was charged off, thinking $450-$500 should handle that. The other charge-off is the repo from 2009. Again nothing I should bother with.

I said I will update tomorrow.

Re: Embarking on a mission to fix my credit

Dj4Money — Tue, 18 Nov 2014 04:17:06 GMT

@Dj4Money wrote:
I signed up to the rest of the free services and while people say FAKO score don't count, they are in the neighborhood.

My current FAKO scores -

Credit Sesame (Experian) - 639 (Actual 630 as of 11/6 when opening checking account)
Quzzle (Equifax) - 548
Credit Karma - 564
After finding First Premier won't take a PFD, along with Midland. That leaves my paid AT&T (West Asset) (on all three) and Medical Bill only on my TU. The medical bill will fall off July 2015; West Asset hasn't reported since 2009, so another year before that drops.

Seems the plan of action now is to get my secured cards of course and start back repaying the school loan. I've hit a snag, I'll know more tomorrow but I will get a secured card bigger than my latest cc balance ($434) that was charged off, thinking $450-$500 should handle that. The other charge-off is the repo from 2009. Again nothing I should bother with.

I said I will update tomorrow.

Update -

Was approved for a Capital One secure card, $200 CL, $99 ($128 to cover the annual fee). Rep said I should get it in 10 days. I funded the card about an hour after approval.

SDFC willl get funded tomorrow to either $250-$275, I am not sure yet.

I will add to each in three months.

Also I logged onto CK and found my only medical collection from 2008 has been removed! That's about nine months early, I'll take it. Saves me from possibly paying a $500 to cover that. My CK TU score increased by 10 points to 574 from 564. We'll see what happens adding two trade lines to the report. I haven't check the others yet because as I said the medical collection was only on my TU and Eq (Quzzle) doesn't show an inquiry, which CK does.

Next collection won't fall until 2015 but maybe that will fall off early too, that's a paid collection.

Up next is to get my online presence started for my DJ business, that will take place soon (2-4 weeks).

I am excited to get my financial situation in good standing. Thank you again for the education, I have learned much and starting to help others on here and off-line.

Re: Embarking on a mission to fix my credit

Anonymous — Tue, 18 Nov 2014 17:05:49 GMT

@Dj4Money wrote:
I wanted to update this.

Midland called me on Saturday and offered me two terms, two payments to total $240 or one payment of $204. I tried to get them to confirm it would be a PFD. All I could get them to say is it would shown as paid on all three reports.

I am under the assumption this is not the same as PFD, so how do I make sure this is what happens and not just shown as "paid" or does it make any difference?

No, it is most assuredly NOT the same and it DOES make a huge difference. Midland is notorious for choosing their words carefully so it sounds like they are removing it when they are merely going to update it.

Firmly remind them that this is a T-mobile account which is currently being prosecuted by the FTC for cramming charges. Insist that you were one of the victims of this illegal practice and that is why the bill occurred in the first place. The ONLY reason you are willing to pay *anything* on it is to clear it from your credit history in a timely manner.

Re: Embarking on a mission to fix my credit

Dj4Money — Tue, 02 Dec 2014 02:07:41 GMT

My CU (Logix) updated my account so I can send money to my other CU account (SDFC) to fund my secured card which I was approved for before Thanksgiving.

I just received a email from Capital One informing me my credit card has been shipped.

I also applied for an auto loan from SDFC, I am tired of getting caught out at night waiting upwards of 50 mins for the bus. If approved, I am gunning for 110-125% finacing so I can keep the small amount of cash in my pocket and delay my payments by 90 days. I will pay the interest for those three months with my first payment, so the first payment will be a bit of a ballon payment.

Also having a car will give me a few more options including taking more DJ gigs which I am very limited now.

And so it begins, rebuilding my credit will be one of the most important things I have ever done. I recently read here that keeping 10% or less balance on all your cards at statement time is ideal; interesting.

For now I will have two cards. If I get approved for an auto loan, that will be my third CL.

The score SDFC pulled was 639 and EX responded by dropping my score to 635 via CS.

Re: Embarking on a mission to fix my credit

hawaii-girl — Tue, 02 Dec 2014 08:38:50 GMT

Yes, you should be prepared to take some hits to your scores as the inquiries and new tradelines post to your reports. These will climb back up as you maintain a good history. Unless you are actively applying for credit, you can let your utilization go up a little, maybe to around 30%. I wouldn't exceed that, however, since your new creditors will likely be pulling soft inquiries to see how you're doing. When you decide you want to app again, get the utilization back down beforehand. Sounds like you're serious, so good luck.

Re: Embarking on a mission to fix my credit

SunriseEarth — Tue, 02 Dec 2014 09:18:33 GMT

@Dj4Money wrote:
Another update -

I opened a Logix Checking Account and apart of that was verifying my personal information. So they pulled my Experian Report. I was a bit shocked to learn my score was 630. I thought it would be much worse given the repo in 2009 and collections. I got curious, Credit Karma now gives you access to your TU report, so I decieded to have a look at my Equifax.

What I have found is some thing things are the same across all three. However the medical bill collection is only on my TU. Equifax has a $150 parking ticket. The paid AT&T bill (West Asset Management) is listed on all three, last reported in 2/2009 so that won't drop I guess until 2/2016.

I would like this removed if possible or should I even bother? The medical bill wil drop off 7/2015 soI won't touch that at all. That leaves the parking ticket and First Premier which takes a knock at my unsecured debt.

Just read however that somebody tried to get a PFD from First Premier and they wouldn't take it. That's not scheduled to fall off until 2019 since it was last updated/reported 9/2012.

So if Midland or First Premier won't PFD, I guess my only choice is to build tradelines larger than those?

So my scores, I don't have my Equifax, I'll just wait to see it when I add some trade lines with secured credit cards after the first of the year.

Here my two available scores -

Experian - 630
TransUnion - 564

Besides secured cards, what should be my next course of action?

I

Concerning West Asset collection, what was the DOFD that led to the collection? It might be eligible for exclusion earlier than 2/2016. However, since it's paid, it's also a good candidate for GW removal. You might consider sending GW letters.

Re: Embarking on a mission to fix my credit

Dj4Money — Tue, 02 Dec 2014 10:39:15 GMT

@hawaii-girl wrote:
Yes, you should be prepared to take some hits to your scores as the inquiries and new tradelines post to your reports. These will climb back up as you maintain a good history. Unless you are actively applying for credit, you can let your utilization go up a little, maybe to around 30%. I wouldn't exceed that, however, since your new creditors will likely be pulling soft inquiries to see how you're doing. When you decide you want to app again, get the utilization back down beforehand. Sounds like you're serious, so good luck.

Very serious. I've been living cash and carry for the last four years after losing my job (fired) and my car being repo'ed under unusual circumstances. That four years has healed some of my credit as I was very surprised my EX score was far ahead of the others and only 10 points away from graduating from poor credit to average credit. I was informed about this when I first inquired about an auto loan from my CU (Logix). The loan rep told me that if I went from 630 to 640 on EX score, I would go from 8.99% for 60 months to 5.99% for the same length, saving $855 over the life of the loan.

I was aware my score would take a hit once IQ's and CL's started to show up.

I have stopped applying for credit for now. I doubt I will get any solicitations for unsecured cards until I have proved I can pay reliably and on-time with my secured cards. I don't need to go wild with them, all my expenses are covered for the most part, I only have to account for about $80 every month which I had been spending in cash anyway, that includes things like cat food, hair cuts and dj services. These are pretty much automatic. I will move the DJ services to one of the cards as soon as it gets here, that's $29.99 a month. The other card will likely get my payment for vision coverage since Medi-cal/Obamacare/Affordable Care Act only overs the exam and I need new glasses ASAP which means Lens Crafters.

VSP runs about $17 a month which will be more than the cost of glasses if I just paid for them. But I need new glasses, I need my cash and my credit can benefit from the recurring charge on it.

Depending what happens with the auto loan, I will put a recurring for the insurance on one of the cards next.

Hopefully I will get the CL increase some are getting from Captial One. I think as long as my UTI is down and I pay a bit of interest on small balances, along with my on-time payments this should be a slam dunk.

I have one thing to take care off in Dec, that might force both cards over 30% and likely will report over that into Feb, but I will make sure the balances on both cards are under 50%, I might be able to keep them to about 30%, but I'll know more soon.

Thanks for the encouragement, we all need some.

Re: Embarking on a mission to fix my credit

Dj4Money — Tue, 02 Dec 2014 10:37:43 GMT

@SunriseEarth wrote:
@Dj4Money wrote:
Another update -

I opened a Logix Checking Account and apart of that was verifying my personal information. So they pulled my Experian Report. I was a bit shocked to learn my score was 630. I thought it would be much worse given the repo in 2009 and collections. I got curious, Credit Karma now gives you access to your TU report, so I decieded to have a look at my Equifax.

What I have found is some thing things are the same across all three. However the medical bill collection is only on my TU. Equifax has a $150 parking ticket. The paid AT&T bill (West Asset Management) is listed on all three, last reported in 2/2009 so that won't drop I guess until 2/2016.

I would like this removed if possible or should I even bother? The medical bill wil drop off 7/2015 soI won't touch that at all. That leaves the parking ticket and First Premier which takes a knock at my unsecured debt.

Just read however that somebody tried to get a PFD from First Premier and they wouldn't take it. That's not scheduled to fall off until 2019 since it was last updated/reported 9/2012.

So if Midland or First Premier won't PFD, I guess my only choice is to build tradelines larger than those?

So my scores, I don't have my Equifax, I'll just wait to see it when I add some trade lines with secured credit cards after the first of the year.

Here my two available scores -

Experian - 630
TransUnion - 564

Besides secured cards, what should be my next course of action?

I
Concerning West Asset collection, what was the DOFD that led to the collection? It might be eligible for exclusion earlier than 2/2016. However, since it's paid, it's also a good candidate for GW removal. You might consider sending GW letters.

Last Reported in 2/14/2009 but first reported in 7/3/08. Your right, it might drop before July of 2015. A GW might speed that up, exactly how should that be worded and is there a template on the forums I could use?