Hoping for help (PLEASE!!!).

[Anonymous]

Help! I am trying to be a responsible adult after years of childish financial behavior, but I don’t know where to start.

Equifax score is 575.

I have no public records or liens, but 17 “potentially negative” items on my report. 11 are student loans that were never paid late, but have since been closed as they were sold off.  I have one repo from Cap One, which is about $1500. There are four collections that total about $900, but the biggie is a private student loan for about $7K. I have tried to negotiate with the collection agency (Williams & Fudge, Inc.), but they don’t seem to want to budge at all.

I went to a mortgage lender recently, who told me the best thing to do would be to consolidate my student loans (about 35K in debt, all paid on time or deferred as of now) and get credit cards (I have a car loan that has never been late – opened Feb 2009).

I went out and applied for a bunch (and then found out what a hard inquiry is and why it’s bad – lowered my score by 40 points in 6 months) and about half were approved. I now have: 

Cap One: 9/11 – 421/500 (paying on Friday)

Cap One: 2/11 – 3/500

Kay: 8/11 – 816/3000

JL: 10/11 – 36/250 (since paid to 0)

NY&Co: 9/11 - 148/300 (will pay off next Friday)

I was just approved for a Credit One card with a $400 limit, but it hasn’t arrived yet.

I recently got a great temp job with a place that is willing to hire me full time, but they will pull my report and do a detailed check. I can’t fix what I’ve done in the past, but I want to try to clear up as much as I can while I still can (I have about a month). I have about $2000 put away for Christmas, but I would rather use the money to get these things taken care of (a permanent job will mean presents for everyone once I am hired).

If anyone can give me any advice, I would really appreciate it.

Thank you.

[hoping2rebuild]

If it were me:

I would get my UTIL down to about 9 %

I would offer PFD's on the collections starting with the newer ones first, they are hitting your score the hardest

NO more credit apps for 1 to 2 years

I don't know what to say about the repo or the student loans maybe a MOD can chime in here with some better ideas

[llecs]

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

Ditto to the above.

To add, check the source of your score. You mentioned you went to a mortgage lender? Did you apply? If so, they would have given you your FICO scores. Rely on those. The same EQ FICO that your lender uses would be the same on myFICO.com if you purchase a score. The TU FICO may or may not match. Depends on what your lender uses, but would be worth looking if you applied.

I mention that because if the 575 was purchased from Equifax.com, it might not be a FICO score. It might be a FAKO called an "Equifax Credit Score". I throw that out just in case you did get a score from Equifax directly. That score can easily be 50+ points off your actual FICO score. There was one poster recently who had about the same score from Equifax.com, but his FICO was in the low to mid-600s and things weren't as bad as first thought.

If you didn't pull an EQ FICO report from myFICO, you might want to consider doing that. On the Accounts page, it will show a red flag column. If FICO sees that account as a negative, it will display a red flag next to it. I suspect that if your SLs are just closed and not late, then those 11 accounts are positive. I wouldn't worry about them.

For the repo, send a PFD as mentioned. If after a couple of PFD attempts, you might be better off just paying it.

For the CAs, including W&F, send a DV letter first. If they verify and you agree, then mail (never ever call) a PFD.

IMPORTANT: For any unpaid bad debt, keep your SOL in mind. SOL is the time frame a creditor has to sue you and ranges anywhere from 3-15 years depending on where you live and the debt type. If you don't have the $$$$ set aside to pay in full, if you had to to stop a judgment, then don't do anything at all to that debt. Don't make any calls, write any letters, etc. Let it sit. You wouldn't want to make an offer for $4000, as an example for the Williams and Fudge account, and they reject it and sue for the full $7000 instead and not have the money to pay it. Just continue to save up and start writing letters once you have the money set aside to pay it. You can always offer a settlement within the PFD if you wanted to.

Keep in mind, though, that your lender will likely require you to pay any bad debts prior to being approved. Give yourself a lot of time to save and write PFD offers.

IMO, ignore the lender's advice on the consolidating of the SLs. Adding a new TL would hurt your score more than help, though if it lowered your monthly payment it would lower your DTI which would help if income is an issue.

Definitely stop applying.

And ditto again, for max points, PIF all of your CCs to $0 except for one. Get the remaining one to report a balance of under 9% of the CL. I bet you can gain an extra 30-40 points by doing that assuming you did that in one month and all reported like I mentioned in the prev. sentence.

[Anonymous]

 Thank you for the advice! I am on the way to the Post Office for stamps right now.

[Anonymous]

I didn’t apply officially – he ran a report with all three scores at the bottom of it. The TU was 619 and the EQ was 540. The 575 I got this morning from Experian. It was 590 on the report he ran.

 I think I got lost in the SOL paragraph:

“IMPORTANT: For any unpaid bad debt, keep your SOL in mind. SOL is the time frame a creditor has to sue you and ranges anywhere from 3-15 years depending on where you live and the debt type. If you don't have the $$$$ set aside to pay in full, if you had to to stop a judgment, then don't do anything at all to that debt. Don't make any calls, write any letters, etc. Let it sit. You wouldn't want to make an offer for $4000, as an example for the Williams and Fudge account, and they reject it and sue for the full $7000 instead and not have the money to pay it. Just continue to save up and start writing letters once you have the money set aside to pay it. You can always offer a settlement within the PFD if you wanted to.”

The PFDs  I prepared all had settlement amounts in them. I shouldn’t be doing that? Or are you speaking to W&F specifically (I don’t have $7000 lying around!).

I hope to have the UTIL down as of next week. All but the Kay can be paid off by then.

I appreciate your help.

[hoping2rebuild]

PFD example letter didn't know if you were using one on here or made up your own

CA
address
city, state and zip

Re: #Account number

Amount: $XXXX.XX

To Whom It May Concern:

This letter is to inform you that the validity of this debt is disputed. I am not sure of the account number, as I have never heard from you regarding this account. The account number I have is the one listed on my Equifax credit report – which omits the last few digits.

In the spirit of compromise, I am willing to pay this account IN FULL in  the amount of $XXX.XX if you agree to immediate deletion of this account from any and all credit reporting agencies Equifax, Experian and TransUnion upon final payment, . The purpose of this settlement is merely to have this item removed from my credit files. It is not to be construed as an acknowledgment of liability for this debt in any form.

If you agree to the terms and accept this agreement, the amount DOLLAR AMOUNT HERE ($XXX.XX) will be sent to CA NAME HERE in exchange for full deletion of ALL references regarding this account from my credit files and full satisfaction of the debt. As certified funds will be used for payment, there shall be no waiting period regarding the deletion of this account from the credit reporting agencies.

CA NAME HERE agrees to delete ALL information regarding this account from the credit reporting agencies WITHIN TEN CALENDAR (10) DAYS following receipt of final payment as specified above and will not discuss the terms of this settlement with anyone, excluding your client on this account. If contacted by any third party, including credit-reporting agencies, CA NAME HERE will not acknowledge that any settlement offer was made, accepted or executed and will, in fact, deny knowledge of any such account.

If you agree to the above terms, please prepare a letter CA NAME HERE letterhead explicity agreeing to the same terms as the above settlement offer and have it signed by an authorized representative of CA NAME HERE. It will be implied that this letter shall constitute a legally binding contract, enforceable under the laws of YOUR STATE.

Your response must be postmarked no later than 15 days from your receipt of this settlement offer or this offer will be withdrawn and I will request full validation of this alleged debt, as provided for by the Fair Debt Collection Practices Act.

Please address all correspondence regarding this account to:

YOUR NAME
address
city, state and zip

[Anonymous]

I like that one better. If you know the debt is yours, is it OK to leave the top part out?

[llecs]

---

@Anonymous wrote:

 I think I got lost in the SOL paragraph:

“IMPORTANT: For any unpaid bad debt, keep your SOL in mind. SOL is the time frame a creditor has to sue you and ranges anywhere from 3-15 years depending on where you live and the debt type. If you don't have the $$$$ set aside to pay in full, if you had to to stop a judgment, then don't do anything at all to that debt. Don't make any calls, write any letters, etc. Let it sit. You wouldn't want to make an offer for $4000, as an example for the Williams and Fudge account, and they reject it and sue for the full $7000 instead and not have the money to pay it. Just continue to save up and start writing letters once you have the money set aside to pay it. You can always offer a settlement within the PFD if you wanted to.”

The PFDs  I prepared all had settlement amounts in them. I shouldn’t be doing that? Or are you speaking to W&F specifically (I don’t have $7000 lying around!).

I hope to have the UTIL down as of next week. All but the Kay can be paid off by then.

I appreciate your help.

---

Only communicate with any of your unpaid, negative creditors if you have the $$$ to PIF if you are inside SOL. Otherwise, wait until SOL expires. You can always offer a settlement within your PFD, but make sure you have 100% of it saved before doing anything if within SOL.

SOL (statute of limitations) is created and written by each individual state and can be found within your state's Uniform Commercial Code section of your statutes and laws. There's an SOL on everything...shoplifting, unpaid parking tickets, assault, burglary, unpaid CC debt (usually listed as "open" debt), SOL on unpaid checks, collecting on a foreclosure or repo, SOL on loans, and even SOL on library books in at least one state, SOL on collecting after obtaining a judgment, among other things. With regards to unpaid debt, a creditor has a time frame to go to court, have a summons issued to you for notice, and to sue.

The clock for SOL starts at the DOFD of the debt. This is the date the debt first went bad, whereby you never recovered and were current again. So, in some states the DOFD for unpaid debt is 3 years (like here in VA, as in open debts or verbal contracts). Ohio, for example, has a 15 year SOL on written contracts. Most of the SOL periods out there expire by 6 years, though there are a small handfull of states with SOLs greater than that. Below is a list, though look up your state statute because there are some errors on that list:

http://www.bankrate.com/finance/credit-cards/state-statutes-of-limitations-for-old-debts-2.aspx

In some states, SOL can stop or even the clock will restart if you get incarcerated, you move out state, you make a promise to pay the debt, you make a payment on the debt, you acknowledge that the debt is yours, etc. YMMV based on where you live and your state's laws.

In terms of repair, and using Williams & Fudge as an example, if you contact them in any way via a letter, a CRA dispute, a phone call, etc., you will wake them up. It's like putting a big bullseye and you'll find that collection activity will increase. If you offer W&F $3000, for example, they can reject it. They don't have to accept $3000. Maybe they want the full $7000. If you are inside SOL for that debt type in your state, the odds of being sued will increase. If sued, they can go for the full $7000 (plus court and attorney fees). If you do not have the full amount, then you'd lose your case and then you'd have a judgment report. Not only that, but then they can garnish your wages, sieze assets, etc., via the court. This is why you'd want 100% saved up before offering anything in any letter. Make sure you have 100% saved up so that way if they do sue, you can at least prevent a judgment from appearing because you can pay them off before the court date. And of course if you do have the full $7000 saved, you can offer less if you wanted to: $1, $1000, $5000, etc., your call. And this scenario hinges on if the SOL had not expired. Maybe it did. I dunno. But the above scenario applies to all unpaid bad debt like the other collections, CapOne, etc.

[Anonymous]

Too little, too late. So much for being proactive. Today I get an Experian alert saying that LVNV Funding has purchased my First Premier debt. They changed the account dates to 8/11 (one month before the expiration of the SOL in my state). I have my PFD letters in my purse to put in the mailbox, but I am not sure if I should still mail to FP, or offer the same PFD to LVNV. The FP debt is still showing on my CR as of this AM, along with the two new accounts for the same amount from LVNV.

I am sorry for being so lost, but this is confusing to me. I am not sure of next steps. I did some researching, and LVNV does not seem to have a good rep.

Thanks, again.

[hoping2rebuild]

Well maybe not,  Is 8/11 they date they have as the date assigned?

Date Assigned is just the date LVNV took over.

That has nothing to do with SOL you still go by the origional DOFD that was reported by the OC.

There aren't many CA's that do have good reputations and IMHO LVNV is no where near as bad

as Asset Acceptance!!!