New to the boards and need advice

[Anonymous]

I'm 32 years old and have been very irresponible with credit since my college years.  Sadly, it has taken me this long to realize how important a good credit history is in today's world.  I have a really good job and am finally in a position to start paying off my debt.  I owe approximately $12,000.00.  Unfortunately, most of that consists of charge offs and/or collections.  My question is . . . where do I start?  Do I pay the smaller/larger debts first?  Collections or charge offs?  Oldest or newest?  Should I send "pay for delete" and "goodwill" letter?  How effective are those?  Also, if my credit score is around 500, how long do you think it would take to get it to at least 600-650?  I would really like to begin looking for a townhome in about a year.  Is this unthinkable?

Thanks so much for the help!

[fused]

Hi IndyColts and welcome to myFICO forums! I always say attack the stuff that is doing the most damage first. In FICO scoring, the more recent the baddie the more damaging it is to scores. Begin with late payments, collections, charge-offs and any other bad stuff less than two years old. If their is ANY inaccuracies or accounts that are NOT yours dispute them with the CRAs. Charge-offs and collections that you know are not yours shoud be disputed with CRAs and DVed (debt validated) to the CAs (collection agencies). This is commonly referred to as a 1-2 punch. Which state do you live in , Indiana? You will need to know your state's SOL (statue of limitattions). Also please read the credit scoring 101 thread in my siggy if you haven't already.

SOL threads

http://www.fair-debt-collection.com/statue-limitations.html

http://www.bankrate.com/brm/news/cc/20040116b2.asp

DOFD, Reporting SOL, DOLA

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=8713

Credit Reporting Time Periods

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=2689

[Anonymous]

I live in Tennessee and unfortunately, the things on the credit report are mine.  I just need to know where to start in getting it cleaned up so I can at least get into the 600s.  Any advice you could give me would be helpful.

Thanks!

[fused]

To better help you, you will need to list as much info as possible, both the good stuff and the bad stuff on your reports. These should include:

CC tradelines with CLs and balances and their status (paid, unpaid, etc.)

All late payments (when, how late and the creditor)

All charge-offs, collections, etc. (again, when was the charge-off date DOFD or DOLA)

Any good trade lines and their CLs and balances

[sadie71]

I am going to weigh in on this from my experience in the past few months.   I have been charting my score watch alerts and seeing what makes the most changes in my score.  So, this is just my experience and other's may have different experiences.

Anything that is a charge off/collection such as a credit card increases the score more than having a collection removed.

The newer the reporting such as a 30-day, 60-day or charge off, the more the increase in your FICO score.  So, I would start with those things that went bad in 2007, the move backwards as the older it seems the less it is hurting your score.   (30-day late in July, 2007 was removed and my score alert for that day went up 29 points).

The collection account for me and my DH that was reported in the past 1-12 months that were removed gained anywhere from 5-12 points, most 5 points, though.

Also, had 1 credit card, and 30% of your score is based on revolving credit and how the utility and management, open discover card with 1100 balance, reduced the utility and saw a 24 point gain. 

I don't know a lot about mortgages but I am closing on my home in the next week with our local bank and they consider several things in approving their loans such as your score, your overall report and what it looks like, your debt to ratio income, etc.  They did tell me that collections accounts such as medical was not really considered in their determination; however, if you go through a mortgage account they do consider them from what I am told. 

Keep all letters/documentation from any creditor that you get that says they will remove it, as sometimes it takes the CA up to 90 days to make the correction, so that when you get ready to apply for the mortgage and you go through the bank, you can provide that to them as proof that it is in the process of being removed.

Me and DH have scores in the mid 600s and there were a few things that were negative on his report that I had documentation was being removed from the company, so this help us, as we would have had a higher score if they had already been removed.

Good luck!