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Need a Plan .... Ready to start rebuilding!

Member

Need a Plan .... Ready to start rebuilding!

As a few people, I went off to college and splurged on my credit cards. Fell to hard times when my mom was diagnosed with breast cancer and in between jobs to help take care of her. Now I’m 25, ready to stop renting and want to get a grip on my credit before it’s too late. I need help as I’ve read many forums until my eyes begin to cross. I truly appreciate all the advice everyone gives on here. I learned about credit a little to late and what I feel is going to be impossible to fix for my future. SN: I will be obtaining a second job to help with the CO/Collections and build up a 3-6 month emergency fund. TIA for all advice !

Charge Offs on 3 CRs:
BBT- $2185 ; DOFD: 8-1-2016
Utility- $504 ; DOFD: 7-26-16

Collections on 3 CRs:
PRA (Cap 1)- $942 ; Date Updated: 12-27-18
Credit Mgmt (Comcast)- $460 ; Date Updated: 11/30/18
Conserve (Tuition)- $2043; Date Updated: 1-5-19

Current Revolving/ Installments:
USAA- $400 (want to close in 6 mo. due to not able to graduate) opened 7/2017
Discover- $200 (received an email on 1/11/19 that funds started processing on 1/9 and should receive my card 10 from then first class mail (1/19) )
Cap 1- $200 (haven’t received card yet) yessss they gave me a chance even though I burned them once!
NFCU secured- $500 (haven’t received card yet/taking place of USAA)
Auto Loan- 3 more years / 12 lates (i know terrible! On auto draft now )

**Update** I applied for the NFCU secured card in a branch on 1/10/19. I funded with $500 and paid for expedited shipping ($12). Received the card 1/11/19 by FedEX. Full process literally took less than 24 hours from application to card in hand.

**Please refrain from beating me down as I have beat myself up enough on what I could’ve done different. Life happens and I had to roll with the punches. This is my first time asking for help. The forums have provided a lot knowledge that was needed.
Current FICO 8 (Jan ‘19): EX: 566 TU: 598 EQ: 639
Goal (Dec ‘19): EX: 670 TU: 680 EQ: 690
Message 1 of 17
16 REPLIES
Established Contributor

Re: Need a Plan .... Ready to start rebuilding!

Hi Sunshine -- Welcome to the forums!! 

No one here will beat you down -- most of us have been in your shoes at some point -- many are still in your shoes.  There's no judgment, just advice & support. 

 

I'm glad to see you've already got a few secured cards to work with -- that's great (and congrats on your approvals!!).  Just treat them well, only report small balances, and your scores will slowly improve based on that positive activity. Speaking of scores -- have you obtained your FICO scores yet?  If not, do that.  I would also suggest monitoring your reports throughout your rebuild because there will be a lot going on and you'll want to keep track of your progress (and setbacks).   You don't need any more credit right now -- let those accounts age, build a good payment history while you work on your negatives for at least the next 12 months.  

 

Those charge-offs.  Unpaid chargeoffs are the worse becuase they still show a balance and are considered a maxed out account according to FICO because the account is closed.   So, you'll need to get those paid (you can try negotiating a settlement amount too) and updated to a $0 balance as quickly as possible.  BBT probably won't remove the negative tradeline after payment (but you can certainly ask) -- the utility co. might though - I would send them a letter asking for a PFD (Pay for Delete).  Offer to pay the account in full in exchange for deletion from your reports.   If they agree -- great.  If not, then go ahead and pay / settle the balance; once the account updates to paid / $0 balance,  begin a Goodwill campaign  (you can search the forums for more info on Goodwills) -- you can try a goodwill for both charge-off accounts but I feel like BBT may not bite at all (but worth trying). 

 

I don't have any personal experience with any of the collection agencies you've mentioned -- but others in the forum may have so someone could come along and provide some CA-specific insight.   But, since they are updating each month, they are dinging your scores each month - you're going to have to pay them.  Write PFD letters to each one.  Offer to pay in full or settle for a lesser amount (maybe 60%)  in exchange for deletion.  If they say no, then pay.  After payment, request a Goodwill deletion.  Goodwills are letters in which you request (beg for) deletion as an act of good faith; you had some financial troubles, you're getting back on your feet... blah, blah... - they often work well with CAs because once they get paid, they don't really care too  much about reporting.   Get any agreement you make in writing - even if the terms are made by phone, ask them to send you something in writing.  

 

Search the 'Rebuilding your Credit' forum for PRA -- i've seen posts about them - you may be able to get a feel for how they operate -- same for Credit Management.    I've never heard of Conserve but since this is a tuition collection, you may have luck getting it removed after payment. 

 

Also -- someone may advise that you send Debt Validation (DV) letters to the CAs.  You can try this -- if they cannot verify the debt, they have to remove it.  Problem with this is that it doesn't absolve the debt - so it can come back to haunt you at any time.  But you can do some research on them and see if this is a route you'd like to take.   You can try the DV, if they validate, then pay.  If they don't / can't validate, demand removal from your reports -- but if you know the debt is valid then you should still try to pay it in the near future so it doesn't come back later. 

 

Most importantly, have patience and ask questions whenever you are unsure of something.  Good luck!

 

 

 

 

 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting Score:   09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current Score:  12/08/2018: EX 769 ✦ EQ 765 ✦ TU 761
Goal Score:   800's


Take the myFICO Fitness Challenge

My AAOA: 2.7 years (not incl. AU)
My AoOA: 5.10 years (not incl. AU)
My Lone Baddie: 4.10 Year Old First Premier Charge-Off (PIF)

Tending my Garden til 1/2020


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 2 of 17
Member

Re: Need a Plan .... Ready to start rebuilding!

Thank you so much for such great information. I noticed with the CCs, most say to PIF multiple times a month or the AZEO method. Is it best to place high usage and pay <8.9% before the statement cuts? Or only use for subscriptions. I’m confused on which one work best with rebuilding. As for my FICOs I placed them in my signatures. They are as of today as well as the baddies. I ordered my annual report/scores online.
Current FICO 8 (Jan ‘19): EX: 566 TU: 598 EQ: 639
Goal (Dec ‘19): EX: 670 TU: 680 EQ: 690
Message 3 of 17
Established Contributor

Re: Need a Plan .... Ready to start rebuilding!

Oh -- I didn't even notice your siggy.   Your scores are not that bad...  In fact, I think you'll get fairly close to your goal scores once you pay off the chargeoffs (the current maxed out utilization from each charge-off is killer).   

 

You really don't need to concern yourself with AZEO right now -- you're rebuilding - your priority is establishing an excellent payment history. Show that you can use and pay responsibly.   AZEO is really only necessary to do prior to apping for new credit because it squeezes out every possible FICO point available for your profile  -- but it's also a bit of extra work to maintain and it prevents you from utilizating your credit to your benefit.  With AZEO - you pay everything immediately before the statement cuts each month - so you never get to take advantage of your 25 day grace period between the statement closing date and the payment due date.     It's up to you if you want to do AZEO -- maybe try it for a month or so just to get the hang of it and see what it does for your scores, but it really is not necessary to do on a consistent basis.  

 

But yes, keeping balances low is important.  You want to keep your overall uilization below 8.9%  (total balances / total credit limit) and your individual uiltization below 28.9%  (single card balance / respective credit limit).     You can use your cards as you wish - but, due to your low limits, in order to control your uilization you may need to make a payment before your statement closes.  Whatever balance is on your statement is what will report to the credit bureaus.  For example -  if you have a card with a $500 limit and a statement closing date of the 12th,  you want to make sure your balance on the 12th is no more than 28.9% of the limit (so less than $144.50; or you go really low and do 8.9% and keep it below $44.50).    This will ensure your statement prints with a low balance  - and that low balance is what gets reported.    Making multiple / weekly payments throughout the month is only necessary if you are using the card a lot and need to increase your available credit.   Otherwise, you can just make a payment to bring your util down before the statement cuts, and another payment for your remaining balance on the due date.   Whether you use your cards a lot or just for small monthly subscriptions is your decision -- both will work for FICO -- what matters is what works for you and your pockets Smiley Wink

 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting Score:   09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current Score:  12/08/2018: EX 769 ✦ EQ 765 ✦ TU 761
Goal Score:   800's


Take the myFICO Fitness Challenge

My AAOA: 2.7 years (not incl. AU)
My AoOA: 5.10 years (not incl. AU)
My Lone Baddie: 4.10 Year Old First Premier Charge-Off (PIF)

Tending my Garden til 1/2020


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 4 of 17
Member

Re: Need a Plan .... Ready to start rebuilding!

That makes everything better to understand. I have a book full of recommendations from other stories on the forum. I really want to tackle this head on and commit to it. I know it will take time and patience so I’m willing. Will update in 6 months (or sooner ) depending on the changes. Thank you again so much !
Current FICO 8 (Jan ‘19): EX: 566 TU: 598 EQ: 639
Goal (Dec ‘19): EX: 670 TU: 680 EQ: 690
Message 5 of 17
Established Contributor

Re: Need a Plan .... Ready to start rebuilding!

You're very welcome!! 

 

Staying active on the forums will help keep you going.  You'll have some ups and downs (hopefully mostly ups) so the support & encouragement makes it a little easier...   Also, we love updates, so don't make us wait a whole 6 months!!  

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting Score:   09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current Score:  12/08/2018: EX 769 ✦ EQ 765 ✦ TU 761
Goal Score:   800's


Take the myFICO Fitness Challenge

My AAOA: 2.7 years (not incl. AU)
My AoOA: 5.10 years (not incl. AU)
My Lone Baddie: 4.10 Year Old First Premier Charge-Off (PIF)

Tending my Garden til 1/2020


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 6 of 17
Regular Contributor

Re: Need a Plan .... Ready to start rebuilding!

Your in the right place.You actually have have a great variety of between your cc's and auto loan,so that's a plus.You should always pay all of your debts especially ontime.Try to keep your oldest account open.As long as any  serious derogatories such as charge offs and collection on our cr  they will continue to hold down your Fico score.It's not the end of the world and if you stay focused on improving your score in time it will.  GOOD LUCK..

Message 7 of 17
Frequent Contributor

Re: Need a Plan .... Ready to start rebuilding!

Good luck on your rebuild @tmr has given you some very sound advice.
We are here as a community to help in whatever way we can, we are not here to judge. At some point in our lives most of us have had our struggles with debt.
Slow and steady on your rebuild and you will climb out of this hole and will be better for it.
Keep us updated along the way please.


Message 8 of 17
Regular Contributor

Re: Need a Plan .... Ready to start rebuilding!

What helped me immensely is making a written budget & sticking to it. Before making a budget, I was always winding up with more month than money, robbing Peter to pay Paul, & never a steady cash flow. Once I wrote down ALL my expenses & what I was spending my paycheck on I was able to get a grip on my finances & start attacking my debt.

 

I took all my monthly obligations, such as rent, utilities, car payment, phone, insurance, etc and allocated half of each amount every paycheck (every two weeks). By doing this I knew how much I actually had left over in cash flow to last me till next paycheck. This also steadied out my cash flow so I knew how much I was going to have every pay period. I found this method much easier than having a lot of cash flow one paycheck, then being broke the following when I had to pay everything.

 

Another benefit of having a written budget is that you can visually track your progress. This motivates you to continue when you can actually see your debt vanishing.

 

If you would like a copy of my budget template, send me a PM with your email address & I will send it to you. GL!


Starting Score: Nov 3, 2018: EX 597 TU 599 EQ 616
Current Score: Jan 13, 2019: EX 626 TU 653 EQ 673
Goal Score: Dec 31, 2019: EX 700 TU 700 EQ 700


Take the myFICO Fitness Challenge





Message 9 of 17
Member

Re: Need a Plan .... Ready to start rebuilding!

PM sent. Thank you!
Current FICO 8 (Jan ‘19): EX: 566 TU: 598 EQ: 639
Goal (Dec ‘19): EX: 670 TU: 680 EQ: 690
Message 10 of 17