Firecracker wrote:
My husband and I have decided we seriously need to repair his HORRIBLE credit. I pulled his credit report yesterday for the first time. Without going into too much detail, we have defaulted on a few loans and credit cards due to unemployment, birth of a child, etc etc. I didn't get his score, but I wouldn't be surprised if it is in the 400's. I am not really familiar with credit scores, credit reports, and how this all works. I'm not even familiar with the lingo used.
With that being said, I don't understand his credit report. There are several items that we defaulted on that say "charge off". What exactly does that mean? I pulled from all three bureaus, so they all are a little different. I also see that the "charge offs" mostly say that they won't be positive until 2013. I understand that - I know they don't go off of your report for several years (7 years from what I've heard). Also, what's the difference between a charge off, write off, and a collection?
I understand that we owe all of these people, but what steps do we take to fix this huge problem? There's a lot of work that needs to be done, and I'm willing to put forth the effort. Which items should be taken care of first, and how do we go about taking care of them?
Any help would be greatly appreciated. We are a young couple, and we want to take care of this problem before it gets any worse. Thanks in advance for any help!
*If anyone needs more detail, please feel free to ask. Thanks!*
Jenna
Welcome to these forums! You've taken the right steps.
Read, read, read, read, read, read, read, and read. Great place to start is Credit Scoring 101 and also the Abbreviations post. I think they are stickied around here somewhere. Also, become a student of credit. It takes time, but you'd be surprised how quick you pick up on this and how much you learn in a short period of time.
Charge-off (CO) means that the OC (original creditor) has closed the account. You still owe them, but they will at that point hire a collection agency (CA) to go after the money owed. Early on in a CO status, the OC likely will continue to own the debt. Write-off is very similar as CO. I have an account and the OC calls it a Write-off, but it technically means that it is still a CO. Collections or CA means that a CA is collecting on a past due debt. CAs are very bad for your score.
Warning: know your statute of limitations (SOL). Each state sets their own SOL laws. There is a link around here somewhere from bankrate.com that lists these SOL time limits. Doing anything inside of SOL will increase the likelihood of being sued. This includes sending any letters to OCs or CAs. Unless you have the money to pay the debt, and you are inside your SOL, we recommend waiting to fix that baddie on your report.
Generally speaking:
CAs - send a debt validation letter (DV) to them. See the warning above, though. If validated to your liking, offer them a Pay for Delete letter (PFD).
OC CO's - About all you can do is offer a PFD. If it is an older account, then I wouldn't recommend a PFD, but rather a goodwill letter (GW). Deleting an old OC can erase badly needed history. Erasing an old account can cause a score drop, even if it is a CO. BTW, you cannot DV an OC.
Lates - Send each account a GW and politely ask for the removal of the lates. Make sure the balance is either paid off first, if a closed account, or if the account is open, make sure you are current.
Good luck. Repair is a fun process. Document everything and never ever call a CA.
Edit to add.....Post each account individually in a new thread. You'll have more responses and more eyeballs because it would be shorter. Do that for each one and gather the info you are looking for then take action.Your scores will skyrocket in no time.
Message Edited by llecs on
06-10-2008 10:34 AM
