Newbie Detailed Info | Can Someone Help | Where To Start

[timshifty]

Hello, I am in the process of trying to fix my creidt. Me and my mom are trying to purchase a home in the near future. I do not have much extra money to pay any of these off right now, maybe a little here and there. I am trying to figure out where to start. Most of our accounts are older account. I was getting ready to send out letters to every account holder asking them to verify the debt and seeing what information I get back. I thought I would ask if that was a good idea or not or if there was a better option I should choose. I didnt think an email or doing any of that would be better over sending a letter but I am second guessing myself. Any input would be great. I tried searching the exact steps but I didnt really see the exact steps I should take. Do I ask for verification, then dispute, then offer to settle and pay to delete in that order?

Capital One Auto - $5,770 Will settle for 13% of the debt $753 (falls off 9/22)

Capital One Credit Card - $986 (falls off 4/22)

Comenity Capital/HSN - $1,948 (falls off 4/22)

Credit One – Sold to Collection Agency and charged off (falls off 2/22)

Discover - $771 charged off (falls off 3/22)

First Premier - $591 (falls off 4/22)

First Premier #2 - $538 (falls off 4/22)

JPMCB Card – Charged Off (falls off 5/22)

Total Visa - $457 charged off (falls off 10/25)

Webank/Fingerhut - $1,207 (falls off 2/22)

AFNI/AT&T - $1,442 (falls off 7/25)

Cavalry Portfolio/Synchrony Bank - $1,191 (falls off 3/22)

I C Systems Collections/Sprint - $1,145 (falls off 8/26)

Jefferson Capital/Verizon Wireless - $5,806 (falls off 8/22)

L J Ross/Flagstar - $768 (falls off 4/26)

LVNV/Credit One - $984 (falls off 2/22)

[CreditBob]

Do you have any accounts that are in good standing or are all of your accounts being reported as negative? Is the information that you stated correct & accurate? Paying off the debt does not mean the creditor that is reporting the adverse information will the delete the trade line. All that you can do is start the dispute process & see what happens. If everything is valid and re[porting correctly then the credit bureau's investigation will show verified by lender or creditor. 

Have you established any new credit, such as a secured credit card or with www.creditstrong.com? I ask this for the following. The FICO score algorithm wants to see positive credit on the credit report since the negative information. If you do nothing then your score is not going to rebound the way that you would like it to. 

[timshifty]

I have student loans that are all in good standing. Other than that I really have nothing. I was planning on opening up a secured card and will look in to that place you sent me. I guess I am just at a loss of where I should start and if I should just ignore the ones that will drop off in a few years or if it will be worth trying to settle for less so it shows paid in full or partial.

[Anonymous]

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@timshifty wrote:

I have student loans that are all in good standing. Other than that I really have nothing. I was planning on opening up a secured card and will look in to that place you sent me. I guess I am just at a loss of where I should start and if I should just ignore the ones that will drop off in a few years or if it will be worth trying to settle for less so it shows paid in full or partial.

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How far out are you planning on a mortgage app? Are you thinking of waiting til perhaps end of next year when you can start EE (early exclusion) of the baddies off your reports? Maybe that could save you some money by waiting a bit longer. Work on the newer stuff and just let the older stuff die off slowly and do EE when possible.

I would strongly suggest pulling all 3 CRs from annual credit report for free (no scores and free to do weekly through 4/2021). Since you can pull weekly as needed, you can keep a close eye on the changes as you work on your derog accounts and wait for others to drop (if you choose to).

I suggest reports from there because they are the most comprehensuve ones that I have found, yet, and give specific dates when to expect baddies to drop off. TU will list "estimated date of removal" and has 6 month EE. EX has "on report until" dates that have 2 months of EE built in, but you could still ask for EE a month before the listed date. EQ will have "date of first delinquency". There really is no doing EE with them, but at least you know they will drop sometime becore they hit 7 years from that listed date.

I, personally do not agree with disputing everything because it may hurt you and your scores more than help you in the off-chance that they get removed with no payment.

Good luck!

[FireMedic1]

Right now without knowing more of what you owe because you left out a few balances. Your $23,500 +/- in debt. When it comes to getting a mortgage. The UW will want to see no debts. Clean slate. Since you said you dont have much money to pay on these. Your kinda stuck between a rock and a hard place. Yes you could wait for all those to fall off. But as some get closer to that date. They could go legal on you. Disputing could /would poke the bear and make it happen sooner. Skip that thought.

What is the income to pay on these? Theres always a fresh start and in 2 yrs you could go with a FHA loan. Or look at it this way. You owe a down payment on a house. Add another $10,000 for a down payment and its up to $35,000. Not trying to be mean. Just laying it out there in numbers to see what it will take.

[timshifty]

Thanks for the feedback

Right now I am on disability so there would be no way they could collect on me if they did try going after me. With that said I do understand what your saying and I know I owe a lot. I do know some of those place would settle for less. I know now after talking to a mortgage company that me and my mom do not qualify because of all these problems but I want to start doing something to fix them. Is it going to hurt to reach out to all of them and ask them to verify the debt and if they have any offer to settle? Or do I dispute them all? Do I make them provide the proff they exist?

[Anonymous]

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@timshifty wrote:

Thanks for the feedback

Right now I am on disability so there would be no way they could collect on me if they did try going after me. With that said I do understand what your saying and I know I owe a lot. I do know some of those place would settle for less. I know now after talking to a mortgage company that me and my mom do not qualify because of all these problems but I want to start doing something to fix them. Is it going to hurt to reach out to all of them and ask them to verify the debt and if they have any offer to settle? Or do I dispute them all? Do I make them provide the proff they exist?

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I would absolutely *not* dispute them. Again, it will likely make your scores worse when many, if not all the accounts you disputed, come back "verified" and updates on your credit reports. If they havent been updating for some time (especially those really old ones!), then your scores will take a hit. Stay away from disputing!

I also would not call a single one of these unless you are ready to pay them. That could reset the SOL if you "poke the bear" and just call to feel them out. I would contact the ones you are going to pay as you are ready to deal with them.

Even if they can't go after your disability, many are probably outside of the SOL anyway. I would check that for the state you live in. Just because they cant garnish you doesn't mean they can't try to collect.

So I still feel like if you are very limited on funds to work on these debts, I would wait out the bulk of them that drop off in 2022 and work on the the others so you at least have a goal in sight. You could save up a downpayment vs paying debts that by the time you get there, they would have fallen off anyway and to me that seems like wasted resources, especially when they are limited.

If you feel like you need to wait them all out, then that is a choice/option, too. I am not proud to say it, but I thought for the longest time that was how it worked, so I waited out most of my debts. I still have several left and those I am working on, except for the ones that are months away from dropping, but the bulk of them are now gone off my CRs.

Paying the baddies in full "looks" much better to a mortgage UW, but if that is not possible, then settling the ones that are going to be around for awhile on your credit reports is a must/minimum. They will not approve a mortgage with outstanding bad debt.

Some you listed are CAs and some will do a PFD (paying them for deleting the tradeline off your credit reports) and some even will settle and delete off your credit reports.

A secured CC is a good idea, but I would wait until you make a plan and decide what you are going to do and start working on it. The deposit on the credit card could be money towards some of these baddies. I would honestly wait a bit on obtaining any more credit.

Lastly, I strongly urge you to pull all 3 credit reports from annual credit report website. It is absolutely free and gives very important information like exact dates you can expect the accounts to drop off. Also, all 3 credit reports don't have all the same accounts always, so I would go over each report carefully to make sure you did not miss anything.

[Anonymous]

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@timshifty wrote:

Capital One Auto - $5,770 Will settle for 13% of the debt $753 (falls off 9/22)

This is an excellent offer, but it falls off in 9/2022, and is the very last one you would be waiting out to drop off, so you will need to seriously weigh if your money is best spent settling this one. It might be if you end up getting impatient waiting it out. I would save this one for last to deal with to decide.

Capital One Credit Card - $986 (falls off 4/22)

Also falls off in 2022, I would seriously weigh paying or settling this one.

Comenity Capital/HSN - $1,948 (falls off 4/22)

Same as above.

Credit One – Sold to Collection Agency and charged off (falls off 2/22)

Same as above.

Discover - $771 charged off (falls off 3/22)

Same as above.

First Premier - $591 (falls off 4/22)

Same as above.

First Premier #2 - $538 (falls off 4/22)

Same as above.

JPMCB Card – Charged Off (falls off 5/22)

Same as above.

Total Visa - $457 charged off (falls off 10/25)

This is one that I would work on either paying off or settling.

Webank/Fingerhut - $1,207 (falls off 2/22)

I would seriously weigh doing anything with this one since it falls off in 2022.

AFNI/AT&T - $1,442 (falls off 7/25)

I would search the threads for AFNI. I cant recall off the top of my head, but I believe they may do a PFD. This is one I would consider working on.

Cavalry Portfolio/Synchrony Bank - $1,191 (falls off 3/22)

Also would seriously weigh even bothering with it since it drops off in 2022.

I C Systems Collections/Sprint - $1,145 (falls off 8/26)

I would search the threads to see if they do PFD, because I believe they just might! I would work on dealing with this account.

Jefferson Capital/Verizon Wireless - $5,806 (falls off 8/22)

This one is a biggie and drops in 2022. I would again weigh how important it is to you to deal with it given the time left it will be reporting.

L J Ross/Flagstar - $768 (falls off 4/26)

I have not heard of this one, but again, I would search the threads to see if anyone has had experience with them and since it drops in 2026, I would absolutely deal with them one way or the other.

LVNV/Credit One - $984 (falls off 2/22)

Same as the others dropping in 2022. I would maybe not really worry too much about it.

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I put my recommendations above in bold. This brings down the total amount left to deal with to $3812 ($4565 if you decide to pay Cap One auto at the end of your rebuild). Remember, besides Cap One auto, this is the total of the balances you listed, and some may settle, so it may be even less!

That certainly seems much more manageable to work on and it gives you just under 2 years to work them out before the last baddie in 2022 drops!

While it is unpopular around here to recommend to not pay things, most are dropping off in 2022, and I would steer very clear of wasting resources (time and money) on them. The ones that drop off much later will keep you busy enough. You will need to stay strong because very old debts may come with a steep discount and it may be tempting to just pay it, but then you will need to ask yourself: "will this actually help me get a mortgage?".

Now, if you consider waiting out most of these accounts to drop off your credit reports and work on the few remaining items, I want you to be aware you may not see very much movement in your credit scores and I don't want you to get discouraged. Just remember that you are waiting for each bad account to drop off in 2022 and then once they are all gone, that is when you will see bigger score gains, which will be great because that will be when you will actually be ready to apply for a mortgage then!

Again, this is my take on it. You will need to decide in the end what you want to do.

Good luck!

[timshifty]

WOW..thank you for the great feedback and great advice. I will take you up on it. I will work on the baddies that are recent and let the other disappear hopefully.

In the meantime just save money for a down payment and stuf