topic Re: Rebuilding My Credit in Rebuilding Your Credit

Rebuilding My Credit

Anonymous — Mon, 13 Apr 2020 22:03:44 GMT

First post!
Trying to rebuild my credit after a divorce Feb. 2018. Current scores:

EX636

TU 632

EQ 628

2 derogatory:

Bank of Am DoFD 1/ 2017 charged off 7/2017 $21793 collections by National Enterprise System paying $175.00 mo.

Discover DoFD 12/2016 charged off 6/2017, $19425 hardship paying $135.00 mo.

In good standing with no late payments

mortgage loan balance of 252422 (2170mo.) Refinanced in my name only May 2018 as part of divorce

Car loan NMAC 32646 balance, paying 591 mo.

Capital One balance $7660 (8000 limit) min. Payment 201 (paying 250mo.)

Macys balance 958 (1800 limit) min. Payment $35 (paying $75 mo.)

Kohls balance 1001 ($3000 limit) min. Payment $31 (paying $50 mo.)

Sync/Ann Taylor 0 balance ($1250 limit)
Sync/JCP 0 balance ($500 limit)

I have 4000.00 saved and expect pay increase $400 beginning Sept. 1 which I will use to pay off Macys and Kohls by Dec 2020.
I want to settle with Discover ASAP but am not sure of what they might accept so ASAP could be in a year (I hope not!) Then, I want to save for a year after that and then settle with BofAm. Is this a good plan or should I pay off Cap. One befor trying to settle the collections? I appreciate any and all responses to help me rebuild!

Re: Rebuilding My Credit

Anonymous — Mon, 13 Apr 2020 22:46:55 GMT

@Anonymous wrote:
.... Is this a good plan or should I pay off Cap. One befor trying to settle the collections?

Hi, Lolly.

It looks like you've got a pretty good handle on what needs to be done. It's an uphill climb, for sure, but you are on your way.

I think paying Cap1 first would likely make sense because their cards tend to have high APRs, so you're probably paying 26% or so on that $7600, while it's likely your hardship payment plans froze, or lowered, any interest acruing. Is this correct?

Affect on your acores shouldn't matter significantly -- Utilization will count ALL revolving debt, even that which is charged off. And it doesn't sound like you're ready to be credit-seeking just yet so it makes more sense (to me) to focus on eliminating debt as #1 priority.

You also might want to ask for SP CLI on those retail cards. Every little bit of breathing room helps, and maybe by the time you are ready to seek credit again you have gotten multiple CLI & now your score gets a decent bump. Just a thought. Attack on multiple fronts simulataneously. Play short game & long game.

Best wishes.

Re: Rebuilding My Credit

Anonymous — Tue, 14 Apr 2020 03:17:35 GMT

Agree with the paying down of Cap1. The CO will begin to have less of an impact especially as you continue to make payments. What is the $400 raise? Is it weekly or monthly? Also, if you don't have a budget you should.

Re: Rebuilding My Credit

FireMedic1 — Tue, 14 Apr 2020 07:36:04 GMT

@Anonymous wrote:
First post!
Trying to rebuild my credit after a divorce Feb. 2018. Current scores:
EX636
TU 632
EQ 628
2 derogatory:
Bank of Am DoFD 1/ 2017 charged off 7/2017 $21793 collections by National Enterprise System paying $175.00 mo. So this will take 9 yrs to pay off.

Discover DoFD 12/2016 charged off 6/2017, $19425 hardship paying $135.00 mo. 11 yrs to payoff. A BK would fall off before you pay this off.

In good standing with no late payments
mortgage loan balance of 252422 (2170mo.) Refinanced in my name only May 2018 as part of divorce
Car loan NMAC 32646 balance, paying 591 mo.
Capital One balance $7660 (8000 limit) min. Payment 201 (paying 250mo.)
Macys balance 958 (1800 limit) min. Payment $35 (paying $75 mo.)
Kohls balance 1001 ($3000 limit) min. Payment $31 (paying $50 mo.)
Sync/Ann Taylor 0 balance ($1250 limit)
Sync/JCP 0 balance ($500 limit)

I have 4000.00 saved and expect pay increase $400 beginning Sept. 1 which I will use to pay off Macys and Kohls by Dec 2020.
I want to settle with Discover ASAP but am not sure of what they might accept so ASAP could be in a year (I hope not!) Then, I want to save for a year after that and then settle with BofAm. Is this a good plan or should I pay off Cap. One befor trying to settle the collections? I appreciate any and all responses to help me rebuild!

Just with the 2 accounts at 40,000 and 9-11 yrs to pay them off. Um. You could have a fresh start and hit the reset button. Taking a year to save and pay off 1900 on 2 cards? But still paying on 40,000. Not including the balances on the open cards. I'd say its time to shop around and find a good lawyer. In over your head.

Re: Rebuilding My Credit

Anonymous — Tue, 14 Apr 2020 11:43:54 GMT

Thank you James_A. You are right about the high APR so i'll attack that after eliminating the balances on the other two cards. Once I pay them down some, I'll request a CL increase. Kohls increased my CL $1000 without me asking in January.

Re: Rebuilding My Credit

Anonymous — Tue, 14 Apr 2020 11:50:20 GMT

Corpcrmgr,

The $400 will be monthly.
I do have a budget. I couldn't function without it!

I appreciate your input.

Re: Rebuilding My Credit

Anonymous — Tue, 14 Apr 2020 12:23:09 GMT

FireMedic 1,

Thank you for your response.

I considered BK back in 2018 but didn't think it would work for me. The budget left no room for emergencies. I have a 7 yo daughter (5 at the time), who would have suffered way too much. If I pay off my 3 balances first, (also using next years' tax return toward Cap1) I will be looking at settling with Discover around Oct. 2021 and 6 mo. Later with BoA. Chapter 13 BK is how long? (didn't qualify for 7)

Re: Rebuilding My Credit

donkort — Tue, 14 Apr 2020 14:10:45 GMT

BK 13 is usually 3-5 years, but impacts your credit for 7 years.

It could be said that you're sort of doing the "13" without the "bankruptcy."

Re: Rebuilding My Credit

Anonymous — Sun, 04 Apr 2021 19:51:14 GMT

What a difference a year makes! I sold some of my furniture and other belongings, cut cable and other spending for 10 months, and received stimulus dollars. I was able to settle with BOA in October and I just settled with Disco! I don't know if I will see a significant score increase when it updates but I feel good about both COs reporting 0 balances! Kohls is Down to 450, Capital 1 is 5600, and Macy's is 790. I added an Old Navy Visa in July (0/3500). I still have some work to do but, I feel like I can breathe again! I did just resign with cable (hgtv, TLC, and Hallmark I missed you).

Re: Rebuilding My Credit

OmarGB9 — Sun, 04 Apr 2021 21:32:19 GMT

Congrats on the settlements! Just be aware of the tax implications. You'll most likely be liable for paying taxes on the forgiven debt of your two settlements. This will affect your potential tax refund.

Re: Rebuilding My Credit

Anonymous — Sun, 04 Apr 2021 22:32:33 GMT

Thanks @OmarGB9. I was aware before I settled and this year itsignificantly decreased my return, as it will next year too. Well worth it though!

Re: Rebuilding My Credit

OmarGB9 — Sun, 04 Apr 2021 22:39:51 GMT

@Anonymous wrote:
Thanks @OmarGB9. I was aware before I settled and this year itsignificantly decreased my return, as it will next year too. Well worth it though!

👍 Just wanted to make sure you were aware. Great job once again.