Complete N00b - Help (and thank you for this forum)

[Anonymous]

I have been unemployed and living in a home for five years after a series of unfortunate events. I would like to begin to build credit, currently my score from experian is 464. I was lucky enough to get a Chase Liquid bank account (no checks and no sending money via routing or bank). I have no credit over past five years or activity.

I have basically three bad things on my credit and all say "ON RECORD UNTIL January 2019" . . . the three come to about $2.000 . . .  

I can pay that off right now. That's pretty much all the expendable money I have though. But I would honestly rather use it to get a secured credit card. My question. Should I pay that off or get the secured card? If i pay it off will it start the 7 year process anew? which will help w my credit? can I challenge/dispute the three to see if they'll take them off a little early? If they don't can I try again every other month to get them to take off before Jan 2019? 

*side note, I have $12,000 in student loans too that I am 5 years late on, I'm hoping to set somthing up there. This $2,000 i mentioned above is seperate from the student loan. 

Finally, one of the three people (aside from student loan) owed is portfolio recovery associates, they bought my capitol one debt about $500. . . they are offering to close account for half that. should I take them up on that offer? if I don't and let it drop in Jan 2019 will they keep calling. Keep hearing horror stories about them. (can I ignore them after Jan 2019?

Thanks and sorry for all the questions. So new to this. . . (also, if you use abbreviations in your response can you explain? or point me to a primer on abbreviations? PFD, SOL, took me a while to find what that means). 

Thank you again!

[stargazer25]

Welcome to the boards!

Negative Accounts:

Date of First Default?

Depending on that you can start asking for early exclusions from the credit reporting agencies. The biggest impact will be when your final negative falls off. 

Collection Agency? Amount?

Did you check the forums to see if this CA will do a pay for delete? If you can get a PFD I would do that ASAP before they change their minds. PRA is a monster that is hard to beat. 

I would get a secured credit card through somebody like Open Sky that doesn't require a credit check.

Regarding your student loans, there is a student loan forum and they might be more helpful with that especially after a spell of unfortunate events. 

I know there are other parts but some of the more seasoned folks might want to chime in.

Don't worry there is a light at the end of the tunnel.

[Kree]

Welcome to the forums, I too am fairly new, but everyone is very helpful.

I think the most important question for a rebuild is "what is your goal?"

Do you need a certain score by a certain date?

Do you want to rebuild because you can?

Is there a particular aspect of credit that you find useful in your life?

fourteen months isn't that long for things to fall off.  If the 2,000 is more useful elsewhere, and you don't need a perfectly clean credit report, you might want to just ignore these baddies for the moment. Also closer to the falloff date, (perhaps even now) you can submit a request to the credit reporting agencies, CRAs,  Equifax/Transunion/Experian, for a early exemption.

The main thing to consider is that once these do get removed, your average age of account, AAoA, and age of oldest accoun,t AoOA, will likely go down.  I would recommend getting two secured credit cards, and a secured loan to start building your new credit history.  This would be better use of your money, but that is an opinion, others might disagree.

[Anonymous]

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@Kree wrote:

Welcome to the forums, I too am fairly new, but everyone is very helpful.

I think the most important question for a rebuild is "what is your goal?"

Do you need a certain score by a certain date?

Do you want to rebuild because you can?

Is there a particular aspect of credit that you find useful in your life?

fourteen months isn't that long for things to fall off.  If the 2,000 is more useful elsewhere, and you don't need a perfectly clean credit report, you might want to just ignore these baddies for the moment. Also closer to the falloff date, (perhaps even now) you can submit a request to the credit reporting agencies, CRAs,  Equifax/Transunion/Experian, for a early exemption.

The main thing to consider is that once these do get removed, your average age of account, AAoA, and age of oldest accoun,t AoOA, will likely go down.  I would recommend getting two secured credit cards, and a secured loan to start building your new credit history.  This would be better use of your money, but that is an opinion, others might disagree.

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I agree - two secured cards and one secured loan. Go with the minimum ammounts, usually $200-300, no need to go bigger.

[TimFlorida]

Portfolio WILL keep calling even after it falls off your report.

[Anonymous]

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@TimFlorida wrote:

Portfolio WILL keep calling even after it falls off your report.

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Thats when you send them a cease communications (or FOAD) letter.

[Anonymous]

Thank you so much for the feedback. Your last line means so much. I know there's light at the end of the tunnel and this community helps. 

[Anonymous]

This helps so much. I always wondered what min amounts were for secured loans. I appreciate this!

[Anonymous]

Thank you so much for your response! I'm learning a lot! 

I've already begun the requests for early exemption #fingerscrossed 

and also I don't have a "goal" or "date" or "score" in mind right now. I'd just like to make things right and do the right things from here on out. And if there are good, legal ways to make things right a little quicker, i'll do that.  

Thank you again!