topic Re: Taking a different approach in Rebuilding Your Credit

Taking a different approach

hpertrain — Thu, 06 Jan 2022 21:43:51 GMT

I realize this may not be the best plan of action but unfortunately I'm having to work with the hand I was dealt

My wife and I were laid offdue to Covid but bouncing back. Our CC's and personal loans have all fell well behind

with some now going to charge off status. Unfortunately it came down to food on the table and gas in the car

as oppossed to being able to make the payments. Fortunately things are getting better and slowly climbing back

up hill. Therefore now employed again I am saving up as much as I can over the next few months and my plan is

to be able to pay off these debts at reduced amounts. I know I am responsible for them and they will remain for 7

years and I understand our obligation. The CA's are starting to call but I am resolved in getting this done. If my balance

is say $5K then hopefully I can pay off a reduced amount for say $1-2 or less.

Hopefully as I pay these off over the next 12-18 months my credit will at least start to improve as I have at least paid them

off, albeit at a reduced amount.

I can't think of any other way I can do this. Any suggestions?

Re: Taking a different approach

jrwa81 — Fri, 07 Jan 2022 00:01:39 GMT

A majority of CA's will agree to settle for 30% of the original balance, so I would start with the smallest collections (AKA the low hanging fruit) first that are going to be the easiest to knock out. Contact the CA's and ask if they will agree to settle at 30% and do PFD (pay for delete). A lot of them will be very willing to do this (we did this with many of my husband's collections). If you have larger collections that you want to settle, but need some additional time to pay them off, a lot of CA's will allow you to set up a payment arrangement with the agreement that they will delete the collection once paid in full. Just make sure to get any agreements with any CA in writing before paying anything! This is why I used email when contacting our CA's so that I would have a paper trail in case they didn't hold up their end of the deal after we paid. Obviously, once the collections are paid and start falling off, your scores will start to rebound. I would also work on rebuilding while you are simultaneously repairing with either a couple of secured cards and/or a self lender loan. Those worked wonders for my husband and I when we were going through the repair and rebuild journey. Good luck! You've got this!

Re: Taking a different approach

hpertrain — Thu, 06 Jan 2022 22:57:41 GMT

@jrwa81 wrote:
A majority of CA's will agree to settle for 30% of the original balance, so I would start with the smallest collections (AKA the low hanging fruit) first that are going to be the easiest to knock out. Contact the CA's and ask they will agree to settle at 30% and do PFD (pay for delete). A lot of them will be very willing to do this (we did this with many of my husband's collections). If you have larger collections that you want to settle, but need some time to pay them off, a lot of CA's will allow you to set up a payment arrangement with the agreement that they will delete the collection once paid in full. Just make sure to get any agreements with any CA in writing before paying anything! This is why I used email when contacting our CA's so that I would have a paper trail in case they didn't hold up their end of the deal after we paid. Obviously, once the collections are paid and start falling off, your scores will start to rebound. I would also work on rebuilding while you are simultaneously repairing with either a couple of secured cards and/or a self lender loan. Those worked wonders for my husband and I when we were going through the repair and rebuild journey. Good luck! You've got this!

Thank you so much for the response and excellent advice! I will follow that path and do you as

advise.

We do have a couple off CC's that we use for a small amou and pay off in order to keep a good

payment history.

Thanks so much!!

Re: Taking a different approach

jrwa81 — Thu, 06 Jan 2022 23:15:06 GMT

@hpertrain wrote:
@jrwa81 wrote:
A majority of CA's will agree to settle for 30% of the original balance, so I would start with the smallest collections (AKA the low hanging fruit) first that are going to be the easiest to knock out. Contact the CA's and ask they will agree to settle at 30% and do PFD (pay for delete). A lot of them will be very willing to do this (we did this with many of my husband's collections). If you have larger collections that you want to settle, but need some time to pay them off, a lot of CA's will allow you to set up a payment arrangement with the agreement that they will delete the collection once paid in full. Just make sure to get any agreements with any CA in writing before paying anything! This is why I used email when contacting our CA's so that I would have a paper trail in case they didn't hold up their end of the deal after we paid. Obviously, once the collections are paid and start falling off, your scores will start to rebound. I would also work on rebuilding while you are simultaneously repairing with either a couple of secured cards and/or a self lender loan. Those worked wonders for my husband and I when we were going through the repair and rebuild journey. Good luck! You've got this!
Thank you so much for the response and excellent advice! I will follow that path and do you as
advise.
We do have a couple off CC's that we use for a small amou and pay off in order to keep a good
payment history.
Thanks so much!!

Absolutely! We've been there, so I know how daunting and overwhelming it can seem, but it can definitely be done! I strongly recommend Self Lender. You can open an account with them for a $9 fee and pay either $25 per month on their 24-month loan or $45 per month for their 12-month loan (we always did 24 months since it builds a longer payment history). They report to all 3 bureaus as an installment loan, which is not only great for building a positive payment history, but it also adds to your credit mix, so that can give you a few bonus points as well. Then, once you have made your first 3 (I think) payments on your loan, they will give you a Self Lender Visa credit card. After you've paid all of the installments on the loan, you get all of that money you paid into it back plus interest. They will either mail you a check our deposit it into your bank account. Both my husband and I have used Self twice and they really helped our scores! We also are currently doing Kikoff credit builder, which is another credit building account and is only $12/month for 12 months and no money required to sign up. They report to Experian and Equifax as a credit card account with a $500 limit. Here are the links to those two companies!

Kikoff: https://kikoff.com

Self: https://www.self.inc/

Re: Taking a different approach

sccredit — Thu, 06 Jan 2022 23:07:18 GMT

I don't have anything to add as @jrwa81 covered it pretty well. You did what you had to do to survive and now you can start appraching the rebuild. Best of luck and keep us updated!

Re: Taking a different approach

hpertrain — Thu, 06 Jan 2022 23:12:47 GMT

@jrwa81 wrote:
@hpertrain wrote:
@jrwa81 wrote:
A majority of CA's will agree to settle for 30% of the original balance, so I would start with the smallest collections (AKA the low hanging fruit) first that are going to be the easiest to knock out. Contact the CA's and ask they will agree to settle at 30% and do PFD (pay for delete). A lot of them will be very willing to do this (we did this with many of my husband's collections). If you have larger collections that you want to settle, but need some time to pay them off, a lot of CA's will allow you to set up a payment arrangement with the agreement that they will delete the collection once paid in full. Just make sure to get any agreements with any CA in writing before paying anything! This is why I used email when contacting our CA's so that I would have a paper trail in case they didn't hold up their end of the deal after we paid. Obviously, once the collections are paid and start falling off, your scores will start to rebound. I would also work on rebuilding while you are simultaneously repairing with either a couple of secured cards and/or a self lender loan. Those worked wonders for my husband and I when we were going through the repair and rebuild journey. Good luck! You've got this!
Thank you so much for the response and excellent advice! I will follow that path and do you as
advise.
We do have a couple off CC's that we use for a small amou and pay off in order to keep a good
payment history.
Thanks so much!!
Absolutely! We've been there, so I know how daunting and overwhelming it can seem, but it can definitely be done! I strongly recommend Self Lender. You can open an account with them for a $9 fee and pay either $25 per month on their 24-month loan or $45 per month for their 12-month loan (we always did 24 months since it builds a longer payment history). They report to all 3 bureaus as an installment loan, which is not only great for building a positive payment history, but it also adds to your credit mix, so that can give you a few bonus points as well. Then, once you have made your first 3 (I think) payments on your loan, they will give you a Self Lender Visa credit card. After you've paid all of the installments on the loan, you get all of that money you paid into it back plus interest. They will either mail you a check our deposit it into your bank account. Both my husband and I have used Self twice and they really helped our scores! We also are currently doing Kikoff credit builder, which is another credit building account and is only $12/month for 12 months and no money required to sign up. They report to Experian and Transunion as a credit card account with a $500 limit. Here are the links to those two companies!

Kikoff: https://kikoff.com
Self: https://www.self.inc/

Awesome!!

Re: Taking a different approach

OmarGB9 — Fri, 07 Jan 2022 02:52:04 GMT

I would just add that while @jrwa81's advice is very good, I disagree that "most CAs will settle for 30%." I don't know that most would do that, especially with the charge offs being so recent. I say this only to help you temper your expectations @hpertrain, not to discourage you. Certainly still ask if they'll take 30%, but be prepared to most likely pay more.