topic Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff.... in Rebuilding Your Credit

Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Thu, 16 Jul 2009 11:48:47 GMT

Hello everyone I am currently getting ready to dump about $3200 and pay off all my credit cards so I can lower my monthly bills and get my credit back up to where it was before I lost my job about a year ago. So I am getting ready to pay off a Capital One and three cards from Chase. Now with two of the cards from Chase I agreed to close the accounts and just pay them automatically every month for a set amount and they agreed to drop the interest rate down to like 4 or 5%. Well I am getting ready to pay them off and I was wondering what it takes to get a PFD (if it is even what I'm looking for)? I had a couple of late payments that I was in constant contact with them about but they didn't care and docked me anyway, and now I figured since I'm paying them off they could remove them in return. I've been in contact with them over the last few weeks and they are saying they can't remove the late payments because it would mess with their integrity (like a cc company has any to begin with)....Anyway, so I figured I'd come here since you all know my rights a lot better then I do. Is there anything I can do to stand up to these bullies or am I just out of luck and have to wait for it all to clear itself out.

One more thing, right now I have a pretty low score of between 585-605 and I'm curious where my score will jump to (approx) if I pay them all off which would leave me with nothing more then student loans (I'm still in school) and a car payment. I just want to get where I was a year ago and be back in the 720-730 range.

Thanks in advance!!!!

07/10/2009 - TU: 597 - EX: 585 - EQ: 606

Message Edited by Almost_Tactful on 07-16-2009 04:48 AM

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

PayingTheBills — Thu, 16 Jul 2009 13:31:49 GMT

No other baddies other than the late payments on the 2 CC accounts?

Right now those two closed accounts are KILLING your score, because your "available credit line" on each card is set to $0 once the card is closed, so its very likely that overall you're looking at >100% utilization even after you add you other two cards in.

Can't say that for sure though without seeing your balances and credit limits for each card.

As far as the late payments go, after two years they won't affect your score nearly as much. Feel free to pester Chase to see if they give in, but they aren't likely to do a PFD. Maybe a GW if you're persistent enough. Are we talking about 30, 60, or 90 days lates? How many of each and when were they?

Like I said, those closed accounts are hurting your score a lot, since your utilization counts for 35% of your score overall. So get those closed accounts paid off, and then get your other cards to <9% utilization each, and you should see a big jump in your scores.

Message Edited by PayingTheBills on 07-16-2009 09:31 AM

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Thu, 16 Jul 2009 16:03:50 GMT

Hey Paying, thanks for the reply I'm looking at my credit report right now and on one chase I have one 30 day and one 60 day, the second chase has one 30 day, and the Chase I'm keeping is clean. The only other late payment I'm showing is on the Cap one I am also keeping which is a 30 day from Feb of 08 and a 60 day from Aug 08 when I ran into real hard times. So on my entire report the only thing I am seeing is a total of is 3 30's and 2 60's with the most rescent being 8 months ago. I also have a Kay's Card that I've had for about 10 years now that I've never been late on and I just got Ford to remove a late payment from 2 years ago on a car loan that was an error. So as it sits right now on the two closed cards I have a balance of about $2000 and on my open cards I have a balance of $1000, so if I understand this right I'm being looked at right now as having $1250 available and $3000 used on major credit cards? Does my Kay's card help at all since my limit is $1800 and it's empty?

Thanks again!

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

PayingTheBills — Fri, 17 Jul 2009 04:00:01 GMT

Assuming your Kay's account is open, it absolutely counts, and it's helping your ratio a great deal.

So your current utilization % overall is ($3000) / ($1250+$1800) = 98.4% util, which FICO considers "maxed."

If you can get that $2000 balance on your closed accounts paid off, your util will drop to 32.8%, which should bump your scores a few dozen points, but its very hard togive an accurate prediction.

Ideally, you'd want to get that other Chase card to under 9% AND pay off those two closed accounts.

Most "FICO High Achievers (scores 760 and above)" average about 8% in total utilization.

Keep working on GWing those late payments, but thankfully some of them are 30 day lates, which are not as bad. If you're persistent enough, maybe some can get removed. In the meantime, take heart, you're on the right path now, and after all those late payments cross the two year mark, they will probably have very little impact, and they will have less and less impact as more time goes by.

Just stay current from here on out and you should be in the 700 club in no time.

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Fri, 17 Jul 2009 11:17:49 GMT

Awesome Well here in about 3 more days they will all be paid off completely and I can't wait. I was really hoping to get the late payments removed but as much as I beg, plead, and yell at Chase it's not helping....but thanks for the information I guess I'm not as bad as I was thinking So now you seem to know your stuff, when using a credit card for like day to day stuff and then paying it off at the end of the month, does it help? Like if I use my card to get my gas and then at the end of the month pay the card off will that help or hurt my credit? Once they are paid off I don't plan on using them again like I did in the past. It'll be a, "Do I have the money for this? Yup. Alright, I'll put it on the card and pay it off when the statement comes in." Is that a good approach or should they just sit in the drawer and stay empty all the time?

Thanks again!!!

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Fri, 17 Jul 2009 14:42:21 GMT

You can certainly leverage your credit cards to continue your good credit history without going into debt. These days, credit is a use it or lose it game. You can sock-drawer them, but you'll need to make sure that they don't go completely inactive by using them and PIFing at least every other month. Ideally, you'll want to let a very small balance (say, $5) report on ONE card. One thing that you might consider is putting a recurring monthly bill on each card-- a bill that is PIF'd every month. Perhaps keep one card in your wallet for your daily purchases that you PIF every month--effectively using your credit card as a debit card.

Congrats on getting those cards paid off! Feels good, doesn't it?

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Fri, 17 Jul 2009 14:49:00 GMT

Thanks for the reply Lil so really the whole PIF is key and if you do keep a balence make it something silly like $5. I can do that I just want to get my credit as high as possible (like anyone else) so when I go to get the big stuff like a house or a car they don't bend me over. Let me ask you yet another question. Chase jacked the living crap out of my cards interest rate to something stupid like 32% what can I do to get that to a reasonable amount? I mean is that even legal, I know my credit is no where near perfect but 32%, really?

07/10/2009 - TU: 597 - EX: 585 - EQ: 606

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Fri, 17 Jul 2009 15:11:05 GMT

Sadly, yes it's legal, and yes... they seem to love to do it. You can call and ask for an APR reduction, but don't hold your breath-- it doesn't seem like most people are having much luck with Chase ratejack recons these days. So, the best protection against RJ is to PIF. Don't carry a balance and the APR won't matter.

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Fri, 17 Jul 2009 15:17:52 GMT

There's that PIF again lol Cool, I'll carry that little $5 bal on my other card with a normal rate and when my credit goes up I'll keep bugging Chase to stop being trolls. Thanks for all the help everyone

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

PayingTheBills — Sat, 18 Jul 2009 17:57:04 GMT

One of the things that is helping my score according to my ScorePower reports and TU FQM reports is "You've shown recent use of a credit card."

I have 3 cards, two credit and one retail, and I try to rotate which one reports a balance of 1% or so.

Something to keep in mind that you can still PIF AND let a small balance report by knowing your statement date. Usually your statment date is a week or so after your previous payment due date, so let a small balance report, and then PIF before they charge you interest a few weeks later.

You're on the right path, definitely keep us updated once your new balances update and you get your new FICO's. We love hearing about that stuff.

Message Edited by PayingTheBills on 07-18-2009 01:57 PM

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

PayingTheBills — Sat, 18 Jul 2009 17:59:32 GMT

Also, I agree with the idea of using your credit card as a debit card. I do this with my BofA WorldPoints Visa for the (meager) reward points, and I pay it twice a month.

I haven't used my debit card in months.

I put one item on my Cap1 MC a month and PIF, and I use my Target card every other month and PIF.

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

IKON — Sat, 18 Jul 2009 18:56:30 GMT

"Something to keep in mind that you can still PIF AND let a small balance report by knowing your statement date. Usually your statment date is a week or so after your previous payment due date, so let a small balance report, and then PIF before they charge you interest a few weeks later"

im so confused haha... ok how can u make sure it shows a balance of ur cr. do cc usually post on cr before new statement comes out? been trying to figure it out maybe someone can clear this up for me

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

RadioRob — Sat, 18 Jul 2009 19:41:26 GMT

Most CC companies provide online access to your account where you can see recent purchases, amount due, available credit, etc. Use the info there to your advantage.

Basically you have your payment due date... pay off say 95% of the balance. That way you've paid on time. Your statement is then typically issued about a week later (again with the online system, most companies will show you previous statements online, just look at the history to find out).

After that statement date, issue another payment for the remaining 5% so now you've paid the full balance, and the CCC has reported a 5% balance to the CRAs.

Message Edited by RadioRob on 07-18-2009 03:41 PM

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Sat, 18 Jul 2009 20:23:54 GMT

Wow, lots of good info in here Let me ask you all this. Since they already closed two of my accounts and I've just been paying them down would it hurt my credit to see if they would take less and consider the account paid off? Or would that fall into the charge off catagory and ding my credit? If I can get away with paying them less I will but only if it doesn't hurt my score

Message Edited by Almost_Tactful on 07-18-2009 01:23 PM

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

RadioRob — Sat, 18 Jul 2009 20:29:36 GMT

You would need to be very careful with that as they can report it as Settled or Paid For Less Than Full, etc.

If you are able to negociate a settlement for less, be sure you understand fully how it will be reported to the CRAs and that you get it in writing. (If someone tells you something over the phone that sounds good.... being able to enforce that later will be next to impossible if the person making the deal does not have authority to do it or if they decide to change terms later.)

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Sat, 18 Jul 2009 20:31:24 GMT

Well I owe 1300 to one and 700 to the other, will it even be worth the hassel? It's not a whole lot of debt so I can't see them coming down and if they do is it worth the work to risk a Paid for Less on my report? What would you do if you were me?

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

RadioRob — Sat, 18 Jul 2009 21:09:31 GMT

Regarding your FICO score itself.... PIF vs settled does not make any difference. If your goal is purely for score, you won't be helped by PIF vs getting them to settle for less.

Now... when someone manually reviews your credit report (say for a loan), it will look better for a PIF vs a settlement. The same is true when applying for a CC. They can see if you have had baddies and if they were settled as well.

So ultimately it depends on your goals... remember this is going to stay on your CR for 7 years. Personally if it were me, I would just pay the entire thing off and not deal with the settlement. Considering the relatively small amount of debt, etc... I would just pay it and have it off my conscience.

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

IKON — Sat, 18 Jul 2009 21:16:03 GMT

thank you for the clarifications...

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

BungalowMo — Sat, 18 Jul 2009 21:53:46 GMT

One thing I'd like to add... The day your cc statement is cut, is the day they send the report to the 3 CRA's. So looking at your online statement...if it cuts on the 27th, make sure any payment you want to make will clear & POST before the 27th.

Look at it like this...due date means nothing (sort of)...POST date is the biggie. If you pay before the post date...that is always before the due date. (post date info is going to be exactly what they send you in the mail) I guess I just try to get used to paying before they cut the statement.

OK...did that make sense??

Re: Trying To Iron Out The Details and Use Any Tools I Can To Make The Most Of My Payoff....

Anonymous — Sat, 18 Jul 2009 21:56:18 GMT

It makes complete sense to me just make sure I pay my stuff a week early lol