In a nutshell, I had pretty good credit until a freak medical event that happened to me the beginning of 2017. I should've had money saved up to cover any unexpected emergencies, but of course I didn't (lesson learned!!!). I was unable to work for a year which lead to an inability to pay my minimum payments thus I ended up with 2 charge offs and 2 collections -- DOFD is October or November 2017 for each of them, ugh -- which of course demolished my credit. I just turned 30 and I've made it a mission to NEVER end up in this situation again! And, I want to have amazing credit someday like several of you!
My scores as of right now: EXP 582, TRANS 572 and EQ 572.
Open accounts: 4; all current with no missed payments ever. One is a 49k student loan and the other 3 are credit cards at 68.2%, 68% and 45% UTI. I already have a budget plan to move the cards down to 48.9% UTI, then 28.8% UTI and finally to pay them off except one at 7% UTI which should take me 2 months from right now. (Shoutout to ABCD's links!)
Closed accounts: 13; 9 "paid satisfactory", 2 in collections, and 2 charge offs (104% and 105% UTI)
Midland credit management is the CA handling both of my collections ($834 with DOFD 10/2017 and $1101 with DOFD 11/2017) and sent me a "Pre-legal notification final notice" regarding one of my debts. I have not had any contact with them and had a few questions. Should I request verification of this debt or has that ship sailed because they purchased this debt a while ago?
In a perfect world, I would combine the MCM debts together ($1935) and try to negotiate 60% for a PFD. I've read from other experiences on this board that MCM usually negotiates to around 60% in exchange for a PFD. I don't have $1100 extra for one lump sum payment right now. What's the most effective road here? Combine the debts and try to get a PFD if I pay the full amount owed in installments? Keep them separate and try to negotiate PFD for the smaller debt (I could afford 75% of that debt right now as a payment) and pay the larger debt in full over time?Lastly, should all communication with them be CMRR or do I speak with someone (still not claiming the alleged debt)?
Truth be told, I didn't know squat about credit until I got this notice and started doing some serious homework which led me to the revelation of "oh crap I need to start fixing this yesterday". I'm now in extreme budget ramen mode and am employed full-time with minimal expenses so this will all be taken care of eventually, but I need advice on what order to proceed in.
Obviously my main goal is to get these 4 closed accounts to stop affecting my score negatively every month -- preferably without using the method of "I hope I don't get sued for the next 6 years" -- but I suppose I don't know what to tackle first in this situation. According to ABCD's homework, I should first get my charge offs back below 100% UTI but do I need to take care of MCM first with this legal notification, or at least negotiate some sort of plan with them to stop the progression of legal problems? Help!
Thanks so much to everyone in this community for all of the great advice i've read in other threads and the plethora of information in general! A week ago I wasn't thinking about my credit scores at all and now i'm challenging myself to get all of this solved and make sure it never happens again. You're lifesavers!
