Need Help - Where Do I Even Begin???

[Want2BFinanciallyFree]

Hello all,

I'm really hoping that someone can help me out here b/c I have no idea where to start in repairing my very poor credit situation. 

Here's a little background on my situation:

• I turn 30 this summer and am still dealing with poor credit/financial choices from the last decade of irresponsibility
• I was laid off from my job 3 months ago and have not found new work yet - I am on unemployment and playing catch up on some bills I've gotten behind on (mainly my car note)
• I have a car loan with Wells Fargo Auto and owe roughly $10K but the car currently needs minor repairs that I have not yet been able to take care of
• When I was working, I made $50K/yr and spent more of it than I saved - I have no savings, no investments, nothing
• I do not have any active credit cards 
• I'm going back to school and transitioning into health care; I'm paying out of pocket for all of this now since I went into default on my student loans
• I gave up my apartment and moved back in with my parents to save money and go to school
• I've been dating my boyfriend for 3 years and we're talking marriage but I DO NOT want to marry him with crappy credit

I've been looking through the forum and have read tons of valuable information but it's all quite overwhelming and I don't know where to start.  I pulled my credit reports last in July 2009.  The scores were as follows:

• Equifax - 579
• Experian - 517
• TransUnion - ??? (got the report but no score included)

I just signed up for ScoreWatch since I plan on aggressively working towards repairing my credit and my Equifax score as of today is only 500!!!  I can only imagine that the other scores plummeted as well. I need a plan of action.  In reading some of the posts, I'm guessing my first step should be to remove some of the baddies from my report.  I should start by disputing the negative information, correct?  These baddies include a couple of charge-offs that are several years old (but not quite 7), collection accounts, late pays and the defaulted student loans.  This month I will be making my 5th (out of 9) payments in a loan rehabilitation program for my student loans.  I was told that once my 9th payment is made, a lender can buy my account and all negative reporting on the loans will be removed.  I'm hoping that will increase my scores some.  Also, there is an issue with Public Records.  The apartment complex that I recently moved out of was very strict when it came to paying rent (no grace period).  Rent was due on the 1st, if you paid on the 2nd there was an additional $50 fee and then $5/day for every day after that.  After 10 days, they file for eviction.  This happened to me twice, however, I always paid my rent (plus late fees) before the scheduled court date and they dropped the case.  But these instances are still showing up on my credit reports as Judgments even though I never appeared in court and the money was paid to the property managers before the court date.  ???

Any advice, direction, feedback that you can offer will be greatly appreciated!  Thank you in advance for your help!

~Want2BFinanciallyFree

[Jazzzy]

Hi...and welcome...

Let me take on some of these questions in bits and pieces, OK?

First...NO...you don't start by disputing negative information. You should only dispute incorrect information. You don't want the credit reporting agencies seeing you as a chronic disputer. That will do you more harm than good.

You want to deal with the negative information, but that certainly does not always include disputing that information.

[Jazzzy]

About your scores...I don't know where you got your Experian score, but consumers can't buy their Experian FICOs anymore, so likely the score you got isn't really a FICO score. There are a lot of scores sold out there that aren't FICOs, and they don't tell you much, so please be careful what you pay for.

The score you got here is a true EQ FICO score...so, that's a good one. You can get a good TU FICO score here, too. I wouldn't get too hung up on scores right now, however. Start on your credit repair journey, and then worry about scores.

As to your school loans...thank goodness you're in rehab with your loans. There has been some difficulty finding buyers for the loans after 9 months, so you may be in rehab longer than you planned...but it is one way to help repair the damage from defaulting on these loans. Make those payments meticulously. You don't want to mess up rehab. (BTW, I'm a nurse...soon to be a nurse practitioner. Welcome to the healthcare world...it's a good one.)

[Jazzzy]

As to the collections and charge-offs:

Am I correct that you don't have any money to throw at them right now? If you do, and if you have been reading in these forums, you'll want to try to work out what is called "pay for delete." That is where, if you can agree to a settlement amount with them, they would delete the account from your credit reports in exchange for your payment. They won't always go for this...but, if they want your payment, they might. The other alternative is to wait until time passes and they fall off. If you can tackle any of these, start with the newest, as it will affect your credit for the longest into the future.

I would encourage you never to pay them without trying to work out a pay for delete (PFD) first. This needs to be agreed to in writing before you give them any money (if they agree to do it). That is one sure way to get these items gone from your reports.

As to the public records:

It seems your apartment complex was successful in getting judgments against you. I'm not sure how they did this if you had already paid them. They apparently showed up in court and made their claim. If you weren't there, then the judgment may have been granted. You need to call the apartment complex. They need to satisy these judgments. If you did not owe this money, they need to vacate the judgments. It is better if you deal with them sooner rather than later. If too much time passes, the complex may not even have the financial records they need to show that they received payment from you.

I went through this list rather quickly with some first impressions. I hope some of it is helpful. You can see that credit repair is hard work, takes time, and (especially) takes a lot of patience. Eventually you'll want to take rebuilding steps such as getting a secured credit card, but...for right now...you need to work one-by-one on taking care of the issues that are holding you down. If you apply for anything right now, you will likely get declined, and the last thing you need on your credit report right now is wasted inquiries.

Hang in there, and good luck.

[Want2BFinanciallyFree]

Lynette,

Thanks for addressing my questions so quickly!  The Experian score was on the last page of my report from FreeCreditReport.com which was pulled in July 2009.  You're saying that's not accurate?  You're right though, I'm less concerned with the score right now and more focused on repairing all of the damage that I've done.  I've just got to figure out how to do that.

Also, I've heard that about finding lenders for loans coming out of rehab.  I really hope someone will pick me up.  If not, I'll continue as I have been but then my loan will still be considered in default.  :-( 

That's so interesting that you're a Nurse Practioner!  I'm completing a MA program now and plan to work as an CMA while I finish my pre-reqs for PA School! 

[Want2BFinanciallyFree]

Lynette,

I am trying to work my budget to where I have some funds to allocate towards the collections and charge-offs.  Like I said, I moved home so that I was able to free up some money.  But in all honesty, it won't be a whole lot right now...so I'll just put it aside until it's enough to negotiate a PFD and do it one at a time.  Seems like a long road ahead of me. 

I'll put a call in to the apartment complex tomorrow.  That is terribly misleading if they told me everything was good after accepting my rent plus late fees and then went ahead to court anyway!  I need to get to the bottom of that ASAP!

Thanks again for your help with this.  I really appreciate it.

[Jazzzy]

Your Experian score is likely what's called a PLUS score, or maybe a Vantage score. There are a lot of different score products. In this forum, you'll see them called FAKO scores. The ones lenders use most are FICO scores, however. So, the Experian score you have may be a legitimate "PLUS" score, for example, but it's not a FICO score. I'd just urge that you don't spend hard earned dollars on buying scores that aren't FICO scores.

When you get ready to attach a particular item on your report, come back here and post more specifics on that item. There are a lot of folks here who know the ins and outs of these issues. Many of us have walked this same journey, and we're not here to judge. We're here to help.

You are going into a great profession. I think there will be a lot of room for Nurse Practitioners and PAs in today's healthcare system.

[Jazzzy]

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@Want2BFinanciallyFree wrote:

Lynette,

I am trying to work my budget to where I have some funds to allocate towards the collections and charge-offs.  Like I said, I moved home so that I was able to free up some money.  But in all honesty, it won't be a whole lot right now...so I'll just put it aside until it's enough to negotiate a PFD and do it one at a time.  Seems like a long road ahead of me. 

I'll put a call in to the apartment complex tomorrow.  That is terribly misleading if they told me everything was good after accepting my rent plus late fees and then went ahead to court anyway!  I need to get to the bottom of that ASAP!

Thanks again for your help with this.  I really appreciate it.

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It's tough to tell what happened. It honestly could have been an oversight. Bottom line is to take care of it ASAP so that time doesn't make it worse. Approach them as if they made an innocent mistake. Remember...more flies with honey than with vinegar. Right?

[Anonymous]

Call your Guarantee Agency for your student loans and ask about a Title 4 eligibility letter.  6 months of consecutive on time monthly payments makes you eligible for financial aid again.  The catch is that you must continue to make your payments on time every month while you are in school.

[Anonymous]

If a default judgment was entered against you, you would have recived a copy of the order in the mail from the counrty clerk.  Usually, it's a big fat envelope, kind of hard to miss.  If you didn't get these, it could be that the clerk mis-filed the paperwork and somehow the CRA's picked it up as a judgement.  Contact the court and get copies of your civil court records.  If these judgments were dismissed, but filed wrong, have the clerk correct it, then file a dispute with each of the CRA's.  It'll take a couple months to update on your CR's, but they'll go away.

If the judgments were ordered, then from what you said, it sounds like you have grounds to vacate as you did not legally owe then debts.  You would need something like cancelled checks, paid receipts, bank account records or the appartment complex's records of your account.  If you can show that you paid prior to the court date, then the judgments can be vacated.  You could do this on your own, but it would be best to consult an attorney about this.  If you do get them vacated, then you will still have to dispute with the CRA's in order to get them to update since courts do not report.