[Warning - it's a long post!] I was unemployed for two years from mid-2002 through mid-2004. During most of that time, I paid all of my debts on time, but during the last few months of my unemployment, when I had eaten through my savings, I started missing payments on everything. I didn't call my creditors to work out the problems (big mistake, I know). I continued to miss payments for ther first few months after getting a new job. Then I was able to get current on mortgage, second mortgage, two student loans, HFC personal loan, Wells Fargo personal loan (paid off), and a Bank of America credit card (which I mistakenly closed once I became unemployed; should have just left it open). I have been current on these for the last 21 months (according to MyFICO).
The problem is that I never got current on 10 credit cards and 3 store/gas cards (so many cards, what was i thinking?!). It was always my intention to get them paid off or go to credit counseling to help me pay them off, but obviously I never got around to it. I am now in a position to start paying them off. Most of them are listed on my credit report as charge-offs. A few are listed as in collections. However, the date of last activity on these credit cards is very fast (within a few months) approaching the 3-year statute of limitations in MD. I know that the passage of the statute of limitations only means that the creditors can no longer sue me, but that the charge-offs and negative payment history will stay on my credit report for 7 years. Should I start making payments on these cards or just let them be? I am afraid that paying them off will lower my score by making the date of last activity more recent and re-start the 7-year clock on how long they stay on my credit report. Should I just focus on paying down my personal loans and the B of A credit card (which is closed, but in good standing)? I have been paying extra on these items, but maybe I should take the money I was going to use to pay the charge-offs and apply it to these items?
Also, can someone help me understand a few things from MyFICO summary?
- MyFICO says that "[a]ccording to your Credit File you have a total balance of $0 on accounts that are currently delinquent." So that does not include the charge-offs?
- MyFICO says that I "currently have a combined revolving balance $20,077." So they are including the charge-offs or collection accounts in this number?
- MyFICO says "[t]he proportion of balances to credit limits (high credit) on your revolving accounts is 107%." So that includes blanaces from charge-offs/collections?
Sorry for the long post. Things have improved a great deal for me financially and I want to start working on building up my FICO score (currently 563). I have totally changed the way I use money and usually pay cash or charge items to a corporate Amex card (this card is secured by my company and does not appear on my credit report; I have paid it off in full every month for 2 years). Thanks in advance for your help!