topic Re: Rebuilding - Is there anything else I could be doing? in Rebuilding Your Credit

Rebuilding - Is there anything else I could be doing?

Anonymous — Mon, 04 May 2015 02:20:54 GMT

Greetings all... I've posted here before and apologize, I never replied to that thread. It's over 2 years old at this point, so I'll re iterate to spare any confusion.

In my younger days I made some terrible mistakes.

1. I took out student loans for amounts I can't even believe, then let them go to near default.

2. Charged off an AMEX Platinum for about $34,000 for which a judgment has been placed on me.

3. Voluntarily repo'ed a car....

4. Was evicted from an apartment.

Most of those things were 6-7 years ago. For example: The AMEX judgement will disappear from my credit report in November 2016. The eviction fell off earlier this year. The car repo isn't on my credit report, not exaclty sure why. And the student loans are in rehabilitation ( private loans ) and federal are in consolidation > sleep.

However, I have a few questions, maybe some concerns. I've worked quite hard to acquire some credit lines... the following:

1 - Applied Bank VISA, $1300 limit

2. Bank of America Visa (formerly Worldpoints), $500

3. A former Orchard Bank now CapitalOne Mastercard Rewards - $1500 limit (just upped from $500 this Feb)

4. Another CapitalOne MasterCard - $1500.00 limit (just upped from $500 this Feb)

5. Another CapitalOne MasterCard cashback $4250 limit (just upped from $2500 this Feb)

6. BestBuy, $1000 limit (store card, not the Visa) (Just upped in late March from $700)

7. Amazon/Synchrony - $700 limit (new as of 1 month)

8. Walmart/Synchrony - $500 (new as of 1 month)

9. Eddie Bauer/Comentiy - $500 (new as of today)

10. Arhaus/Comenty - $3500 (new as of today)

I'm also an authorized user on a Sam's Club card (not the Discover one), which has a $3500 limit.

Additionally, about a month ago, my credit union gave me an unsecured $500 dollar loan w/ 6 month terms and an excellent interest rate.

I've also done a few installment plans which report to the bureaus, namely through Okinus. Bought a mattress and financed it with them, it also showed up on my report.

My score is from 595 to 630, depending on the bureau you pull. In all, it's not too bad. However, I'm left with some questions...

Is it true American Express can infinitely renew their judgment? It's been almost 7 years (will leave report in November 2016) and they've let it be... but I'm concerned it will be renewed. I'm in Florida if it makes a difference. I keep reading conflicting information about it. They did serve me many years ago with the judgment, but I don't own property, they haven't tried to garnish wages, nor did I have to actually go to court. I'd like for it to just drop off, but I'm not sure that it will. And if it doesn't, I'm unsure how to actually deal with the situation. When I pulled my credit report a few weeks ago from 'the annual site', I noticed American Express and American Express 2 have been soft pulling my report 2-3 times per month. Which is very odd, in my opinion.

Also, that Bank of America card is my 2nd oldest account, the first being the Best Buy card. They've never approved a credit line increase, always citing my previous history with loans and such as the reason. That said, they've never had a late payment from me on the life of the account (circa 2006). In fact, none of my cards have ever had a late payment. It just boggles my mind CapOne is willing to issue a $4250 line when Bank of America won't even budge from $500. The interest rate on my BofA card is definitely better (nearly half the rate of teh CapOne card). Does anyone have any suggestions on pursuading them on a CLI? Or are BofA that stingy?

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Mon, 04 May 2015 02:27:23 GMT

Judgements can be renewed should the plantiff do it. They can last indefinitely if not paid.

BofA can be conservative, whereas Cap One isn't nearly as conservative - Cap One doesn't even really blacklist people even if they've burned them in the past (their blacklist is very temporary). BofA DOES warm up to people but they'll probably not warm until your reports are clean, even though anecdotal evidence supports that they sometimes do.

It's really quite funny how, even though everything is done with an impartial computer, some banks seem to like some people and dislike others.

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Mon, 04 May 2015 03:05:02 GMT

It is odd... I've also found it to be similar when applying for a job. Some systems do well, some, just don't like you. (Taelo.. cough cough)

As for the judgement, I'm really not sure what to do. I've had zero communication for over 6 years with Amex. They don't send letters or call, and I'm sure they have the ability to do that.

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Mon, 04 May 2015 18:03:24 GMT

They are likely pulling your reports regularly to ascertain when you may become "collectible". Any mortgage pulls, signifigant score recovery, and/or large credit lines appearing will likely trigger "hard" collection activities.

They are not "doing anything" with the judgement, because they consider you "uncollectible" at the current time.

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Tue, 05 May 2015 01:50:33 GMT

Well, with a TU of 595, I'm not sure they have many options.

I spoke with an attorney today, actually. I was curious about my options with the judgement. As I see it, I have three.

1. I can approach the creditor and ask for negotiation or if they will be open to payments on the account.

2. Chapter 7.

3. Ignore the judgement until they decide to wage garnish.

We decided option 1 is pretty unlikely. I've let this go for nearly 7 years and the amount + interest (amount of which I am unaware) is probably too high for them to consider cutting that balance down by much and let me make payments. I couldn't send them much really, private student loans and medical take most of my checks. :-/

Chapter 7, it's not a favorite option for me. And anyone feel free to offer input here... but, I've worked my tuchas off for the last 6 years with on time payments, responsible use of cards, and such, in an effort to build a reliable payment history, despite the judgement. A chapter 7 will undo all of that. If I'm not mistaken, if I have zero balances on my cards, I don't have to notify them of my proceedings, but they'll likely find out anywy with their monitoring services and can cancel the card/cut the limits. Anyone have any experience with this? I hate to sound cocky, but I detest the idea of cancelling/losing my accounts at this point in the process. I've worked quite hard and managed the debt very well considering my one mistake (i.e. the judgement). If I knew they'd still be available to me after the final process of a Chapter 7, I'd be more open to the idea.

And the final option, which is the one I'm leaning to - just allow them to garnish. I own no property, I don't own a car, there's not enough money in my bank account to seize (if they want the 5.00 they can have it). I ran my current pay grade through the wage garnishment formula and it came up just about 200 per check. Sure, it'll take nearly a decade of garnishment to erase the judgement, but it's easier to manage than me paying them $600-700/month now for 2-3 years.

Am I crazy? I guess what I'm trying to say is - now, I don't have a major debt problem on current accounts. My only past due thing is that judgement. Since it was placed, everything else has been well managed. Credit lines have <$100 on them, just periodic use and pay off. Nothing that I can't manage. It's just the judgement that's killing me.

Re: Rebuilding - Is there anything else I could be doing?

gdale6 — Tue, 05 May 2015 02:10:48 GMT

You would lose most if not all of your current cards with a BK filing.

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Tue, 05 May 2015 02:11:42 GMT

That's what I thought... so for now, just tet things be. If they garnish, at lease I keep my cards.

Re: Rebuilding - Is there anything else I could be doing?

Rebuilding69 — Tue, 05 May 2015 02:33:23 GMT

The judgement has already damaged you. Option 1 isnt an option if they think they can get their money in a reasonable amount of time, which is why they are pulling your reports so much.

Does wage garnishment reset the filing date of the judgement? Do they have to go before a judge to get it done? Or is it just admin paperwork at that point? I guess the filing date doesnt really matter too much at this point though, just kind of wondering for infos sake.

Would a company wage garnish for a decade+ on someone? And how does that affect your job? I'm assuming you are in the military or work for the government in some fashion.

If it doesnt affect your job & they would actually garnish for so long, I'd keep your credit cards & stay away from BK, personally. Establishing & Extending the positive side of your rebuilding is just as important as getting rid of old stuff on your reports.

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Tue, 05 May 2015 02:47:35 GMT

I''m not in the military, no. Just regular work.

As for how long they'd garnish before just letting go, I have no idea.

I asked our HR guy at work today and he didn't care, apparently I'm not the only one going through this... someone else has the Dept of Education garnishing. They won't fire me for it and it doesn't look bad on my performance. Everyone makes mistakes, they said.

Re: Rebuilding - Is there anything else I could be doing?

Rebuilding69 — Tue, 05 May 2015 03:01:18 GMT

Ah ok, I know my work hates garnishments.

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Tue, 05 May 2015 14:28:49 GMT

What I am about to write is probably not going to win me a popularity contest here. I want you to know that I mean no disrespect. Because I have been there. I am only sharing the HARD lesson I learned.

So this young person ( I am guessing early 30s), is following the mantra that more lines of credit will build his/her score up. And, to an extent it is. Score has gone from 595 to 630 afterall. And now, we have 10 lines of credit with a variety of sources that are allowing small lines. And, yes, in one case a $4200 line. (To some, not so small).

But what is the long term objective? My guess is that, like most of us, this person wants to see a day when he can borrow $500,000 for a house at the best available rate.

To do so, he will need a credit score of 740 or better.

It is my humble opinion, that, no matter how many small lines of credit he opens, that score will never be achieved until "old" debts are settled amd cleared. I can assure you, that skipping around an unpaid debt by "tricking" the system will leave a scar SOMEWHERE in this person's credit history. And, no bank that I know of, will lend a large ammount of money to someone who walked away from such an obligation.

If it were me, here is the course of action I would take:

Call the creditor (American Express) at once and look for a settlement ammount. (This is assuming that the total ammount cannot be paid over the next ten years.).
Upon reaching that ammount.....and he may not get one, because they might have charged the ammount off at which point this person will most likely see this debt "sold" to one institution after another. And....hey...guess what....EVERY TIME THE DEBT IS SOLD, IF IT IS DEFAULTED ON AGAIN, IT WILL SHOW UP AS ANOTHER WRITE OFF ON HIS CREDIT REPORT. Different credit collecting companies are simply going to try different ways to get the money. But...if Amex DOES agree to settle, then I would beg, borrow and steal from friends, family, banks....extra jobs...anything...to pay the settlement ammount. Because when that ammount is paid...THEN ...he might be on the way toward building his credit to formidable levels. ( And dont forget that if you do 'settle" you are obligated to pay tax on the ammount Amex "wrote off" on your next tax bill because the Fed Gov sees it as income.
Garnishment? Really? Ready to get your company and your boss involved in your credit problems. Not a good option.
$200 payments? Without interest, you are looking at 14 years to repay the ammount. And, at no time during that 14 years will you see that debt "fall off" of your credit report.
Chapter 7? Not the worst plan....but, on any application for a large ammount of money that question is going to be asked. And, no matter who is telling you diffrently, it will stay with you for the rest of your life.

What people always forget when dealing with "Credit Scores" is that, any bank can turn down a loan for any reason that makes them skiddish. After the "committees" review your report and all the options are weighed, one person is most likely going to have to eyeball you before a stamp of approval.

Story: years ago, I defaulted on a student loan with a bank. They wrote me off. My credit dropped to about 500...(or someting awful). I called them to get the loan rehabbed. it was about $22,000. The guy on the other end of the phone asked me why. Why would I want to actually pay the loan, now that all the harm that could be done to me was done. My answer was that "I borrowed the money and promised to pay you back....and I am going to pay you back." And I did. I paid them back. Every penney.

You can manipulate the 'system" all you want. You can open all those small lines of credit and watch your "score" trickle up two points at a time until the glass ceiling is hit. But the best course of action is to bust your butt to pay EVERY PENNEY OF THAT DEBT BACK. Because you promised you would. And when you do pay it back...THEN...you will see your score get to adult levels. Isn't it funny? All these sophisticated logirithms and, at the end of the day, your WORD counts the most...just like the Old West.

If I am reading your note right you are paying, like $100 per month to each of those ten creditors you are so happy to have. $100x10 is $1000 per month. At that rate, you can pay AMEX completely off in less than 3 years. ( when they "rehab" a loan, guess what?: no interest, just principle) Credit bureaus have respect for that. Banks have respect for that. YOU have respect for that. And, YOUR FISCAL SELF RESPECT is the most important thing we are talking about here.

My friend, you CANT WALK FIVE MILES INTO THE WOODS AND DECIDE YOU WANT TO GET OUT IN FIVE MINUTES. There is no 'quick fix' for this. FREEDOM HAS A PRICE.

By the way: My current "score" is 742. But I really don't care so much because if I cannot afford to pay cash for things i dont buy them. Want to see your score go up? Try that strategy for awhile. My wish for you is that you dont spend the rest of your life with all these 'corporate chains' latched onto you. My wish for you is fiscal freedom.

Re: Rebuilding - Is there anything else I could be doing?

Anonymous — Tue, 05 May 2015 14:44:06 GMT

Sorry, but you're not entirely correct.

Debts, even judgements, have a limited lifespan on someone's credit report. A judgement is max 20 years in Florida (assuming the creditor hasn't started garnishment; once that happens, you're stuck until it's paid for) With exception to student loans, pretty much everything "goes away" at some point. Take an eviction I had 7 years ago... it's not on my credit report anymore, and a bank wouldn't see it.

I'm in my late 20s by the way. As far as buying a house, I don't believe in owning a home. I like the freedom a leased flat affords, and the nature of my job allows me to move wherever I wish as long as I have internet.

As far as paying back the Amex debt, I'd love to pay it back. Unfortunately they won't let me make payments. Perhaps you missed that part. They want payment in full, or nothing at all (until they decide to garnish; if they do). I don't have $34k to give them, or even half the amount if they settled for 50%. I don't have 'family or friends' to borrow from either. Also, with nearly $90k in student loans (plus rent and some medical bills), I'm not left with a lot of money at the end of each pay period. Something has to give, somewhere. Unfortunately, it's been American Express for a number of years. Before that, it was student loans - to the point where they were all in default and garnishment was about to begin. After losing a tax return, twice, to the govenrment "I woke up" and was able to nip the problem in the bud. The unfortunate side effect was higher interst rates = higher monthly payments on federal and private loans.

As for what I'm paying my creditors now, just because I have x amount of credit cards with $x in credit lines, doesn't mean they all have a balance. They don't. Most of them are at $0. Please don't assume to know my financial situation with regard to what's coming in and what's going out and to whom.

Your situation with student loans is entirely different than my chargeoff / judgement. Student loans don't go away, they can't be discharged in a bankruptcy unless you're in a persistive vegetative state (essentially) and the government has no qualms about garnishing someone's returns or paychecks to get thier money.

Also, bankruptcy stays with you for 10 years. After that, like most everything else on a credit report, it falls off. Not sure why you'd think otherwise. Sure, the mental effects of it stay with you for life, but financially, no.