Bad Credit Question

[Red1Blue]

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@Anonymous wrote:

Hello everyone-

 Have about 3 good standing low limit credit cards.

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Hi @Anonymous, I see you have 3 good standing credit cards. If they are secured cards you might want to look into adding more deposit and increase the limits on the cards. I do not see any installment accounts listed. You might want to add a shared secured installment loan or credit builder installment loan to give you a credit mix. As @Anonymous said try to save money and improve your family situation first before you worry about the scores. Once you have decent savings for the rainy day you can start looking into CO/CAs especially if things are going to fall off in 3 years.  Good Luck.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:
whats the point in the small if you cant do the big?

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+100

I have been in the same spot. I am nearing the 7 year point for 90% of my baddies and I decided not to waste resources ($$$).

I decided to pay what will still be on my reports past the bulk of them aging off.

Then, if I have a decent savings built up and can spare the change, I will then at that point start worrying about those accounts.

I want to buy a house and a new (to me) vehicle. If I focus all my money on accounts that will no longer even be on my reports by the time I am done weeding through them, I will not have a down payment for house/car, mortgage expenses (closing costs, etc), or an emergency savings.

Prioritize your resources.

I know the moral code around here is if you owe it, pay it. I am not saying I disagree, but I believe in finances over fico scores. I am going to do what is best for me and my family and not waste money on something that will have little to no change in my situation when I could be putting that effort ($$$) elsewhere. I can always circle back to those debts that are past the SOL (statute of limitation) and have aged off my CRs later when I have me and my family in a better situation. Debts don't go away (unless they cancel them) and instead they just pass the SOL and age off your CRs. They arent going anywhere.

If I were you, I would bide my time for the next 3 years with those COs and CAs, build up a savings for emergencies and whatever major purchase may be in the future and build up positive credit in the meantime. If you start working on building positive accounts now, 3 years from now when everything falls off you will be positioned much better than waiting until then and then starting to build credit (been there, did that). I previously though once everything aged off that I would have good credit and that was false! I needed to be building credit while I waited, which is what I am doing now.

I wish you the best and I honestly would not even touch the low hanging fruit unless you think you can work your way through all of those account between now and 3 years from now and just save your money for a better cause down the road. 

Again this is all just IMO

Good luck!

I will add a few ideas in another response so this one does not drag on for ages.

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+100

[Anonymous]

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@Anonymous wrote:

Continued....

1) So, I would 100% pull all 3 credit reports from annual credit report. It is free but has no scores, but scores are not something to worry about right now. These specific credit reports are the most comprehensive that I could find and spell out exactly when to expect these derogatory accounts gone.

TU (Transunion) will list "estimated date of removal"

EX (Experian) will list "on record until"

EQ will list "date of first delinquency", just add 7 years to those dates and that is when they will fall off your EQ credit report. On the reports it also lists "major delinquency first reported", this is not the date you are looking for.

This may help you gauge how long you really have to work through these debts and maybe how to prioritize them, if you do decide to pay any/all of them or if you should wait them all out.

2) do not dispute in hopes these accounts just fall disappear from your credit reports. These days creditors are sharp to this disputing tactic and most times are absolutely on top of it and will respond. You owe them money and while you do they are highly unlikely to go without responding to these disputes and any updates on accounts that have been dormant (and in your case many years for some, likely) will dong your scores further. Just avoid it unless absolutely fraudulent or erroneous.

3) do not reach out to any CAs or OCs (original creditors) unless you have absolute intention to pay then or make a payment arrangement you can 1000% stick to. You can reset the SOL to sue you (different than 7 year reporting window) generally if you:

Reaffirm the debt is yours

Promise to pay

Make a payment arrangement/plan

Make a partial payment

You will need to check the laws for your state on how long SOL is for your type(s) of debts and what specificall resets it, but that is the jist of it.

I would not make any partial/random payments without contacting someone and settling/negotiating/agreeing to said payment beforehand.

Good luck and feel free to come back for more info/guidance or if you have questions!

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Great advice, but if you need to call for information to confirm the DOFD or something, that's OK as long as you follow the guidelines set forth above not to reaffirm the debt. But it is safer not to call if you're afraid you're going to do one of those things.

As a matter of fact I would recommend email so that you have proof of what was stated and be very careful what you ask or state.

[Anonymous]

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@Red1Blue wrote:

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@Anonymous wrote:

Hello everyone-

 Have about 3 good standing low limit credit cards.

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Hi @Anonymous, I see you have 3 good standing credit cards. If they are secured cards you might want to look into adding more deposit and increase the limits on the cards. I do not see any installment accounts listed. You might want to add a shared secured installment loan or credit builder installment loan to give you a credit mix. As @Anonymous said try to save money and improve your family situation first before you worry about the scores. Once you have decent savings for the rainy day you can start looking into CO/CAs especially if things are going to fall off in 3 years.  Good Luck.

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I would add a couple more secured cards before I would increase the limits on my existing ones. Fico mainly uses percentages, so the credit limit is not very relevant to score, just the balance to credit limit ratios, which you can control. A couple more cards with positive payment history will help prepare you for three years from now when your report goes clean. 

[Anonymous]

All great information. Thank you so very much.  Will definitely follow it.