My Progress Thread- Credit Scores in the 400s. Reality check.

[collics]

First, hello to you all and Happy Holidays.

I haven't posted here in a while but hopefully I can get some guidance to increase my credit rating.

This may be long, but I wanna give as much info as possible.

If this should be in the BK section, let me know but I do have a BK7 so I wasn't sure.

I was discharged BK7 May 2014. I can't believe it's been 5 years. However,  in the last 5 years I fell back into some of the bad habits in addition to having some income issues.  My scores weren't even this low when I filed for BK. smh.

I recently was able to join NFCU and it sickened me that I wouldn't be able to take advantage of the products they offer with my credit trashed currently. The start of the new decade has me wanting to really get serious about my finances. I want to purchase a home eventually and also want my credit as good as possible when my BK finally gets removed in a few years.

Closed and sent to collection agencies: quick glance at Credit Karma totals my collections at $8443

Walmart CC

Amazon CC

Lowe's CC

Paypal Credit

Care Credit

Cap One CC

Repo

3 Barclays CCs- not showing in collections on my report, but I do get letters from the CA's that have the debts

Active cards/accounts: all basically at the max or close to it 

Discover CC max/$810

Cap One Quicksilver max/$1500

Merrick cc max/$500

First premier cc $323/$425

Target Redcard CC max/$1200

Dell $963/$1500

Firestone $158/$1000 

Auto Loan Credit Acceptance $12000

Student Loans - deferred, currently enrolled in school

First thing, I will no longer be using any of my credit cards. Locked away.

I have a general idea of how to pay off debt but not sure if I should start with my active debit or collections?

For the collections, is it horrible if they are just PIF, not deleted? How long will they stay on my report after PIF? I gets letters from most of the CAs, some offer settlements also.

My goals are to refinance my car from Credit Acceptance (20%+ interest rate) to NFCU, and later purchase a home. 

[FireMedic1]

If you could list who the CA's are. There may be some who PFD as a policy. You'll want to tackle the maxed out cards because they go against your util %. Which affects your scores and you dont want them to AA you. Collections dont count against util %'s for starters.

[collics]

Thanks for responding.

Jefferson Capital $3900. balance from repo after they resold.

Portfolio Recovery - $1372, $749, $450 they have 3 of my collections from Syncrony bank

Nationwide Recovery Services - $999 MRI scan.

Cavalry Portfolio Recovery - $499 Syncrony bank

Amsher Collection Services - $286, $70 they have two small medical debts

Credit Collection Services - $128 Progressive

[Chestnut1]

Do you know the DoFD ( Date of First Delinquency ) on each of these Collection accounts ?. 

Plus, as FireMedic Said. Your first goal should be to bring down all the credit card balances (total) to < 8.9%. This will give you a very good Jump in your score and mind you, you must keep the balances as-is go forward and always pay 2-3 days before due date to avoid high balances when the statement cuts.  This worked in my Case.

Once settled with the above, you must try and being in AZEO method. All Zero except one. Basically you will pay off all your Credit cards to $0 Balance except one which you can maintain a balance of less than 8.9%. 

[collics]

Yes I do.

Feb 2019 Jefferson Capital $3900. balance from repo after they resold.

Portfolio Recovery - Apr 2018 $1372, June 2017 $749, Apr 2018 $450 they have 3 of my collections from Syncrony bank

Nationwide Recovery Services - Aug 2019 $999 MRI scan.

Cavalry Portfolio Recovery - Apr 2018 $499 Syncrony bank

Amsher Collection Services - March 2018 $286, October 2016 $70 they have two small medical debts

Credit Collection Services - August 2017 $128 Progressive

Thanks for Azeo info. I’ll start getting down active credit cards.

[Chestnut1]

Got it. They all look fairly recent DoFDs. i see that Its about $4200 Approx in total collections. I would draft a plan, pick up the phone and call each of the collection agencies(today) and negotiate a pay for delete. Keep in mind, the success ratio will not be 100% but its worth a very good try. Even if few agree (Always ask the agreement in writing) , i would pay them off and get rid of them from the reports. That will give a huge boost to your scores. Now, what if they don't agree. I would still go ahead and pay everyone down to $0. Might sound like a resultless action, but trust me on this. Your file will look much cleaner when you go for Mortgage Under-writing (manual). Also, your "Balances owed" will be down to $0 which over the period will start helping your scores and your credit health. 

P.S: Maintianing AZEO method and making payments ontime CONSTANTLY will help your credit score rise. However, those Collections will always play a part from not letting you break through to the next level. You must address them.

Also, When you plan to go for Mortgage, make sure you don't have ANY LATES for more than 12-15 months. Its for your best.

[collics]

@chestnut1
Great info thanks so much.
Collections total is over $8k. ($3900 from repo)
For the ones that don’t agree to a PFD, would it be best to pay in full or can I accept a settlement? I assume a PIF may look better to a future underwriter?

[Chestnut1]

PIF is anyday better than a settlement. Do that if you have cash on hand Or device a plan and address one at a time on a monthly basis. 

[Chestnut1]

FYI, I have a repo too with $3,587 balance on it. This is due to fall off Early 2022. However, i'm debating with myself to call the bank and pay it off full and be done with it. I might do it this week. I know its a big dent to pay off such a cash at one go. But i know i will heal over the period of time. I'm better off with $0 balances owed than savings in my account.

[collics]

Great thank you so much.